How To Get Free or Discounted Rent

I’ve heard of a few people doing this, but I’m surprised more don’t. (Update: check out this genius!)

Next time you’re looking for an apartment get a 2 bedroom instead of a 1 bedroom, or a 3 bedroom instead of a 2, and buy a cheap bed for the extra bedroom. I’ve purchased a new queen sized mattress/box spring for $200 delivered before.

Also, be sure you’re renting in a desirable area of town. Meaning an area where it would be convenient for people who are traveling to your city to stay. Near public transportation is always a good bet.

Next step is simple: Rent out your extra bedroom on AirBNB. Price your room for just under the going rate (if average is $100 make yours $90) so it gets rented quickly and often. I would even start by renting it for half the going rate at first to build up reviews, which are important to get future rentals.

This is better than having a full-time roommate for 2 reasons:

  1. You probably only have to rent out the room for 10 days per month to make enough to cover more than half the rent. (Even though a 2bed isn’t ever twice as expensive as a 1bed apartment anyway.) Renting for 15-20 days will likely cover the whole month’s rent. That means you get the place to yourself for a significant portion of every month. If you’re an introvert like me this is killer.
  2. You get to meet new people from around the world. When you can’t travel at least you can live vicariously.
Shane Stranahan

Hey Karol, great idea man. I’ve been thinking about doing this but I hadn’t thought of pricing it that high, which would make it more sustainable.

I also bet that it would be profitable and not too difficult to make a nice living off of a small-scale AirBnB setup in a major city. If somebody had some money they could buy a plot of undeveloped land in a major city (I’d think a place like Portland or Austin), develop the landscaping and put down a couple mini-houses (which can be bought for ~$12000) or yurts (which can be bought for ~$3000-$4000 apiece) and I bet that if you’d set the place up nicely enough you could immediately start earning at least enough money to pay rent and to develop the property more and put down more yurts/cabins/houses… then raise the prices after a little while once you have a few dozen reviews and you probably have a decent money maker that could turn into a primary source of income! =)

Karol

“pricing it that high” – it’s not priced high. it’s priced below the avg aka low.

Plots of land in major cities are very expensive, but I like the general idea.

Shane Stranahan

1)Re:Pricing it that high – I should have explained my bias. For me, $45 a night is out of my price range. I would rather sleep in a tent in a forest or Couchsurf or sleep in a cheaper hostel. I had put the price point I would offer on a property via AirBnB lower; that’s me and I should probably raise that standard.

2)Buying it is slightly far away right now, definitely, but I bet that there are people who have patches of undeveloped land in cities who would be willing to let somebody rent the property, develop the land, and then do the AirBnB thing. I bet that if somebody had ~$40,000 they could rent a half or quarter acre in a city for a year and start the venture ($15,000 for a year on a half acre in a city, $6000 for landscaping stuff and property design, $12,000 (for four yurts), the rest ($7000) for solar installation, plumbing and random different things.)

Karol

1) If you’re pricing at or below the average on other AirBnBs in your city then you’re not pricing out of range

2) Not sure where you’re getting these numbers from, but they’re overly simplistic and drastically optimistic.

Shane Stranahan

1)If it appeared at first like I was saying that you were pricing it too high – that wasn’t my intention and I don’t think it.
I said out of my range – however I wouldn’t be the target market and if I were going to do this I wouldn’t aim it at people like me… save that for hosting Couchsurfers!

2) Definitely simplified. I think the drastically optimistic parts would be a)assuming that you could get the rented property for $1250 a month (most likely closer to $2000) and b) assuming that $7000 would cover the random extra costs, including licenses, property fees, kitchen, bathrooms, et cetera… I’m pretty certain that if somebody already lived in the area they could get it set up fairly frugally over a few months and within a few years have recouped their initial investment. It would be a big investment though for somebody without ample means.

3) You mentioned in your email that you’re staying in Austin for at least a little while – are you planning on using the strategy you gave here?

Karol

3) Not yet. I’m leaving in a month and I rented a room instead of a whole place (couldn’t find a short term furnished place to myself in the area I wanted).

Jillian

Yes! This is SO true. I myself have been doing AirBnB for 2 years now, and it has been fantastic. I highly recommend people get a two bedroom apartment, to rent out the spare room. Even better, if you can get a place that has 2 bathrooms, or a separate floor for the guests (like a furnished basement), as you can charge more.

My rent is $1200 a month. I charge $75/night (and am very popular, and very booked). On a slow month, I make about $1000, and that is having the place to myself most of the time – so you are absolutely right, Karol, it is much better than a roommate. I could only get $600 out of a roommate, and would be stuck with them every day.

On a busy month, I make about $2000/month, so not only live rent free, but MAKE money. And, I get to meet amazing people from all over the world- from Malaysia to Australia, to Italy to Indiana. I love to say it is a way for me to travel without having to leave my home.

The other bonus over a roommate, usually these people are not in your home most of the day, they are out seeing the city, or going to the conference, or whatever.

It is good to price slightly below as you’re starting, so you can get reviews. But once you get a lot of good reviews, you can raise your price. Honestly, when I lower my price, I often find my guests are a lot more high maintenance/bother. Go figure.

And remember, you do need to put some of that $ aside for expenses like laundry, toilet paper, soap, coffee/tea, and taxes. And what your time is worth – all that laundry, cleaning, making up the room, and arranging your schedule so that you are home when they arrive.

My listing, fwiw:
http://www.airbnb.com/rooms/25516

Karol

Wowza, thank you so much for sharing that Jillian. And thanks for sharing an incredibly successful listing so we can see what that looks like.

Jillian

Yeah, I tend to get a bit excited about the whole airbnb thing. ;)

Shane

Wow, Jill, that is so awesome and incredibly reassuring. A friend of mine and I are now planning on splitting a two-bedroom and doing AirBnB with one of the rooms, and your example is such an awesome beacon of hope, and was a great introduction to the idea for people who didn’t know about it.

Comments on this entry are closed.

Previous post:

Next post: