With many people around the world joining the vacation rental industry, the AirBnB business has quickly risen to popularity. Air Bed and Breakfast (AirBnB) is a service that lets property owners rent out their spaces to travelers. Guests can rent out a space for multiple people to share, a shared place with private rooms, or the entire property for themselves. Airbnb was founded in 2008 to help people find affordable hotel and hostel alternatives around the world.
- 1 How to Start an AirBnB Business
- 2 How much Does it Cost to Start an AirBnB Business?
- 3 AirBnB Host Requirements
- 4 What is an AirBnB Superhost?
- 5 What is AirBnB Plus?
- 6 How to Make Money on AirBnB without Owning Property
- 7 AirBnB Alternatives
- 8 Is AirBnB Profitable?
- 9 Final Thoughts on How to Make Money with AirBnB
How to Start an AirBnB Business
Starting an AirBnB business does not require you to have considerable funds to get started. Moreover, you do not need to own property to get started. The following is how to start an AirBnB business:
Conduct your Market Research
Just like any other business, it is best to do your homework first before starting an ArBnB business. Vacation rentals will make you good money if you choose a good location for your property. If you are an agent and you do not have much choice about the location of the property, it is best to take on deals that involve properties located in strategic locations. One of the aims of starting an AirBnB business is to make money and if you are to make money, your property must be safe and accessible to potential guests.
Calculate the Worth of your Property
Before you list your property, first determine the property’s actual value and figure out how much you could charge. For a start, you can do this by comparing your property to existing AirBnB listings. Find out what other property owners in your area are charging. Factors to consider when setting your prices include appearance, size, location, quality, and guest capacity. You will also want to consider hosting costs including higher utility bills, cleaning, taxes, and AirBnB’s host fee. AirBnB fees for most hosts is 3% on each booking. Guests will pay a fee of between 6% and 12%.
Prepare your Property
Guests will want to see a clean and appealing space before they choose your space. Preparing your property includes furnishing and decorating it. If your budget allows, use the best AirBnB appliances and upgrade your existing home devices to smart home devices to impress your guests. Once your property is furnished and decorated, take nice photos that you will show to your guests. However, make sure the space is clean before you can photograph it. The photos should help to make your listing stand out so guests will click on it in the AirBnB search results.
Find Out About Local Hosting Regulations
Depending on your location, you need to find out the local laws, taxes, and permits specific to AirBnB Hosts. To be compliant with your local laws, it is important that you know if you will need AirBnB permits, a business license, or if you will need to pay taxes.Visit AirBnB Help Center to learn about hosting requirements in your country or city.
Does your local government regulate short-term rentals? What taxes do Airbnb Hosts in your area need to pay, and who calculates and collects them? Does your building manager allow Airbnb guests? Questions like these are key for anyone considering becoming a Host—and those already welcoming guests. While Airbnb can’t provide you with legal guidance or tax advice specific to your area, we can help you find the information you need to feel ready to start hosting.
How to Create AirBnB Account and How to List your Space on AirBnB
Before you can list your property on the platform, you need to sign up by clicking on “Sign Up” on the website. Select your country, input your phone number (a text will be sent to you for confirmation).
There are several platforms through which you can list your property. However, it is recommended that you start with AirBnB. Listing your space is usually free. When listing your space, make sure to create list of all your amenities and benefits (e.g. Wi-Fi, tourist hotspots, cable television, a fully stocked kitchen, etc.) and write about yourself so guests can know you better. It is also best to write down your AirBnB house rules so that your guests will use your property with care. AirBnB only collects a small percentage of your nightly rate. You can host when its convenient for you; all the time or just a few days a month. After you publish your listing, it may take up to 72 hours for it to appear in search results.
During the process of listing, you can choose the type of AirBnB host you want to be. You can be a full-time host, part-time host, occasional host, co-host, or the host of an Experience.
Your listings may be suspended if you fail to meet the basic requirements overall rating, response rate, accepted reservations, or cancellations. If your listing is suspended, it won’t show up in search results and you won’t receive any new bookings. You’ll have the opportunity to reactivate your listing once the suspension period is over, subject to a review by Airbnb. Serious infractions could lead to permanent removal from Airbnb.
How to Get Paid on AirBnB
To receive payments on Airbnb, you need select your payout method in the Payments & Payouts section after you have created your AirBnB account. AirBnB payment methods depend on where your property is. AirBnB Payout methods include bank transfers or ACH, Wise, PayPal, Payoneer Prepaid Debit Cards, and Western Union.
The currency you’re paid in is based on the country and method you selected when you first added your payout method. The currency can be different from the local currency where your listing is based. You can’t change a payout method’s currency once you’ve added it, but you can set up a new payout method in a different currency at any time.
The money you earn will typically be sent to you 24 hours after your guest’s scheduled check-in time. The time it takes for the funds arrive in your account will depend on the payout method you’ve selected. When you host a longer stay (28 nights or more), Airbnb will generally send earnings in monthly installments, starting 24 hours after your guest arrives.
Never request or make a reservation payment outside of Airbnb. If someone asks for payment to be taken off of Airbnb ‘s secure, on-site system, report it to AirBnB.
How Much Does AirBnB Charge Hosts?
