How to Start an Airbnb and Turn Extra Space Into Steady Income
If you have an apartment or house that you'd like to rent out for extra cash, you may want to look into how to start an Airbnb business.
With summer right around the corner, you’re probably thinking about vacation. And since the vacation rental industry is booming, you may want to skip traditional hotels and look into Airbnb.
As you scroll through the unique homes and beachy condos on the short-term homestay platform, you have an idea. Maybe you should become an Airbnb host to bring in extra income. Wouldn’t it be great if you could rent out your home when it isn't in use and make money too?
Here’s how to start an Airbnb.
There are six steps to starting an Airbnb.
There are six steps involved in starting your own Airbnb. While starting an Airbnb is a little less hectic than starting a retail boutique, it still takes time, patience, effort, and some financial investments to get going.
1. Take stock of the market
Search on Airbnb's website to find apartments or homes like yours. See what they charge based on the length of stay, amenities, and what they offer.
Also take note of your location and the type of people who may want to book a space in your area. Are they in town for business or a vacation? Is there an attraction or historic site nearby?
Find out if you’re allowed to list your place (yes, you can rent out your home if you have a mortgage) because you may need permission from your landlord, co-op board, or HOA.
2. Figure out your earning potential.
Conduct market research to estimate your earning potential and think about expenses and pricing. To do this you’ll need to:
- List your expenses: To find out what you may be able to make, you need to consider costs such as decor, toiletries, linen, cleaning services, maintenance, your mortgage, and repairs.
- Use smart pricing: Use the Smart Pricing tool to automatically change your nightly prices based on demand. It takes over 70 factors into account and allows you to set a minimum nightly rate.
- Set your price: Find out what other renters are charging, and adjust pricing based on demand for special events and seasons. Remember Airbnb charges a 3 percent fee of the booking subtotal and guests pay a service fee and anything else you tack on.
3. Build a team because you won't be able to do it alone.
At first you may want to handle the entire Airbnb venture on your own, but if you’re busy, you may need to hire people like cleaning staff, a handyman, property manager, and co-hosts to give you a hand.
You can also automate some of the experiences with scheduled messages, quick replies, instant book and explore calendar and booking settings.
4. Create an experience.
Now that you’ve got the location secured, it’s time to create the experience. First, you need to decide what types of guests you’d like to attract and how to make your space stand out.
Try to pick a theme — boho chic, beachside, city living, or family friendly — and buy items to reflect the theme. And also add in some unique touches and mementos that reflect things you’ll only find in your area.
5. Advertise your space
A location is only worth it if people know about it and creating your listing is just the first step. To list your space, make sure you’ve got lots of great photos and an awesome writeup and title — don’t underestimate the power of SEO rankings. If you aren't a writer or photographer, hire a professional!
Once your listing is active, review the listing often and consider guest feedback.
6. Rely on Airbnb for help.
Airbnb offers 24/7 support so whether you have questions about insurance, ground rules for guests, identity verification, insurance options, cancellations, or you’d just like to meet other hosts, the website has you covered.
Is it profitable to run an Airbnb?
You may be wondering how much Airbnb owners make. On average, hosts in the U.S. make more than $9,000 per year, but it depends on factors like how many places each host rents out, how much they charge, and how often they rent it out.
For most people, this is passive income and not a full-time job. They consider it extra pocket change more than anything else. However, the more time and effort you put into your space to stand out will pay off in reviews, ratings, and additional renters.
Don’t forget that Airbnb takes a percentage of your earnings. So, what percent does Airbnb take? Since Airbnb charges a substantial amount of money to the guests who use their booking platform, the majority of hosts pay a flat rate of 3 percent of the booking total, while guests pay 14 percent of the booking subtotal.