If you’ve traveled anywhere within the past ten years you’ve probably booked a place to stay with Airbnb or at least used the site to check out what’s available. Airbnb is an online marketplace that allows everyday people to rent out various spaces for a short period of time. The name is short for Air Bed and Breakfast. It came from the idea that the founders had to charge people to sleep on an air mattress in their house to help pay for their expensive San Francisco rent. Now you can list anything from a couch to a full house on the site. It may seem overwhelming at first to have strangers in your home but there are many different ways of hosting and who doesn’t want to make a little extra side money these days? Here are some of the steps to becoming a host and tips to help you along the way.
Weigh Your Cost Against Your Profits
One of the first things you want to consider is how much you will potentially be making as a host versus how much it will cost you to be one. Obviously, if the latter number is higher you may want to choose a different form of income. Airbnb actually has a free income estimate calculator on its website. Just input your city and what type of space you’ll be hosting and how many people it can accommodate and voila! Of course, this is just an estimate, based on 50% occupancy per month, so keep in mind other factors at play like special local events or overall travel patterns. This tool is also great because it shows you similar listings in your area which can help you get an idea of how your space compares to others on the market.
How to Minimize Your Costs
Even though listing a place on Airbnb is free there are other costs and fees to take note of. Airbnb does charge a “hosting fee” that is usually 3% of the rental income. There is also the Transient Occupancy Tax (TOT) that most cities charge ranging from 10-20% of your income. Then there is the host protection insurance to consider. Airbnb provides US hosts with this insurance but you may want to look into getting your own depending on what you’re comfortable with. Other costs include the toiletries your guests will be using, the cleaning costs between guests, and any initial startup fees to prepare the space like fresh sheets or decorations. “Superhosts” suggest that you incorporate as many of these costs into your listing price to help increase your bottom line.
Is It Even Legal?
Maybe before making any calculations, you’ll want to know if it is even legal to be an Airbnb host in your city or neighborhood. Believe it or not, not all cities allow it while others require a permit or license or for you to register your property. Check with your city’s website on its policies and laws concerning short-term rentals. In addition, you should also review your lease or check with your landlord if you’re renting.
Can You Meet the Basic Requirements?
Lastly, you should be confident in your abilities to meet Airbnb’s host requirements. They’re fairly simple and straightforward but if you cannot meet these obligations then maybe opt-out. Airbnb lists five basic conditions of being a host:
– Provide all necessary toiletries, linens, and one towel and pillow per guest
– Respond to your booking requests within 24 hours
– Accept requests when you’re able to
– Maintain high ratings from guests
– Avoid cancellations since Airbnb’s cancellation policy is pretty intense
If all of the above works in your favor then you’re well on your way to becoming an Airbnb host and earning some extra income. It really is a great way to make money, meet new people and exercise your managerial skills.