When Seth Porges dishes on his money-making Airbnb secrets, we listen.
Called the “King of Airbnb in NYC” by the New York Post, the uber-successful host even counts Airbnb CEO Brian Chesky as a former guest.
Seth's living arrangements prevent him from breaking any of the city’s strict micro-subletting rules, which prohibit most renters from listing their apartments on the site.
But many brave tenants skirt the rules anyway, at the risk of upsetting neighbors, co-ops, and landlords, and racking up major fines and legal fees.
In a city where average rents for one-bedroom apartments clock in at $3,100 per month, it’s no wonder people would try anything to recoup that money.
There’s no shortage of demand, either. Tourists and temporary visitors generally see Airbnb properties as way cheaper than the $200-300+ nightly room rates they’d be forced to pay for basic Manhattan hotels.
Once upon a time, there was a spare room
Seth’s growing Airbnb empire began in 2008, when he tried putting an extra bedroom on the "Short-term" and "Sublet" sections of Craigslist.
“It sort of worked. But it was also sort of messy because Craigslist has no accountability built into it,” he said.
When Airbnb came around, he instantly saw it as the solution to his problems, and got bookings from the start.
“I was one of the very first hosts in New York, so there wasn't too much competition yet. Tons of curious early-adopters came through, as did the company's CEO.
“These days, I provide a hotel-quality experience, with professional cleanings between every guest, and lots of amenities aimed at improving the guest experience.”
How to make it in the sharing economy
Despite seeing substantial income right away, it took Seth a while to scale his operation.
He won’t disclose his exact revenues, but he says Airbnb covers all of his housing expenses and then some. What started as a side hustle has now generated enough income for renovations and non-traditional expansions, and has allowed him to re-invest into his business by adding more properties.
“I've been thinking about ways to do this that are 1) legal and, 2) don't involve buying houses, which are expensive and troublesome, so I’ve moved on to alternative types of dwellings such as towable tiny houses.”
His latest investment (listed on Airbnb, natch) is a tiny eco house which the manufacturer lists at a retail starting price of $38,600. It’s based in upstate New York, and has received some media acclaim of its own (here, too), as part of the growing tiny house trend.
Success tips for aspiring Airbnb entrepreneurs
As for Seth's secrets to success for aspiring AirBnb entrepreneurs, he says, “While the numbers may be appealing, there is a lot of uncertainty from a regulatory and legal perspective in some markets.” So...
1. Don't put all of your eggs in one basket
A sound investment philosophy is to be diversified, and Seth advises not to go all-in on Airbnb without some fallback.
“If you're investing in property for use on Airbnb and have no Plan B, you're setting yourself up for trouble. Make sure the property can serve a purpose or provide income in the event the Airbnb rug gets pulled out from under you in whatever locality you're working in.”
2. Location, location, location
And, sounding like a true real estate pro and seasoned investor, Seth stresses the importance of location.
“You need to be aware of seasonality. Some locations are only really visited a few weekends a year, which may not be enough to cover all your expenses. The best locations have year-round appeal,” he says.
Which is probably why he invested in an area that piggybacks off of big cities such as New York and surrounding affluent towns that double as strong real estate and business hubs.
“I like places that are inexpensive to buy in, but still close to wealthy areas that attract visitors all around them. This is why properties outside New York can do well—some of the towns a couple hours outside the city are still very affordable, and there are a lot of New Yorkers eager to visit them.”
3. Expectations. Are. Everything.
As far as practical tips go for getting top reviews, he advises to set the right expectations.
“Bad experiences happen when a guest's expectations aren't aligned with the reality. Maybe they can't handle stairs, or don't like that you share a kitchen. Whatever it is, make it very clear: The good and the bad.
“The nightmare scenario is that guests will invite a million friends and throw a rager, but I find that very easy to prevent just by letting guests know the grounds have surveillance cameras.”