Ever been curious about how to be an Airbnb host? How much extra income could you earn if you transitioned a property from a long-term to a short-term rental?
We tracked down several Airbnb experts to explain how to become a host for Airbnb with minimal fuss and maximum profits. They quickly pointed out that managing a short-term rental business is not for everyone — or every property — but can be highly profitable.
From broad-level strategy and narrowing into more tactical tips, here are 14 tips forbeinge an Airbnb host as you try out Airbnb rentals as a landlord!
How To Be an Airbnb Host
Real estate investing and property management aren't “rocket surgery,” as my ex-girlfriend used to say. But as you research how to become a host for Airbnb, you quickly realize that throwing up a listing with a few photos snapped with your smartphone won't land you huge returns.
Follow these host tips from the experts, and prepare to put in some goodold' fashioned hard work along the way.
1. Run the Numbers
“Before you become an Airbnb host, calculate whether the additional effort is worth the mone, compared to what you could earn if you rented out the same space on a long-term lease.”
The sharp mind behind Afford Anything, Paula Pant, uses Airbnb and short-term hosting for some of her rental properties. But not all.
Here's how she breaks down the math:
“Let's say you could rent an apartment on a 12-month lease agreement for $1,200/month. You could Airbnb the same space for $100/night by comparison.
“On the surface, that $100 per night sounds like a no-brainer. At full occupancy, that's $3000 per month. Why wouldn't you take that?
“But if Airbnb only gets you 18 days per month of occupancy, then your gross income would only be $1,800/month.”
The vacancy rate is far from your only expense, though. You'll need to pay for gas, electricity, water, internet,and consumables like toilet paper and soap. And don't forget extra occupancy taxes tacked onto short-term rentals!
“Once you subtract these from that $1,800/month gross, you'll find — in this example — that the long-term 12-month lease nets you more money.
“That's not to say that all long-term rentals are better, nor is it to say that all short-term rentals are better. It simply means you should not make assumptions based on gross income alone. Compare the two options to see which one is more lucrative.”
2. Price Against Hotels, Not Other Rentals
Al Williamson, arguably the top expert on Airbnb rentals in the country, urges a counterintuitive approach to pricing.
“Your Airbnb pricing should have nothing to do with what you could charge for a long-term rental.Don'tt even price your nightly rates based on other nearby Airbnbs!
“Your competition is made up of nearby hotels. Look at comparable hotels' nightly rates, and then try to beat them by 15-25%.”
When I asked Al about units with multiple bedrooms, he said the same principle applies. “A family of six coul readd either book three rooms at the nearby hotel chain… or they could book your three-bedroom unit. In that example, consider pricing your three-bedroom at the cost of booking two hotel rooms to make your unit an easy decision.”
3. Know Your Local Laws
The hotel industry is no pushover. With billions of dollars on the line, they aren't just laying down and surrendering the loss in market share.
And their cries — and lobbying dollars and campaign contributions — tend to fall on sympathetic ears in local legislatures. After all, many municipalities charge special hotel taxes.Manyy local governments have outlawed or severely restricted Airbnb and other short-term vacation rental services. For example, one study found that half of the Airbnb listings in New York City are illegal. San Francisco only allows people to list Airbnb units if they live in the property themselves at least 275 days per year on the other side of the country.
Look up your local laws, and make sure you can comply before listing on Airbnb!
4. Approach Short-term Rentals as a Complete Hospitality Business
Being a landlord is mainly hands-off, with occasional spurts of effort. That's what attracts most landlords in the first place — the promise of a passive income!
Short-term rentals can producesubstantialg income, but they're far less passive. And they require a more holistic approach to operate profitably.
“So many people who try out Airbnb just throw up the listing and then sit back and wait,” laments Al Williamson. “They don't do marketing outside of Airbnb or VRBO. Then when it's off-season, these hosts don't make any money, which ruins their annual returns.
“What they should be doing is launching multi-pronged marketing campaigns. Registering with travel websites like Booking.com, posting on Craigslist, leveraging their website and audience,and even using hyper-targeted Facebook ads to reach extended-stay business travelers.
