How to Make Money with Airbnb and How it Helped My Startup

airbnbToday we have a guest post from my friend Rachel who has an incredible story about making money through Airbnb. For a period of time, her only income in NYC was from renting out her apartment on the site. Through her story, you may find that you are able to follow this path as well!

My Company

I’m Rachel, and I founded a tech startup called Seeds.  Seeds embeds microlending into smartphone games.  When you’re playing a game that Seeds has partnered with, you can make an IAP (in-app purchase) and a portion of the purchase will benefit entrepreneurs in places like Kenya, where a loan of a few dollars can go a long way.  The loans are repaid with interest, and we continue lending the capital to other entrepreneurs, hopefully giving a leg up to as many people as we can. (Mr. NYBudget Note: This is the way that Kiva works as well, which I am a big supporter of).

I launched Seeds because I wanted to harness the 3.5 BILLION hours per week that people spend playing games and use it for a productive purpose, like microlending. Microlending improves lives. When I launched Seeds, I had supporting data that showed that people are more likely to spend money in games if that money goes to real-world social good.  This is fantastic for us! The idea is to have Seeds solve multiple problems – we are improving user conversion for games and giving the game company a marketing opportunity to demonstrate that they cared about social good, which will lead to a more loyal and engaged user base. We are also sourcing more capital for micro-entrepreneurs in need.  From the outset, it seemed like the idea was bound to succeed, so long as we had the necessary resources to execute properly.

An example of how Seeds works in one of its games!
An example of how Seeds works in one of its games!

Airbnb to the Rescue

So I my plan had one major problem. I was broke.  Even though I had worked as a stock trader for years, I followed that by making a documentary about the impact of microlending on female entrepreneurs – which meant that my savings was basically gone after I invested it in the film.  I had passion for the idea behind Seeds, a big vision of transforming the digital gaming landscape, but I had no idea how I’d be able to survive living in Manhattan while bootstrapping an early-stage startup.

Enter Airbnb. I saw a post made by entrepreneur-turned-VC Mark Suster on his blog, Both Sides of the Table.  Mark talked about another startup CEO, Tracy DiNunzio, founder of what is now Tradesy.  She listed her apartment on Airbnb to support herself while launching her company, and was able to use Airbnb to find a channel to startup success.  I figured I could try to do the same thing.

And so I did.  I at first listed the bedroom in my Washington Heights apartment (my roommate Nikita was cool enough to be tolerant of this arrangement), and I would sleep on the couch if there was a guest.  Later on, I moved to a 2 bedroom apartment in Brooklyn with the intention of scaling my Airbnb business, renting out both bedrooms while I slept on the couch (which I did as much as I possibly could).

The Airbnb experience has pretty much been awesome for me all around.  First, they send a professional photographer to take pictures of your apartment FOR FREE, which boosted my bookings immediately.  The sign-up process at the time I registered, in early 2012, was extremely easy.  I verified my email address, phone number and my Facebook account, and I was good to go (though I could’ve verified less if I had wanted).

Almost without exception, everyone I’ve hosted has been respectful and cool.  I’ve had a couple guests, as Airbnb has become more mainstream, that approached the stay in the way they might approach a hotel stay experience, and were therefore more demanding, and I had one guest who blindsided me in a bad review even after asking to extend his stay, but overall it’s been really really great.  I’ve made friends with a wonderful teacher from rural Germany who has been a guest multiple times, hung out with an awesome Eastern European filmmaker who showed me his recently completed feature, and have had multiple guests (a doctor from Belarus, a designer from SF) who relocated to NYC after crashing with me, and then became my New York friends.

The Money I Made

A typical week-long stay would generate $600 or more for me, depending on the number of guests.  Airbnb brought in $35K for me in 2013, allowing me to get Seeds off the ground.  Seeds is currently live in 2 games – Fashion Star Designer and Super Kid Cannon – and we have deals in place with a total of 5 gaming companies, with 40 more potential partners in our pipeline, all while growing our team! (Mr. NYBudget Note: WOW! $35,000??? I had no idea this could be so lucrative!)

Airbnb has allowed me to utilize NYC’s expensive rental costs so that they work for me rather than against me as I’ve pursued my entrepreneurial dreams.  As a direct result, I’ve been able to raise investment funding, my company is generating revenue, and I’ve hired multiple NYC-based employees, proving that Airbnb has not only been a platform for my business, but also a boon for the NYC tech economy, allowing for the creation of more technological jobs in NYC.

Airbnb can do the same thing for any entrepreneur, artist, or freelancer working in an expensive city like New York.  I feel very lucky that I happen to be living in a time and place in which this resource is available.  I’ve invited several friends to become Airbnb hosts, and they’ve used it while bootstrapping their startups or furthered their artistic projects.

