Updated: Mar 10, 2021
Before Coronavirus brought the world to its knees, travelers made Airbnb the ultimate peer-to-peer short-term rental service. It still is of course, but the vacation industry is suffering. With people not vacationing as much and working from home, the market for hotels and airbnb homes has become considerably smaller. And that is why this is the best time to get into this highly profitable business. I know it may seem difficult to imagine now, but the existing turmoil brought on by the pandemic will become history, and people will resume traveling and vacationing. Renting out your home, room or even couch can be one of the most lucrative ways to make money passively. Why not get started now while competition is low? This post will show you how.
What is Airbnb?
Sometimes when people travel, they want the feel of home away from home. In addition, travelers may also want these short-term rentals at a lower cost than the standard hotel room. If you have a room or an entire home available to rent out, there is no better platform than Airbnb.
For over a decade now, Airbnb has made it simple and secure to host travelers in your home. With their platform streamlining the entire process, you remain in full control of your availability, prices, house rules, and how you interact with guests. And the potential for healthy income is not easy to ignore. In my region of Los Angeles, Airbnb says I can make up to $3,579 per month renting out my home.
How to List Your Space on Airbnb
Listing on Airbnb is free, but there are many factors to consider before you take your first steps. Your first would be deciding when exactly to make your space available and at what price. To figure out the proper price of your listing, you'll want to research the going rates of similar listings in your area. You'll also want to factor in the costs of hosting, which may include cleaning, taxes, utility bills, Airbnb's host fee of 3%, and even a management fee if you'd like to hire someone to take care of the property to make this a truly passive endeavor.
As you create your listing, stay within Airbnb's guidelines by being truthful with the description of your space and providing basic amenities such as toilet paper and soap. When writing your description, take note of what makes it unique and worthy of an out-of-towner wanting to explore your area. Some of the features you may want to mention include: Walking distance to public transportation, nightlife, restaurants; Does your place have wireless internet, cable television, a backyard, etc? If you aren't honest with your description, your customers may feel gypped and write you a bad review.
Declutter, clean and take excellent photos. If you're an active customer of Airbnb, they will even send a professional photographer to capture your home for free. You will also want to be a great host by maintaining solid communication with your guests and ensuring their reservations are met.
Personal Safety and Legalities
Keep in mind, not every city is friendly to Airbnb. You will have to research the laws in your town. And even if your town is okay with airbnb hosts, you may still need to get permission from your building. Check your lease to see what your building's managers are allowing, especially if your property is controlled by the HOA.
In terms of safety, if you’re not at home when your place is being rented out, you may not have to worry about yourself. However, for your guests, Airbnb provides guidelines to make your home safer to minimize risks of your guest getting injured. This includes smoke and carbon monoxide detectors. Without the proper precautions, you also risk the potential your guest will give you a nasty review. High ratings are essential to your success on Airbnb. In addition, if you're continually negligent, Airbnb may kick you off the platform all together.
In terms of your possessions, find a safe place to store anything of high value to you. Your pricy electronics, jewelry, emergency cash, even your social security card should all be things you keep safe and hidden. You can also individually approve potential guests by glancing at their reviews and ratings. If you are staying in your home while your room is being rented out , you may also want to do a criminal background check and even a little internet sleuthing.
Insurance and Payments
One of the biggest concerns you may have is liability. But worry no more since Airbnb provides insurance. Airbnb guarantees up to $1 million in insurance coverage for property damage in 29 countries. This includes the USA, UK, and Canada. Nevertheless, it'd be a good idea to have homeowner's insurance, which would be primarily used before Airbnb's liability insurance. Never forget to read the fine print, as all insurance has its limitations. For even more coverage, explore the option of an umbrella policy.
While Airbnb’s host guarantee doesn’t guard your property against wear and tear, you can still protect yourself by charging a security deposit, as you would with a long term rental. In addition, after each guest checks out, either you (or someone you hire) should inspect the space for damage. If you do need to file a claim, make sure you take adequate photos to document any damage. For claims over $300, you’ll have to file a police report.
One of the benefits of Airbnb is how they streamline the payment process. Guests pay you through the Airbnb platform. Contingent on how smooth everything goes, Airbnb releases your payment within 24 hours of your guest’s check in. If your guest is unhappy and requests a refund, Airbnb will notify you. This can be for a variety of reasons including cancelling a reservation, lying about your listing and failing to meet Airbnb's standards of safety and hospitality.
An Exciting Platform
Airbnb is an exciting platform to make substantial income with your living space. While not as passive as some of the other entries on this blog, it still has potential if you outsource everything. You can hire people to clean the property and even hire people to advertise it on social media. Airbnb provides resources to do both and more. And as mentioned, do your due diligence by researching local laws and what is allowed by your building. If you're willing to take a little risk, fortune can be yours with a little effort.