Airbnb For Beginners: The Ultimate Guide To Listing Your Space For Extra Cash
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Unless you live in a cave, you've probably heard of Airbnb by now. You may have even stayed in an Airbnb property. But now it may be time to consider listing your space on the popular website. Doing so can mean paying off your mortgage early, or simply enjoying extra pocket money. If you're wondering just how much cash you could earn, take a look at Airbnb's earnings estimator.
Airbnb began as an idea between two roommates who saw an opportunity to provide airbeds on their living room floor during a design conference in San Francisco. All of the local hotels were booked, and they saw an opportunity to make some cash. Fast-forward 11 years and those roommates have developed a business which is worth more than $30 billion. While you probably won't become a billionaire by listing your home on the website, there's still an opportunity for serious cash to be made.
How does it work?
The Airbnb concept is incredibly simple. You determine what you're willing to offer guests – either a room in your home or an entire home – and create a listing on the website. You describe your space and how many guests it can accommodate, and add relevant photos and details.
Once someone is interested in your property, they can book online and you receive your earnings on the day they check in. You can be there to greet them in person, or simply send them a door code. Airbnb takes a 3% service fee, and you get the rest.
The best part about Airbnb is that you're in control. You can choose when to accept guests, and you decide when they check in and check out. You set your rates. You do it all. But Airbnb still offers 24/7 support, so you have an added layer of security.
If this sounds appealing, you might want to consider listing your property on Airbnb as a way to pay off your mortgage quickly, or to have extra cash to pursue other goals.
Before you commit, however, make sure you do your research. After all, an informed host is a good host.
What do you have to offer?
The first thing you should do is determine what you can offer guests. Do you have an extra bedroom to list? Great. Does it come with its own en-suite bathroom? Even better. Are you willing to let guests use your washer and dryer and cook meals in your kitchen? Both of those things will make your accommodation more desirable. Or, maybe you have an entire home to list and you're therefore able to offer all of those amenities and more.
The next step is to determine the desirability of your location. If you live in Manhattan, you won't have any problem listing a sparse room in your tiny apartment. You can probably keep it consistently occupied, too.
If you live in Middle of Nowhere, USA, you'll have a harder time keeping full occupancy. But that doesn't mean you shouldn't be a host. There are things you can do to help your property stand out, in order to encourage those who do need accommodation in your town to stay at your place.
For example, many Airbnb hosts make their spaces themed, which creates a fun atmosphere for guests. A beach-themed space might have sailboats and seagulls scattered everywhere, while a vintage-inspired space might feature a record player and mid-century furniture. Pick a theme, have fun, and know that decorating your place doesn't have to be expensive. Thrift stores, garage sales, and your grandmother's attic are your best friends.
You can also offer additional perks which guests are sure to appreciate, such as a stocked refrigerator, a bottle of wine, or bicycles they can use anytime they choose. Other added touches include providing local maps and guidebooks, or welcoming pets. Small, thoughtful touches can go a long way.
Is it worth buying a property to list on Airbnb?
If you're interested in hosting guests on Airbnb but don't actually have any extra space to list, you may want to think about buying an investment property for this purpose. Just remember that there are many things to consider, such as the cost of your mortgage, insurance, and property taxes.
It should go without saying, but don't pick an area where your mortgage and taxes are so high that you have to host dozens of guests before you even begin turning a profit on Airbnb. Some cities are also starting to increase the red tape involved with being an Airbnb host, so make sure you buy in a city which embraces the model.
You should also choose an area where people want to be. You may find a great house for $50,000 in a small town in Oklahoma, but that town probably doesn't see many tourists. Before you buy a place out of town, be sure to do your research on local property managers.
Should hosts be concerned about property damage?
This is a common concern among people who host on Airbnb, and rightfully so. After all, the idea of letting strangers stay in your home can be daunting. However, Airbnb does everything within its power to protect those who list properties on the website.
For starters, the website verifies guests by requiring a profile photo, confirmed phone number, and confirmed email address. Hosts can also ask potential guests to provide an official ID and complete the site's verified ID process.
In the rare event that guests cause damage to a property which exceeds the security deposit, Airbnb offers protection insurance with coverage of up to $1 million per occurrence. The same amount of coverage is provided in the event of bodily injury claims. This coverage is automatic for every Airbnb host, so you can relax and know that you're well taken care of.
Would you actually enjoy hosting?
Anyone interested in placing their property on Airbnb should be aware that it's not really the real estate industry – it's the hospitality industry. Unlike traditional rental scenarios where tenants sign a long-term lease and then leave the landlord alone until something breaks, Airbnb requires more of a hands-on approach.
The number-one thing to consider is turnovers. Hosts are responsible for cleaning the property and washing linen every time someone checks out. Think about whether you're happy to do the cleaning yourself, or you'd rather hire someone to do it. If you'd rather bring a housekeeper on board, investigate how much that will cost and whether it makes sense to do.
To be a successful host, you need to be a people person and you need to be on hand (or hire someone who can be) to address problems, questions, and concerns. Expect to get phone calls ranging from “how do I use the oven” to “I can't find any forks.” Complaints will range from “the water pressure isn't good” to “I found a hair in the bathroom.”
No matter how ridiculous the complaint or question, hosts generally have to grin and bear it. They know that reviews matter – and no host ever received a good review by being impatient and grumpy towards their paying guests.
That being said, the majority of people who use Airbnb are only looking for a clean, convenient place to stay and are very respectful and kind. People from all around the world use Airbnb, so hosts have the opportunity to make friends from different countries and cultures.
Can you actually earn decent money through listing your property on Airbnb?
Absolutely. Some people have even managed to quit their full-time jobs and live solely on the income. That scenario is the exception rather than the rule, but who cares? Any extra money is good money.
Many people enter Airbnb with the intention of paying their monthly mortgage payments with their profits. A February study from Homes.com looked at the feasibility of doing just that, analyzing the average nightly rates of Airbnb homes versus the average monthly mortgage.
It found that the average person in Akron, Ohio, would only have to have guests for an average of 4.21 days to be able to completely cover their mortgage payment. This makes sense, as Ohio house prices are comparably much lower to those in other states.
The study also looked at potential profitability, taking the difference between the average daily mortgage cost and the average daily Airbnb rate in various cities. Virginia Beach came out ahead, with an average profit potential of $183.33 per day.
While no particular study or guesswork can predict your own personal success on Airbnb, you can make an educated assessment if you conduct enough research before listing your property. Airbnb can give you a ballpark figure of your earning capability.
If you're still unsure, just give it a try. You can stop being a host at any time – but if you're like most people, you'll enjoy being part of the global Airbnb community (and the extra cash it brings).