I’m back with another installment of my Experiment Stories series on the blog, where I chronicle my “experiences with experiments” (say that 5 times fast) on my slow FI journey! There will be success stories, and there will be not-so-successful stories. I’m refusing to call them failures, because I believe that there is no such thing as failure when it comes to experimentation: we try things, we learn things, there you have it!
If you’re a regular reader of my blog, you know I am a huge fan of experimentation on the journey to financial independence.
Many of us on the path to financial independence know that we don’t want to work for the rest of our lives (or even until traditional retirement age), but fewer of us know exactly how we would spend our time if we weren’t working for income all the time.
Although I have a pretty good idea of the basic structure I’d want my days to look like if I wasn’t working (which I figured out by experimenting, mind you), the actual things I want to do to fill up those days are less certain.
I keep a list of ideas for what I would consider doing, called my Financial Freedom List, but these are just that: ideas. Things I think I’ll want to do. Things that are calling to me, that I think I will like doing, but that I want to explore further.
For some of the things on this list, it’s difficult to experiment while still working a full-time job. But for other things, I can actually start doing some small experiments while I’m still working a 9-5.
The latest experiment is not so much about what I’d be doing if I wasn’t working, but more about how we can make some side money, away from our 9-5s. How we could diversify our income.
And so, please allow me to report on our latest experiment: listing our mother-in-law suite* on Airbnb.
*In case you’re wondering what exactly I mean when I say “a mother-in-law suite,” the accepted definition is a living area on the same property but with a private entrance. In our case, the space is a 1-bedroom apartment with a full kitchen and bathroom, attached to our house (shares walls/floors/ceilings) but with its own entrance, and no way to get from one inside space to the other.
A brief history of our mother-in-law suite
When I met Mr. Dink, he owned the home we currently live in. About a year before we met, he had bought it for a low price, and it was quite the fixer-upper.
When he first bought the home, even from that first walk-through, he knew he wanted to create a mother-in-law suite with the space the previous owner had been using as her master bedroom.
As a carpenter with a knack for home restorations, he immediately saw the potential in the space. At the time, it was just him, and he didn’t need the entire house all to himself (and we still don’t now). The previous owner had, at one point, added an addition on to the house that she used as her master bedroom, because it was all on the first floor, and he knew as soon as he saw it that he could close off that space from the rest of the house and create a mother-in-law suite.
There were a few projects he had to do on his side of the house to be able to make that livable on its own (eg, put in a shower), but once that was done, he could move forward with renovating the mother-in-law-suite.
When Mr. Dink and I met in summer 2016, he was just putting the finishing touches on the apartment, and his first long-term tenant moved in that winter.
When I moved in with him the following summer, that tenant moved out shortly thereafter (unrelated). And so we found ourselves with a fresh slate, an option to reconsider how we wanted to use that space. I had some furnishings from the move that didn’t fit the space in our part of the house, that we figured we could use to partially furnish the apartment, if we wanted to go that route. We accepted a lightly used bed from a friend. I scored a lightly used futon from someone at church. We figured we could try renting the apartment furnished, maybe to traveling professors or nurses, or we could try Airbnb.
But then, less than 2 months after I moved in, we had our house fire. We were displaced for over a year, and we moved back in in February 2018. Luckily, the mother-in-law suite was the part of the house farthest away from where the fire started, so it fared the best. It still needed some work, but not nearly as much as the rest of the house.
We found ourselves right back to where we were before, contemplating what we wanted to do with this space, whether we wanted another long-term tenant or we wanted to try something short-term like Airbnb. While we dragged our feet, one of Mr. Dink’s clients contacted him about the apartment. He was getting a divorce and needed a place to stay until he could figure out what was next. He said it wouldn’t be much longer than a year.
So for many reasons, but mostly because we had someone willing to pay and to also help us finish up the last few touches of getting the apartment ready to rent (paint, etc.), we found ourselves with another long-term tenant.
This ended up being a good learning experience. I was able to experience for myself what having a long-term tenant was like. There were some things we did well, and others that we would do differently if we could do it again. Most importantly, we had great data and experience to go on once this tenant finally moved out and we had yet another decision to make.
The experiment
Just like before, we used this clean slate to consider our options. We thought long and hard about what we might want, weighing all the pros and cons. We ultimately decided we wanted to try Airbnb for many reasons.
The first came down to lifestyle. Although we loved the ease (at least in our case, our tenant had been blessedly quiet and kept to himself) and the steady money coming in every month, we realized our space and lifestyle wasn’t best suited for a long-term tenant.
For starters, there isn’t really a good outdoor space, which is important for a long-term tenant. If this is the place someone is going to live year-round, you likely want to be able to go outside and spend some time, especially in the summer, maybe even have a garden. But all of our outdoor space is quite close quarters, and we didn’t really want a long-term tenant hanging out in our space. It was fine when it was someone we knew and were comfortable with, but we didn’t want to count on all our tenants being that way.
Similarly, this space is a part of our home, and we wanted a bit more control of what happens in there. We wanted to be able to check-in more frequently. We found that the long-term tenants were really hard on the space in terms of wear and tear, and we thought a short-term rental might help with that.