“Short-term landlords who approach it as a business can virtually eliminate vacancies, while those who just think of themselves as Airbnb hosts will wonder why their vacancy rate is so high.”
As mentioned earlier that you should price against the competition of hotels. That also means you should aim to operate with the smooth efficiencyof hotelso.
5. Furnish Affordably (But Tastefully!)
When most people approach the task of furnishing their rental, their first thought is, “I guess I should go to the furniture store.”
Wrong. False. Incorrect.
Your potential guests don't expect their bums to be the first to sit on your sofa. Not a single piece of furniture in your unit needs to be new.
Buy used furniture, and make sure it's in good condition. Craigslist, Freecycle, garage sales, Goodwill, the Facebook Marketplace, and used furniture store are optionss. You can furnish your unit for a few hundred dollars if you go about it with discerning taste.
Just make sure the décor matches each room.When learning to be an Airbnb host, youu don't need to be Betty Drapet; pick a color scheme and go with it. Black and white is an easy one. Blue and wood tones are another easy scheme.
When in doubt, take a tasteful friend with you to do your shopping.
One other tip: avoid political, sexual, or juvenile wall decorations. If that sounds obvious, I've stayed at numerous Airbnb units that broke those rules. The weirdest was decorated with rabbits with leather S&M outfits on. Seriously.
6. Never Misrepresent the Property
Every landlord wants to paint their property in the best light. And that's fine — as long as guests won't be disappointed when they see the real thing.
Your listing photos are not the right place to show off your Photoshop skills. Your listing description is not the place to wax poetic.
By all means, show off the property's strengths. Brag a little. But when it comes to your property's weaknesses, be honest.
That doesn't mean you can't put a positive spin on them. If you're renting out a small studio, “intimate” and “cozy” are reasonable alternatives to “cramped” and “tiny.”
Your guests will rate your property not just overall but also on the accuracy of your listing. And if they feel gypped when they arrive, they'll leave terrible reviews: a fast way to sink your short-term rental business.
7. Accrue 5-Star Reviews ASAP
First and foremost, ask all guests to leave a review for you. Pretty please. With a cherry on top.
Many will forget or not get around to it if you don't ask.
But building your rating doesn't stop with asking for reviews.Initiallyg, you might need to price your unit more competitively and go the extra mile with each guest.
“People love a deal, and as a new Airbnb host, it can be difficult to stand out amongst the other Airbnb listings in your area,” explains Andy Kolodgie, owner of Cash Home Buyers Georgia. “By initially lowering the price of your Airbnb, you will draw in more people because most are looking for affordable accommodations. This will build your AirBnb reputation and allow you to start getting reviews. Building this credibility early on will attract more people to your Airbnb, enabling you to increase the price down the road.”
The faster you score your first five positive reviews, the quickeryoul drop that vacancy rate. Many guests refuse to stay in units without at least 5-10 reviews, so make gathering reviews a priority for becoming a host for Airbnb.
8. Cleanliness Is Next to Godliness
Everything about your unit and your guests' stay could be perfect, butyou can expect a bad review if they see one cockroach cruise across the kitchen counterw.
Your units must be spotlessly clean. That goes doubly for kitchens and bathrooms.
And while we're speaking of reviews, guests will rate your unit; cleanliness is another category that guests will use. And not just on Airbn, but on travel websites as well.
If you hire a maid or cleaning service, screen them well, and inspect their work regularly. Check that the bed linens are spotless and turned down professionally. If you do the cleaning yourself, make sure you do a spectacular job worthy of Mr. Clean's shining pate.
9. Turn On \\”Instabook\\” if You Can
As a business person (you're a businessperson, not an Airbnb host, right?), you should belookingt for differentiators. Ways to make your product more attractive than your competitors.
