Things To Know Before Becoming an Airbnb Host Archives - Turno

Things to Know Before Becoming an Airbnb Host

The Turno Team — Mon, 11 Jul 2022 19:32:11 +0000

1. Identify Your Market

Figuring out who you are going to market to will help you establish a solid foundation for your short-term rental business.

“Decide whether you can commit to the financial work of owning an Airbnb. Hopefully, you can, because this potential is present with any investment property. However, be sure to do your homework in advance to understand the rental patterns of the market you are considering.”

– Futurestay

To identify your market, you will need to consider your clientele’s age range and income. This will help you identify to whom you would like to promote your listings.

Location plays a big role in determining your target market. For example, if your property is near the beach, you’ll likely attract those wanting a sunny, ocean-side getaway. If you rent out an apartment in the city, your target market may focus on business travelers.

2. Know Your Regulations and Legalities

Become familiar with your local laws and regulations about short-term rentals. In many U.S. cities, it is required that you are registered or have a permit to list your property as an Airbnb. Other regulations vary by location.

Additionally, hosts can often become liable for any injuries sustained on their property. Because of this, securing insurance coverage is recommended.

3. Budget Up-Front Costs

“Just as new homeowners quickly discover that the grass isn’t always greener after they finish tallying up the costs from their home inspection, those just entering the short-term rental business often realize that they did not account for every expense they needed to when they ran their initial budgets. Have you made a plan for cleaning costs? Utility bills?”

– Futurestay

Up-front costs, including rent, utilities, Wi-Fi, and internet, may add up to $1,500 to $3,000 or more per month, depending on the location of your property. You’ll also have to keep in mind the costs of hiring professional cleaners, fixing repairs, and keeping the properties stocked with guest comforts.

Take the time to consider all potential costs — up-front, recurring, and future — for your Airbnb business to determine whether the investment will be worthwhile.

How Much Does It Cost to Start an Airbnb?

The average cost of starting an Airbnb business is around $18,000. Up-front costs for an Airbnb include:

Down payment and security deposit
Monthly rent or mortgage payment
Insurance
Furniture
Utilities
WIFI and internet
Replenishable goods like cooking oil and spices
Soft goods like kitchenware
Services like Netflix or Hulu

Depending on the size of your Airbnb, your costs may change. 1-bedroom Airbnb rentals tend to have the lowest start-up costs. Additionally, most of your up-front costs will come from setting up your place. This includes home decor and basic supplies such as kitchenware and appliances.

Futurestay also points out that, “beyond the costs of day-to-day operations, you’ll need to consider what happens if you encounter a dry spell. Let’s assume nobody rents your property for a short time. Can you afford to cover the costs of the home without a steady income flow?”

4. Increase Your Level of Involvement

Your success as an Airbnb host is determined by your customer reviews and ratings. Being involved in your guests’ experience in a positive way will help you rack up those 5-star reviews.

The key is to not be so involved that you are impeding your guests’ stay. Be available for emergencies, questions, and check-in and check-out if needed. If your guests’ have any questions about the property or house rules, like whether or not they need to wash the linens before leaving, it is best to respond in a timely manner.

As a host, you are not expected to initiate contact to check up on guests repeatedly throughout their stay. You just have to be available if anything comes up.

5. Have Routine Cleaning and Maintenance

Hiring a professional cleaner to consistently keep your property clean and tidy will help ensure that your Airbnb business investment pays off.

Maintaining your properties also lets your guests know that you care about their experience. This can lead them to book with you again in the future or recommend you to a friend or family member.

6. Make Your Listing Stand Out

A sure way of getting more guests is to make your Airbnb listing stand out. Use professional images, and make sure your property is clean and clutter-free. Additionally, include an accurate and up-to-date description of your rental, mentioning all amenities, the location, and other unique qualities of the property that will draw people in.

Lastly, create a powerful host profile, as this is the first impression prospective guests will have of you. Upload a professional and friendly-looking profile image so clients have an idea of who they are communicating with and renting from.

Set Yourself Up for Airbnb Hosting Success

Owning a short-term rental property can be a great source of income, but it also requires some specific considerations before you commit.

When starting your Airbnb business, it is important to have most of the logistics figured out. Then, you can look for and finance your dream property.

The post Things to Know Before Becoming an Airbnb Host appeared first on Turno.

Is Running an Airbnb Profitable?

The Turno Team — Mon, 11 Jul 2022 19:06:37 +0000

Is Renting on Airbnb Still Profitable for Hosts Today?

Becoming an Airbnb host is most definitely profitable given the industry growth rate.

A 2021 study estimated that there are over 2.58 million rental properties in the United States that are seasonally occupied. With that, 600,000 Americans use online platforms, such as Airbnb, to rent out their homes, condos, apartments, and/or rooms to short-term guests.

A second study by Grand View Research roughly calculated that the global vacation rental market size was valued at $74.64 billion in 2021. Between 2022 and 2030, it is expected to expand at a compound annual growth rate (CAGR) of 5.3%.

How Much Can You Make as a Host?

As a host, you have every possibility to become financially successful. According to Futurestay, a leading vacation rental optimization platform, “profits for ‘rentalpreneurs’ listing their properties on Airbnb can range from supplemental numbers, like an extra $10,000 a year, to ‘quit your day job’ numbers, like the $300,000 this investor made.”

Airbnb hosts Amon and Christina are able to make $7,000 to $10,000 per month running their short-term rental. They recommend creating a business plan, taking professional photos, and hiring a professional cleaner.

They also provide the following advice: “Understand what you want to accomplish with your Airbnb business from a business perspective. How much money you want to make, how much you want to charge, and who your target audience is should be in your business plan.”

That said, gaining financial freedom through passive income will depend on how much forethought you put into your business plan. Your earnings also depend on your Airbnb property itself, the location, and its pricing. These three factors affect whether or not you achieve a high occupancy rate.

How Airbnb Hosting Works

Becoming a host on Airbnb is a great way to achieve passive income while being able to manage your own personal life and finances. Airbnb hosts have to go through a four-step process before they can actually start listing their properties.

The sign-up process includes:

Inputting your personal and property information
Uploading photos and a description of your property
Establishing your booking settings and pricing
Publishing your property for listings

Once certified as a legal homeowner, Airbnb requires a minimum of 30 days of availability during a twelve-month period per listing.

Hosts are expected to provide guests with essentials like soap, towels, toiletries, and linens. It is a host’s job to be responsive and helpful to guests who are requesting to book with them. This includes responding promptly and answering any questions the guest may have.

Additionally, it’s a good idea for Airbnb hosts to be able to manage their time. Through various software tools, hosts can automate their listings, payments, guest communication, and more. Hosts who do not automate these simple tasks often find themselves overworked and underbooked.

The First Step of Airbnb Hosting: Find Your Why

There are several reasons one might want to start an Airbnb business. No one reason is right or wrong, but identifying your “why” will help you make the right business decisions down the road.

The following will help identify some of the top reasons why current successful Airbnb hosts took the leap and started listing their properties.

Financial Freedom

If you’re working multiple jobs to pay rent or buy groceries — or saving for that dream vacation — hosting gives you the opportunity to achieve financial freedom.

Melissa Naman, owner and Superhost of Beach Life Bliss, states:

“One of my many top reasons for starting an Airbnb is to strive toward financial freedom. My goal is to create monthly semi-passive Airbnb income and long-term wealth. Short-term rentals can generate way more cash flow than yearly rentals and get you to your goals faster.

Another big reason for me personally is to share the town that I live in with others. Lake Worth Beach is a small eclectic beach town that brings Key West vibes to everyone that visits. I have had several people come to stay at my Airbnb and wind up buying a house of their own down the street. This warms my heart and makes all of the hard work worth it.”

More Free Time and Flexibility

As a vacation rental host, your work hours are determined by you, for you. You can put in as many or as few hours as you’d like, depending on your goals and preferences.

If you’re ready to ditch the full-time, 9-to-5 lifestyle to spend more time with your kids, travel, pursue a new hobby, or something else, securing an Airbnb investment may be for you.

Entrepreneurial Undertaking

Many Airbnb hosts have a true entrepreneurial spirit and view running an Airbnb as another venture to put under their belt. In these cases, hosts may rely on property management companies and automation software to assist with day-to-day operations.

Build a Lucrative Vacation Rental Business

The process of owning an Airbnb rental can be lucrative and worthwhile. However, according to the team at Futurestay, “it’s incredibly important to go into a decision such as this with your eyes wide open.”

Ready to take your short-term rental dream from side hustle to success? Visit our other blogs to get tips about everything from financing your investment property to optimizing your listing to growing your empire.

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