Another important aspect of our lifestyle is that we really wanted to be able to have friends and family come and stay, and have their own space (after all, we made this a priority in 2023!) Our side of the house is relatively small, and the guest bedroom is immediately next to our bedroom, with a small shared bathroom. In short, it’s very close quarters. It’s completely fine for certain guests like close friends and family, but we wanted our guests to have the option to have a bit more private space. So that family who live far away could stay for awhile and be comfortable. More and more, our friends are having kids and starting their own families, and we wanted them to have more space when they come to visit.
And finally, at this point in our lives, we had plenty of stuff to furnish the apartment with. We only needed to get a few extra things (like lamps and a desk), that we could get second hand, and we could completely furnish the apartment. Although we could still have rented the space to a long-term tenant furnished, we again considered the wear and tear this may have on our stuff.
What next?
Once we decided we wanted to try Airbnb, it took us awhile to get it going. We always have trouble getting started on big projects that feel like big change. There were several things Mr. Dink wanted to do within the space from a carpentry perspective (eg, fix a few windows). I would be the one managing our online presence on the app, and I struggled to find the time to sit down and figure it all out.
We both felt like we needed some dedicated time, mentally and physically, to spend working on the apartment. But with both of us still working full-time, time is hard to come by right now.
So, Mr. Dink used some of his slow time in-between jobs this spring and summer to finish his tasks.
And I used part of my recent job-switch sabbatical to get started on my own list of items (researching the app, putting some finer touches on the space like signage, new bedding and linens, etc). By the end of the sabbatical, I had gotten a lot done, and I had a solid plan and a firm to-do list of things that needed to happen before official launch.
Being back to work in full swing, it took us all summer to get those final to-dos done, but come Fall, we finally felt ready, or as ready as we’d ever be.
We finally pulled the trigger and launched our space in September.
How it’s going
In short, it has been fantastic!
So far, we’re not making nearly as much money as we were when we had a long-term tenant, but for us, the benefits far outweigh that con. Plus, we considered this ahead of time. We knew we likely wouldn’t make as much money, especially as first, and we intentionally chose this option anyway. We don’t need the extra money. We never relied on the extra money we made from renting in our budget. We don’t want to make this a business. We just want to make a little extra money on the side, from a space in our house that we aren’t using a lot of the time.
As we suspected, the short-term nature that Airbnb provides fits with our lifestyle so much better. Just as we hoped, our friends and family love coming to stay in the apartment! We even had some of our family come and stay in the apartment before we listed it, to help give us feedback on the space and put our minds a little more at ease. My dad and stepmom never used to come visit for more than a day, and now they come for days at a time. When my mom comes to stay, she has her own space. Everyone is happier and calmer because we’re not on top of each other and in each other’s space all the time. We’ve had friends with family (and even pets!) come and stay in the apartment. And we hope for even more variety in 2024, as we continue to prioritize time with friends and family.
We have also been pleasantly surprised with the ease of using Airbnb. Everything is really streamlined. It’s become like second nature. I don’t find it stressful at all to keep track of everything on the app. We love knowing we can block it off if needed, either when we’re traveling or when we have friends and family coming to stay.
Also, having Airbnb involved at all provides a sort of peace of mind. We’re not alone in this, like we were when we were renting it on our own, and there’s accountability. We had small conflicts in the past with some of our long-term tenants not taking us as seriously as we would have liked, and we feel like Airbnb helps with this. It holds both parties accountable.
So far, we have had nothing but great experiences with our short-term guests through Airbnb. We rarely even see them when they are here, but if we happen to run into them in the driveway, it’s easy and pleasant. We know that eventually there will likely be some mishap, and we can handle it. We love knowing that if we have a not-so-great guest, they’ll be leaving soon, rather than having a year-long lease. Because we’re not trying to maximize like crazy or make this a business, it’s fine when something wonky happens like the people check-out late without asking (yes, that has happened). To keep our stress levels low, we don’t have guests staying back-to-back, so it didn’t matter because we had no one coming in that day.
We even do our own cleaning! Mr. Dink actually likes doing it. Again, I think it’s mostly about control. But turning the space over ourselves also avoids the added complexity of having to coordinate a cleaning person (plus, it can be hard to find someone good and reliable around here in rural Vermont anyway).
We love that Airbnb allows us to make our set-up and communication exactly what we want (again, so much control!). There’s so much functionality to the app. We can set our own prices (although the app makes suggestions). We can charge a little more if we want for certain weekends, we can provide discounts for longer-term stays, and we can lower the price for last-minute stays if we find that no one is booking.
We’ve also found that we have a nice little niche in our small, college town. So far, in the fall, all of our guests have been parents of college kids. Now, with winter about to be upon us, all of the guests who have booked our space are coming up to ski. We’re really transparent about our space, what it is and what it’s like (that it’s not perfect, for example). So far, our reviews have been great.
All in all, for now, Airbnb is working for us. So we consider this is a successful experiment.
And guess what? As I wrote about recently, things can change at anytime. We know that we may not enjoy Airbnb/Airbnb may not work for us forever, and if that’s the case, we’ll make changes. We can always go back to long-term rentals if we want. We’ve even considered Furnished Finder, a short-term rental marketplace for traveling professionals, thanks to someone at church who uses it for space in her home and raves about it. If we ever decide we want to go back to longer term but not quite year-long renting, we could try that out.
We have options. And when it comes down to it, that’s all we can really ask for, isn’t it?
We’ll see what the future holds!
Do you host on Airbnb, or have you ever considered listing a portion of your space on Airbnb? Is there anything else you want to know about our experience? We’d love to hear from you!