Most AirBnB Hosts pay a flat service fee of 3% of the booking subtotal. The subtotal is your nightly rate plus your cleaning fee and additional guest fee, if applicable, and it doesn’t include AirBnB fees and taxes. Guests typically pay a service fee of around 14% of the booking subtotal.
Find the Best Insurance for yourself
There are many things that can go wrong when hosting guests on your property. As such, make sure you have the best insurance that covers AirBnB hosts. Choose an insurance policy with plenty of liability coverage that’s available in your country. There are insurance companies that focus on Airbnb or similar business such as Proper Insurance and Safely Insurance in the US.
Set Up Automation
Running and maintaining an AirBnB business can be very demanding especially for newbies. You might want to set up automation that will help in setting prices (via smart pricing software such as Wheelhouse). Automation will also help in responding to guest messages 24/7. It will also help to schedule the cleaning service and other services such as spa.
How much Does it Cost to Start an AirBnB Business?
There are several creative ways to enter this business and your choice will determine your capital requirements. Some strategies do not need considerable funds to start while others have huge capital requirements. However, your costs should include insurance costs, furniture costs, utilities and subscription costs, replenishable goods (such as toilet paper) costs, business permit fees, etc.
AirBnB Host Requirements
If you want to be an AirBnB host, you must meet the following requirements:
- You must be 18 years old and above.
- You must be responsive. It is advisable to respond to inquiries and reservations within 24 hours of receiving them.
- Provide guests with essential amenities including toilet paper, soap, sheets, at least a towel, and a pillow per guest. It is optional to add something extra such as Air conditioning, dryer, indoor fireplace, iron, hangers, TV, laptop friendly workplace, and more.
- Have a clearly marked fire escape route on your property.
- Do not cancel. Travel plans depend on accommodations and cancelling causes inconveniences.
- Accept reservation request promptly. The earlier the better.
- Follow your local area’s laws regarding hosting.
What is an AirBnB Superhost?
An AirBnB Superhost is someone who goes above and beyond in their hosting duties. Superhosts have a badge on their listing and profile. They enjoy certain benefits such as prioritized tech support, a $100 yearly travel voucher, 20% higher host referral bonuses, increased income, and increased number of bookings. AirBnB Superhosts satisfy the following requirements in the past 12 months of hosting:
- Reply to guests’ inquiries and messages rapidly (within 24 hours) and maintain a response rate of 90% or higher.
- Complete at least 10 stays or at least three reservations with a minimum of 100 nights booked in the past 12 months.
- Achieve and maintain an overall rating of 4.8 stars or higher.
- Keep your cancellation rate at 1% or lower. This avoids hosts double-booking their property by listing it on other platforms besides AirBnB.
- 80% of your AirBnB reviews should be 5-stars reviews.
What is AirBnB Plus?
AirBnB Plus is a special collection of top properties in different destinations that have been verified in-person by a third-party inspector. To apply for the AirBnB Plus status, you must meet the following requirements:
- Your listing must be either an entire place or a private room with a private bathroom.
- You must have accepted 95% of booking requests over the past year.
- You must not have cancelled any reservations if you can avoid it.
- You must have maintained an average rating of at least 4.8 in the past year.
After meeting these requirements, a third-party inspector will visit your property for vetting in terms of style, hospitality, and design. If your home is accepted, you must agree not to list it on any other booking platform except AirBnB.
How to Make Money on AirBnB without Owning Property
With many people joining the vacation rental industry each year, not all are property owners. You can make money with AirBnB without owning property. The following are some of the ways you can make money through AirBnB without owning property:
- Choose the AirBnB rental arbitrage route. The AirBnB arbitrage is when you rent a property with the main purpose of subletting it on vacation rental sites. For this to work, the money you generate must be more than the rent you are paying.
- Join a vacation rental franchise. You can get a special license from an existing franchise owner to use their resources and offer services under their brand name at a fee.
- Become a short-term rental property manager. Your responsibilities will include confirming bookings, marketing, managing the needs of property owners, property inspections, communicating with guests, supervising the check-in process, and more.
- Become an AirBnB consultant. Help other entrepreneurs to grow by helping them to maximize their bookings and improve their ranking. You can also help hosts to buy and sell short-term rentals. To succeed as a AirBnB consultant, sharpen your marketing and advertising skills.
- Host an AirBnB Experience. You can choose to offer a guided tour within your locality, a hiking trip, a surfing lesson, cooking classes, art classes, and more. Online AirBnB Experiences allow you to offer services from anywhere.
- Offer AirBnB cleaning services. Cleaning services are crucial in the AirBnB space. This is typically the first task that hosts will outsource. Conduct your research to find out the industry’s cleaning standards and the cleaning costs.
- Become a professional AirBnB photographer. You can either choose to become a freelance marketplace listing photographer and get listed by AirBnB or advertise your services on other platforms such as Upwork or Fiverr. To make the most out of AirBnB photography, learn about interior photography.
Other websites or apps that can serve as real estate investment options similar to AirBnB include the following:
Is AirBnB Profitable?
Yes. According to research, hosts make $924 on average per month. However, how much you make depends on your location, how frequently you rent out, your marketing skills, the number of rooms or properties you rent out, the quality of your home, and the services you provide.
Final Thoughts on How to Make Money with AirBnB
There being many ways to make money with the AirBnB business, it is best to know the complexity of each strategy so you can make a well-informed choice. To remain successful, ensure that your listing description is always accurate to prevent getting bad reviews.