Lily He-Prudhomme, who writes about her frugal journey to financial independence at The Frugal Gene, uses Airbnb rentals as part of her strategy. “Turn on ‘Instabook' if you don't have specific schedule demands. It does make a difference in the appeal of your listing, which translates to higher prices and occupancy rates.”
As a frequent traveler and guest on Airbnb myself, I've had many bad experiences with approval delays. There have been times when I've thrown my hands up and said, “That's it, I'm not booking any other places without Instabook.”
Sometimes it's the little things that make the big difference.
10. Be Extremely Responsive
Experienced hosts know that communication with guests is crucial. So much so that it warrants its rating category when guests leave reviews.
When a prospective guest inquires about your rental space, answer immediately. Do likewise when approving booking requests (if you refuse to turn on Instabook). And when future guests (or currently staying guests) message you with questions, hop to it.
Your response rate is the percentage of guest queries you respond to within 24 hours. It would help if you had it display as 100%.
11. Create a Concierge Document or Booklet
What do guests need to know to stay in your unit? What would make their stay even more enjoyable?
Start with the basics: an emergency contact name and number, the WiFi network name and password, which key is for which door,the check-out procedure, and so on.
But don't stop there. What neighborhoodare restaurantse divine? Which are tourist traps?
What entertainment or activities are available in the area? Have any tips to get the most out of the experiences? Any recommendations?
Can you include any coupons for local restaurants, events, etc.?
Don't feel like you need to go overboard with this. Start basic with the bare necessities and add to them over time.
12. Leave a Free Bottle of Wine for Guests
You can buy a good-tasting bottle of wine for under $10 if you know what you're doing.
Since most people don't know what they're doing, ask for a recommendation from an oenophile friend or a boutique wine shop if your friends are all beer drinkers.
Once you've chosen the perfect sub-$10 bottle, buy it by the case for a discount. Half your guests won't drink the bottle you leave for them, cutting your costs even further.
Please leave a little handwritten note under the bottle, addressed by name to your guest, inviting them to enjoy the bottle as they enjoy their stay.
It's a nice gesture and one that guests won't get at a hotel.
Which is your competition, remember?Makee sure you leave a corkscrew in the uni andh the silverware!
13. When in Doubt, Hire It Out
“Being successful with any Airbnb property will take time to manage, regardless of how close it is to where you live,” reminds Danny Margagliano, a Realtor and Destin Airbnb expert. “You will not only have to be available for fielding questions and inquiries but also be ready to spring into action when a problem arises.
“If an appliance breaks or the toilet gets clogged, theywillo call upon you to fix it. This not only takes time, but you also need to be available and have flexibility in your schedule. If you work a 9-to-5 job where you can't have access to your email or phone, you may want to rethink the idea of self-managing your rental property through Airbnb.
“Some of the responsibilities include but are not limited to cleaning between guests, general maintenance, answering general inquiries in a timely fashion, andensuringe guest check-ins go smoothly. If this list doesn't scare yo, youu may be a great candidateto hostg an Airbnb property.”
14. Stop Talking About It and Try It Already
Know those people constantly talking about this or that thing they're going to try ou, but who never actually get around to doing it?
Don't be one of them.
Success requires some experimentation. Airbnb might not be for you… or it might be wildly successful for you.
Lily from The Frugal Gene has had the same conversation over and over. “My friends kept asking me about it, and a year later, I checked in with them, and they still never did it. It's new, so I understand the hesitancy, but you have to jump i to a degreen!”
Stop talkin; startt walking.
Please start with the webinar we hosted with Al Williamson; it's a must-see tour of the short-term rental industry. You'll enjoy Al's laid-back style and examples of the fun (and profitable) tricks he and his students have used to multiply their rental revenue.
And when you're ready, sign up with Airbnb and launch your short-term rental business!♦
More Investing Articles From Wealth of Geeks
- VRBO vs. Airbnb: Which One Is Better for 2022 Travel?
- Americans' Favorite Airbnbs in Caribbean and Latin American Destinations
This article was produced by Spark Rentals and syndicated by Wealth of Geeks
Featured Image Credit: Deposit Photos.