Renting out your property on Airbnb and HomeAway will provide you with an extra income. But do you know exactly how much profit (or loss) you make?
In order to know you will need to sum your income and subtract all your expenses:
PROFIT = INCOME – EXPENSES
That’s an easy equation! But it requires some administrative work to collect all the data…
The advice is: do this work regularly & make it part of your day to day operations, then it will be the least effort!
So, first of all you will need to collect all your income (the figures that make you happy): line-up the income generated by all your bookings across platforms (Airbnb, HomeAway, …) and your direct bookings. Maybe you also have some income from extra services that you provide to your guests.
On the expense side you will have your monthly expenses such as:
- Utilities: water, electricity, gas
- Internet and maybe Netflex or Spotify
- Television & satellite
- Alarm system
- Mortgage
Yearly expenses:
- Taxes for your property
- Income taxes
But also do not forget the miscellaneous expenses such as:
- Cleaning, bathroom & kitchen supplies
- Towels & blankets
- Insurance: platforms such as Airbnb & Homeaway already include an insurance for every booking, but you should also have a separate insurance in case your roof is damaged by a storm or when a tree falls on the house.
- Maintenance, repairs & redecorating
- Replacement of broken stuff (typically cups & glasses)
- Advertising & margeting
Then you also might have some expenses per reservation:
- Costs related to your service providers (in case you’re a long distance land lord): check-in, check-out, cleaning, …
- Platform specific fees
And the list goes on…. The most essential part is that you line up every cost, both incoming & outgoing in 1 place.
What tools can you use?
Any spreadsheet software is perfect for the job: Excel, Google docs, … You could create a sheet for your income and another sheet for your expenses and then make an overview sheet with the (hopefully) profit.
If you’re using AirCare.rentals to manage your rentals, then you can easily keep track of all your income & expenses inside the tool. We’ll show you how in an upcoming post!