The Ultimate Guide to Starting an Airbnb Business with Your Vacation Home

 

An unfortunate staycation experience inspired our family to acquire a condominium unit in Tagaytay as both our vacation house and a source of passive income. Initially, we planned to acquire a lot near our residence, but our plans shifted when our Aunt Elpy offered a preselling condominium unit she had learned about from a registered broker, Ms. Joy. While we were initially hesitant about the complexities of owning a condominium, issues with the prospective lot owner led us to explore this option seriously.

The unit is located on Bonifacio Drive, Brgy. Silang Crossing West, Tagaytay. The developer, owned by a reputable political family, has a credible track record, assuring us the project would push through. At the time of our visit, the first tower was already constructed, with plans for a second tower underway. However, the model unit was situated in a different barangay where the developer’s sister subdivision is located. Despite its compact size (approximately 23.7 square meters), the model unit was well-designed for short vacations. The contract price was affordable at 1.9 million pesos, especially compared to its current value.

We were required to pay 20% equity at zero interest, payable over 12 months. After evaluating our finances and plans, we paid the equity in full and opted to make additional payments to reduce our eventual bank loan. Initially, our monthly amortization was 12,000 pesos, which increased to 15,000 pesos after five years due to interest rate adjustments. Unlike vehicles that depreciate, our unit’s market value has appreciated over time. The loan application process was smooth, requiring basic documents such as proof of income, ID, and a certificate of employment. Payments were made via auto-debit through BDO.

Preparing the Unit for Airbnb

The unit was turned over to us in the second semester of 2018 as a bare space, requiring significant preparation for leasing. Before the turnover, I attended a seminar by the developer about leasing management. They provided advice on designing the unit without hiring an interior decorator and promised a photoshoot for marketing purposes. Inspired, we decided to convert the unit into an Airbnb, not just a vacation house.

As first-time condominium owners, we hired a local modular cabinet maker to build the cabinets and bed frame. The design, inspired by a magazine, featured a black-and-white motif. The cost ranged from 120,000 to 150,000 pesos for custom furniture. Additional expenses included home decorations, furniture, appliances, and kitchenware, which totaled around 200,000 pesos. We also registered the unit with the developer’s leasing office and applied for utilities such as Meralco, Primewater, and internet. Monthly costs included:

• HOA dues: over 2,000 pesos

• Internet and cable: 1,424 pesos

• Electricity/ water: variable based on usage

Challenges and Adjustments

Unfortunately, the leasing office mishandled our unit, delaying income remittance until we sent a demand letter. This prompted us to create our own marketing channels, including a Facebook page Y&L'scrib and accounts on Airbnb, Agoda, and Booking.com. While our Facebook page attracted most of our guests, competition increased as other unit owners followed our lead. Eventually, we entrusted unit management to a trusted neighbor/friend, Shesam due to our busy schedules.

We also started offering room decoration services for guests celebrating special occasions. These additional services enhanced our offerings and built customer relationships.

Pros and Cons of Investing in a Condominium

Pros:

1. Guaranteed passive income (though not as high as expected).

2. A personal vacation house for relaxation.

3. Appreciating property value over time.

Cons:

1. Random requests for unreasonable discounts or free stays.

2. High competition with other condominium owners offering lower rates.

3. Burdensome management of common areas without an active HOA.

4. Increasing HOA dues.

5. Uncooperative owners who delay payments.

6. Higher expenses than income in some months.

7. Responsibilities and liabilities associated with leasing.

Essentials for Hosting

1. Linens (towels, bed sheets, curtains, etc.).

2. Toiletries.

3. Bedroom slippers.

4. Tissue paper.

5. Coffee, cream, sugar, and bottled water.

6. Entertainment options (board games, videoke, etc.).

Utilities and Permits

1. Electricity and water.

2. Internet and cable/streaming subscriptions.

3. Business permit and tax compliance.

Reminders for Condominium Investment

1. Look for reputable developer.

2. Verify the developer’s registration and permit for residential or commercial use.

3. Compare the promised master plan with the actual turnover.

4. Participate in homeowners' general assemblies and elections.

5. Build relationships with neighbors for support and harmony.

6. Do not solely rely on passive income, as the staycation market is seasonal.

7. Maintain your unit’s quality to preserve its value.

8. Adhere to house rules and draft visible rules for guests.

9. Hire a reliable and respected handler if not managing the unit personally.

10. Keep an inventory of all items in the unit, including prices.

11. Use social media to market your unit and collaborate when needed.

By carefully managing expectations and operations, our Airbnb journey has been a valuable learning experience, providing both financial and personal rewards.

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