Did you know that people are making it big with Airbnb? You may not have thought of it, but you can start a profitable Airbnb business and be smiling at the bank within a short time.
Airbnb is a vacation or short-term home rental service founded by Brian Chesky, Nathan Blecharczyk, and Joe Gebbia, and based in San Francisco, California, and is a marketplace for tourism, lodging, and homestays for vacation rentals.
The company kicked off in 2008 and is easily accessible through its mobile app and website. Its original name is AirBedandBreakfast.com and was later shortened for what it is known to be today – Airbnb.
When it started, it only covered areas around its home country. But it has since expanded to include rental properties across several other countries.
In fact, in 2020, it already had over 4 million hosts, over 100,000 cities in active listings, over 800 million guest stays, and 5.6 million active listings!
So, how do you get started with Airbnb?
Airbnb requires that you list rental space for accommodation which could be just a private room or an entire house. So, if you have free spaces around your house, you could leverage them for some extra income on Airbnb. The interesting thing is that you could gradually turn this into a full-time job!
Airbnb allows travelers to experience an area like a local with more privacy, unlike hotels. Guests are often drawn to unique accommodations such as boats, treehouses, tiny houses, castles, and yurts.
Airbnb also allows different groups to split the cost of rent while dining expenses can also be reduced with kitchen access.
The Opportunity of Airbnb Hosting
Data from the Airbnb website in October 2020 has revealed that hosts have earned well over $110 billion through the platform. A host is estimated to earn about $7,900 per year.
According to Earnest, a lending company, an average monthly income for a host on Airbnb is $924, while the median income per month is $440. The company actually gave different host earnings – while some raked in $10,000 and more, some others earned just $200 and below.
When you become a host with Airbnb, you’ll find other profitable opportunities to leverage. You could be encouraged for more travel through the links you build from the guests you receive, or you could rent or buy more properties for the business. Harness the company’s earnings potential calculator to find an estimate of how much you could earn.
How Airbnb Hosting Works
To get started with Airbnb, the first thing to consider is to create a listing. Include all the necessary information, take very clear and fascinating photos of the spaces you are putting out for rent while also emphasizing the reasons why your spots should be considered better.
You can create different rates based on the season, day of the week, location, etc. Airbnb offers hosts the option of using the Smart Pricing tool that automatically adjusts the rates of your listing based on demands in your locality, time of the year, and several other factors.
Posting your listing is totally free. However, the company will charge you a service fee of 3-5% when a reservation is made. Airbnb provides hosts a Host Guarantee that may offer as much as $1million in property damage protection.
They also offer Host Protection Insurance – a liability insurance program that may offer as much as $1 million in liability coverage. For some countries that are not covered, you would have to purchase additional insurance.
There are different rules as regards short-term rentals given by home insurers and what they cover or will not. Some insurers offer specialized policies for short-term rentals. Be sure to find out with your insurance company before you host, to be sure that the policies are clear.
Gauge Your Commitment to an Airbnb Business
Before you begin as a host on Airbnb, ensure to acquaint yourself with challenges that you may be confronted with on the platform. For instance, issues with logistics are cogent. Another is the time commitment you’ll require to offer great customer support for your guests.
Do You Have The Luxury Of Hosting Time?
You’ll require so much effort to create a successful Airbnb hosting business. You’ll need sufficient time to respond to booking inquiries. You’ll need to be on the ground to respond to guests’ queries during their stay. You’ll need to do some cleanups in-between reservations, and also do needed repairs. All that can be quite demanding and time-consuming.
While there are aspects you’ll have to handle yourself, there are quite a few things like cleaning that you can subcontract, especially if the extra costs will be worth it to ease some of the hosting demands.
Be Sure Your Space Is Appealing For Rent
Be sure that every hosting hurdle is taken out of the way. Consider municipal laws, neighborhood expectations, and lease limitations before you fully dive into the hosting business.
Look at possible required permits in your country, state, or city. Check for licenses, safety certifications, and extra insurance that you might be needing. The company offers resources that help hosts learn about regulations in different locations and also encourages host clubs to help hosts connect with each other to share knowledge and ideas.
Count All the Costs Before You Kick-Off
When launching into your hosting business, be sure you are determined to take it as a serious business.
Create a business plan. Set goals. Decide ahead, how much you’ll be ready to commit in terms of time and energy to the business.
Put extra costs such as extra laundry, an uptick in utilities, and any welcoming incentive you have in places such as snacks and coffee. The cost of getting a license for your business, extra insurance, certifications, and others, will add up also. Track down your hosting expenses and keep receipts for settling tax.
Taxes on earnings must be received from guests in some areas. The location you are will determine the kind of tax that is paid and how it will be collected. Hence, it is always advised when necessary, to include all required tax information in the listing description.
Steps to Starting a Successful Airbnb Business
To get started with the rental business on Airbnb, there are a few things you must ensure to do to put you at a vantage point of recording more success. Some of what you need to get right include creating an inviting description, host rating, well-staged photos, etc. Here are steps that will help.
1. Prepare Your Airbnb Listing
One feature of a good listing includes having an inviting and accurate description and basic details of every necessary detail of the space that potential guests would love to have. For instance, disclose how many rooms and bathrooms that are available, what’s nearby the property, and what amenities will be available to the guests.
Talk about specific things that may affect the guests like the parking space, stairs, and be a sincere potential quirk in your space. Also, state things that make your own space unique. For instance, it may be a huge yard or walking distance from downtown.
2. High-Quality Photos
When taking photos of your space, make them top-notch. Your photos will go a long way to make your prospective guests decide on renting your space. Clean up the area before taking the pictures. Use sufficient natural light, and add extra professional lighting where necessary with landscape orientation.
A better way to get your head around making the best decision is to imagine yourself as the guest and set up the space in a way that you’ll willingly pay for it.
3. Consider Extra Touches
Extra touches such as offering local snacks or drinks can be an added incentive to make your guests feel more at home. You may also want to ask them if they are celebrating a special occasion during their stay. You can hang up a congratulatory banner to make them feel special.
4. Improve Your Host Rating
Getting good reviews is essential to the improvement of your host rating and search ranking as well on the platform. According to Airbnb, good reviews can be gotten through factors such as cleanliness, accurate listings details, provision of essential amenities, proactive communication, and a smooth check-in process.
5. Grow Your Business
After acquainting yourself with hosting on Airbnb and discovering what works with your space and lifestyle, you can go ahead to expand your hosting into a full-time venture. It depends on your goals, you can continue to grow your business by adjusting your hosting approach, adding more properties, and catering for every listing.
When you host with Airbnb, you’ll be exposed to a wide range of opportunities to boost your revenue. Imagine what the empty spaces would be doing if they weren’t generating extra income for you on Airbnb.
To also add that you can customize the situation with whatever appeals best to you and your expectations is something to really consider. Your decision to either devote part of your time or full into the business will determine how successful it would eventually turn out.