katelynriwv: Who's Making Money

When my husband and I purchased our Manhattan condo, it was important for us to buy a two-bedroom.

Not only does the spare room encourage friends and family to visit more often — they don’t have to spring for an expensive hotel — but it also has become an extra source of income because, when it’s vacant, we rent it out to tourists who are seeking lower-cost accommodations with friendly locals.

For the past two-and-a-half years, we’ve welcomed into our home travelers from all over the world for a reasonable nightly rate. We’ve made great friends along the way, for sure, but we’ve managed to make a decent amount of money, too. Enough, in fact, to seriously offset our monthly mortgage payment. Check out this recent post to find out about some of the room-rental services we use — and exactly how much we’ve pocketed. (See also: 6 Weird Things People Sell for Cash)

Simply listing your property on sites like Airbnb and Roomorama, however, isn’t going to make your side business a success. There are other aspects that require fine-tuning to make this situation work to your advantage. The way I see it, there are more than 4,000 other entrepreneurial folks in NYC doing the same thing we are (though that will soon change due to a newly passed law), and I want to ensure that our guest bedroom is filled with paying customers as often as possible.

If you have extra space and live in an area conducive to travel or tourism, I highly recommend hosting travelers. To give you an edge over the competition, here are seven criteria to keep in mind for maximum results.

1. List Your Property on Travel Sites

When we first started this little business, we were strictly listing in the Vacation Rentals section on Craigslist. The geniuses (and I mean that wholeheartedly; they’re brilliant) at Airbnb contacted us after the site’s launch in 2008 and invited us to list with them. We continued with Craigslist but also took Airbnb up on its offer. Business increased dramatically. Then Roomorama, a similarly modeled site, debuted, and we took advantage by listing there, too.

Listing on three sites is certainly a lot to manage — especially in making sure that we’re not double booking (I’ve never had it happen, knock on wood) — but it means thrice the exposure. The travelers looking on Craigslist may not be on Airbnb or Roomorama, and vice versa. The best thing about Craigslist is that we receive the full amount of the rental, whereas with the other sites you pay a percentage of the rental as a listing fee. But the fee is so low — and we raise the rent on those sites a tad to make up for it — that it’s inconsequential. The popularity and power of Airbnb and Roomorama within the marketplace is so incredible, too, that our inquiries from Craigslist have significantly reduced. And I’m OK with that. Airbnb and Roomorama have many more advantages — automatic calendar updating, a photo portfolio for your listing, and direct deposit — that make this opportunity both manageable, fun, and financially rewarding.

2. Market Your Home as a Destination

There are an incredible amount of listings on the vacation rental sites, especially in well-visited cities, and to pique a traveler’s interest, you have to offer amenities. Our unit features an in-unit washer/dryer, HD cable, DVD players, and a LCD TV in both the living area and guest bedroom. We offer a mini-fridge stocked with simple breakfast items and snacks and a Keurig single-cup coffee maker in the private room. We have fresh Ralph Lauren towels, a Wii and Xbox 360, among other enticing items, which are all inclusive. These are perks that people want — they make their stay more luxurious and enjoyable — and they’re items that help the traveler choose us over another host offering less. In this business, the little things go a long way.

3. Write an Engaging, Entertaining Ad

Staying with strangers can be a precarious predicament, because you never really know who’s on the other side of the door. Even before the advent of the vacation-rental sites, I had written an ad for Craigslist that aimed to give the traveler an idea of who we are in a funny and charming way. Our guests have told us that the quality of our ad single-handedly sold them on the idea of booking with us. You can judge our ad for yourself.

4. Vet Your Guests Before They Book

This tip ties in with writing an engaging, entertaining ad because 9 times out of 10, it’s conducive to conversation. My ad has motivated innumerable interested travelers to send me messages about how funny a certain part is, or how much they can’t wait to play Wii with us. With their response, they generally open up about themselves as well. From my end, it’s very important that travelers send messages that give me a little insight into the kind of people they are. If I receive a bland message that says simply, “How much per night?” or something with an equitable lack of personality, I delete it. A certain measure of caution must be taken when welcoming strangers to stay in your home, and the more I know about the travelers before they arrive, the safer I sleep at night.

Matt Yglesias of the Center for
American Progress Action Fund
ponders the logical endpoint of Milton Friedman’s famous
declaration that “the social responsibility of business is to
increase its profit.”

This implies that a business executive has not only the right as
a citizen of a democratic country but amoral obligation to dedicate
his energy and that of the firm he manages toward erecting
regulatory barriers to competition and to begging for bailouts and
subsidies. The Friedman view is that an entrepreneur who’s obsessed
with creating great products is not just in some loose sense a
sucker compared to the one who’s more focused on creating a
politically entrenched monopoly, but that he’s also guilty of some
kind of ethical failing.

Yglesias suggests that, in the end, Friedman’s notion that
profit is the goal is effectively a “social responsibility to
rent-seek.” I'm not so sure, for a couple of reasons.

The first—one espoused by any number of free-market business
owners—is that most folks who subscribe to a basically Friedmanite
view of the world also believe that the short- and medium-term
profits earned through rent-seeking tend to come at the expense of
a firm’s long-term profits and sustainability. Perhaps a firm
initially makes some money by lobbying for taxes and regulations
that push smaller firms out of the market. But in the long run,
those profits are the products of market distortions, and thus not
healthy for the firm, which becomes increasingly reliant on
favoritism and intervention rather than price signals over time.
That sort of rent-seeking behavior also encourages a competitive
regulatory environment, in which other firms and interested parties
(bureaucrats, special interest groups, politicians, etc.) will soon
seek to use similar tactics against your firm. Eventually those
parties will be successful. The underlying idea behind this view is
that it’s bad business to work toward making rent-seeking a greater
part of the regulatory environment.

The second thing to note is that Yglesias is at least partially
right in that many businesses
do end up accepting and embracing the notion that
rent-seeking is simply part of their business. But if you think
this is a problem, then the most effective response is to look for
ways to make rent-seeking behavior more difficult. And since one of
the basic premises when it comes to rent-seeking is that rules and
regulations will almost always be gamed in favor of one party or
another, and that more rules leads to more gaming, you don’t
accomplish this through regulation. Instead, you make rent-seeking
harder by making government smaller, and simpler, and less
powerful, and therefore 1) harder to manipulate and 2) less
enticing, thanks to the limits on its influence, to those looking
to exploit its rules. The less advantageous it is to game the
government, the fewer businesses will attempt to do it.

In 2005, Reason
hosted a debate over the meaning of corporate social
responsibility between Milton Friedman, Whole Foods' John Mackey,
and Cypress Semiconductor's T.J. Rodgers.

bench craft company

katelynriwv

Saturday, March 5, 2011

Who's Making Money

1. List Your Property on Travel Sites

2. Market Your Home as a Destination

3. Write an Engaging, Entertaining Ad

4. Vet Your Guests Before They Book

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