There’s no question that pretty much everyone could use some extra income. If you’re one of the many looking to boost your bank account in a fun and innovative way, then you might consider hosting on Airbnb.
After all, turning your home into an Airbnb doesn’t just allow you to cultivate a second revenue stream for your family, but it also gives you the opportunity to meet new people, share new experiences, and enjoy the process of transforming your property into the ultimate vacation destination.
However, hosting an Airbnb isn’t all lollipops and unicorns. There are potential challenges for which you should be prepared. This article explores the top four things you should keep in mind when deciding to host your pad on Airbnb.
1. It’s a Business
Being an Airbnb host can feel like a lot of fun and games, but if you’re going to turn your property into a true revenue-producer, that means you must treat it, first and foremost, like a business. That means, for instance, ensuring that you’re in compliance with all applicable local, state, and federal laws and regulations.
You’re also going to need to maintain meticulous records, including tracking income and expenses, keeping up-to-date with insurance, and staying current with your tax records. After contemplating this workload, decide if being an Airbnb host is right for you and your current situation.
2. There’s Plenty of Preliminary Work
Hosting an Airbnb involves much more than simply slapping a listing on the website, sitting back, and waiting for the bookings to begin. There’s a good deal of prep work that needs to occur, even for the most welcoming and well-appointed of properties.
For example, when you’re preparing to launch your Airbnb enterprise, you need to consider the kind of niche your property will occupy. Decide if you want to serve primarily families on vacation, singletons looking for adventure, or professionals on a business trip. Your niche will strongly determine how you market your listing and what kind of services and amenities you plan to offer your guests.
The planning and prep work doesn’t stop there. You will also need to decide on how you will operate your business. Ask yourself:
- How many times do you plan to rent out your property per year or season?
- Will you rent out the entire property while you are away, or will you rent out a room or section of the home while you and your family are in residence?
- Will your Airbnb be a primary source of income or a secondary one?
How you answer these questions will determine operational issues that need to be resolved, such as the scheduling of rentals and the upkeep and maintenance of your property.
3. You Will Have Bad Guests
In general, hosting on Airbnb is a largely positive experience for most property owners. Most guests are respectful of your property and your house rules. Many become loyal customers, and some even become lifelong friends.
With the good, though, inevitably comes some bad. No matter how careful you are, you are almost certain to encounter the occasional bad Airbnb guest. These include the ones who are rude, demanding, and disrespectful of house rules.
The good news, though, is that there are things you can do to mitigate your risk of booking a bad guest and minimize the impact when you do. For example, you can turn off the automatic booking feature on the Airbnb website. This enables you to comprehensively research the prospective guest before you finalize the booking. Research guest reviews and profiles to help you identify potentially problematic bookings.
In addition, it’s important to clearly outline your guidelines for renting your property. These should include the terms and conditions under which a disruptive guest can be expelled before the expiration of the rental. You may also charge cleaning fees or hold guests responsible for any damages. Ensure that these guidelines are clearly posted in multiple areas including on your property listing and booking contracts.
4. Energy Efficiency Is Key
When you turn your property into an Airbnb, you’re setting up the space for heavy use. If you don’t want to shell out cash to manage high energy costs, it’s a good idea to invest in some energy-saving home systems to reduce consumption and costs.
Installing ENERGY STAR-certified appliances, for example, can result in significant savings, both in terms of how much energy you use and how much you’re paying out of pocket each month in utilities. Best of all, by taking small, consistent steps to reduce your overall carbon footprint, you will have the satisfaction of owning a property that is both profitable and environmentally friendly.
This can also serve as a highly attractive marketing feature for prospective guests. Highlight your minimalist kitchen aesthetic, eco-friendly appliances, and commitment to sustainability on your Airbnb listing. People that care about the environment will likely feel favorably toward these aspects and be more likely to book.
The Takeaway
Airbnb has been a business phenomenon, transforming property owners into entrepreneurs. Hosting an Airbnb can be a rewarding way to cultivate a second revenue stream. However, before you decide to take the leap into hosting, it’s important to plan ahead, do the prep work, and treat the endeavor like the business it is.