Recently, the city of New York has been cracking down on Airbnb – the Attorney General is demanding personal information from thousands of hosts, and has voiced a desire to “protect” the multi-billion dollar hotel industry.  Apparently he sees Airbnb as a threat.  But Airbnb is a boon – it allows for innovation and job creation.  Airbnb is also completely legal, so long as you live in the space that you’re renting out.

I hope New York can fully realize this asset and support it in the way I feel it deserves.  Wiithout Airbnb’s support, my New York-based startup and the jobs it has created could not exist.

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15 thoughts on “How to Make Money with Airbnb and How it Helped My Startup

  1. Holly@ClubThrifty May 5, 2014 at 8:23 am

    Air BNB is a great way to make some extra cash if you have a place or room people want to rent. Great job!
    Holly@ClubThrifty recently posted: Keeping Up With the Joneses: Our Frugal Yard RemodelMy Profile

    • Mr NYBudget May 5, 2014 at 8:36 am

      Absolutely – I had no idea just how MUCH money until I started talking with Rachel – after that, I knew I wanted her to write a guest blog post about it.

  2. What a rockstar company. I’ve used air b n b to sublet my space with great success. I think a lot depends on your building and the tolerance of your landlord/roommates/etc. I’ve been contemplating moving into my own space and renting out the room half the time to cover the rent. I think it’s the only way I could afford to live on my own.
    Stefanie @ The Broke and Beautiful Life recently posted: Retail Stores are Seductive. Seriously.My Profile

    • Mr NYBudget May 5, 2014 at 1:47 pm

      Absolutely, I can’t wait to see how they grow and integrate even further into NYC!

  3. EL @ Moneywatch101 May 6, 2014 at 2:26 pm

    Wow 35K is awesome, and I didnt expect that figure to be so high. I now will consider using Air bnb in the future, just need a place with an onsuite as to not share bathrooms with strangers. Good advice and good luck with seeds.
    EL @ Moneywatch101 recently posted: The Last Hundred DollarsMy Profile

    • Mr NYBudget May 7, 2014 at 10:41 am

      The Airbnb review system is pretty good. You can make sure people are verified and you can definitely chat with them before agreeing to let them come stay with you.

  4. Even Steven May 7, 2014 at 9:27 am

    If you are single agreed a great way to make extra income. My wife is not very keen on letting a stranger stay at our house. Airbnb would not work for me, but I certainly see the upside of it.
    Even Steven recently posted: I Joined the Yakezie ChallengeMy Profile

    • Mr NYBudget May 7, 2014 at 10:39 am

      Ha – my girlfriend is not too fond of the idea either, but there are definitely couples out there that are willing to rent out their extra bedroom and make a really good amount of money!

  5. Scott @ Youthful Investor May 10, 2014 at 8:51 am

    It sounds like a cool program if you have the right set up in the right area. Is it as successful if you live outside of the city? I cannot imagine it creating much income from places unlike NYC.
    Scott @ Youthful Investor recently posted: Is a Battlebot in the Budget and Other Expensive HobbiesMy Profile

    • Mr NYBudget May 10, 2014 at 11:43 pm

      Hi Scott! New York definitely provides a unique opportunity. I think you could get top dollar in places like Las Vegas, LA, San Francisco, Chicago, Denver… etc – you get my point. But while you may not be able to make as MUCH money other places, because of the lower rent, I bet you could actually make just as much profit in other places. This is just a conjecture on my part, but Airbnb is growing and even the least touristy towns have visitors that need places to stay. Maybe you don’t make as much, but depending on your exact market, it might be worth looking into.

  6. Debby May 10, 2014 at 3:39 pm

    That’s a great and lucrative income right there! But – devil’s advocate – how about taxes? I never used AirBnb, but I have friends who do, and who’re now stopping because of how that extra income is increasing taxes they have to pay at the end of the day.
    Debby recently posted: Day 208 – Conversation – It’s an Art.My Profile

    • Mr NYBudget May 10, 2014 at 11:57 pm

      Taxes are definitely a consideration. Of course, there are strategies to keep taxes manageable ( does a GREAT job at figuring a lot of those out). But at the end of the day, if Rachel is making $35,000 in 2013 – Even if her taxes were $10,000 on that money (given her situation, there’s no way it would be that much), she would be up $25,000 and that’s better than not doing it at all!

  7. Phil May 12, 2014 at 3:49 pm

    Sounds like a great idea until someone throws an orgy in your home! That just happened recently.
    Phil recently posted: The Gilroy – a touch of craft cocktail class on the UES!My Profile

    • Mr NYBudget May 12, 2014 at 4:17 pm

      Ha! What a world we live in. I think Rachel is always present when she uses Airbnb, so hopefully she would be able to stop something like that.

  8. Nora Miller January 2, 2015 at 10:28 pm

    Looks like a great idea here. I never really thought AirBNB can be used as a source of income. Now I’m thinking of a great way to make it work for me as well.

    Thanks for sharing this one. I had fun reading it really.

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