The question should be, why not? For millennials, Airbnb is the #1 choice for a vacation rental, and they are the generation that takes more business trips (keep this in mind for my training on how to make your listing suitable for business travel). In a study by Morgan Stanley, they found that 49% of all users prefer home-sharing services as an alternative to a traditional hotel. The main idea is to offer a home-sharing service for travelers to get cheaper accommodations on their destinations. This presents a great opportunity for homeowners (like you) to make money by sharing their spaces.
I like data, so it is important for me (and for you) to understand what drives this interest
on Airbnb rentals. Based on Morgan Stanley’s study, The No. 1 reason why respondents are using Airbnb relates to price, followed by location, authentic experience, and “easy to use site/app”. So it seems this “trend” is nothing but a rapidly growing marketplace, that you should take advantage of.
Let’s start with the basics… identifying a space to rent. Do you own a couch, a spare room, a basement, a beach house or a second house or apartment you are not using (and paying for!)? Then you’re off to a great start.
Now that you know the Airbnb community is in constant growth, and that you have identified a potential space to rent, you need to understand this is a commitment of your time, and possibly space – if you’re renting areas of your house. This also requires investment – there are several amenities that are essential for the Airbnb experience and for your guests’ comfort (tv, coffee maker, AC/heater, wifi, etc).
Before you invest and make any listing official, it is crucial that you verify for permits from landlords, homeowner’s association (HOA), etc. There might be statements in your contract that legally restrict the renting on a short-term basis. Avoid any fines by reading through your contract, asking the right people, and confirming you are good to go!
Once you are set, start researching the market in your area. Evaluate the conditions, offerings and prices of Airbnb listings in your neighborhood to set a nightly rate. You need to consider what are your economic goals, and estimate your maintenance costs. You are able to set the minimum number of nights people can stay at your place – which helps offset the cost of changeover, and decide whether charging for extra guests. You are able to set a cleaning fee – this is a one-time fee to cover the cost of cleaning. You can either charge it or include it into your nightly rate. When crunching your numbers, be aware that there is a hosts’ fee that ranges from 3-5%.
Let’s discuss some benefits and risks of hosting an Airbnb rental.
The main benefit is, of course, additional earnings – who doesn’t love that extra cash? It can help you pay down the mortgage, make that trip you’ve been wanting for a long time, or make some renos on your home.
If you have a vacant home, renting it out short-term can help avoid wearing down due to abandonment, as part of renting includes continuous maintenance and cleaning.
You get to meet people from all over! This is a great opportunity to learn, grow, share different experiences with people from every corner of the world (Airbnb is present in 191 countries, 65,000 cities).
You will be a mini-entrepreneur. Yes, you will gain experience on time management, pricing strategies (stay tuned for our tutorial on this), interior design, photography, and cleaning services! Isn’t that exciting? Don’t feel overwhelmed; we have the resources to make your life way easier.
You get to showcase your place to, ahem, 150 million users on Airbnb. Okay, they may all not be looking to stay at your place, but hey, even a 0.01% is a lot! To me that is so mind-blowing!
Your guests can make your neighbors angry! There have been many petitions to ban or restrict Airbnb, you’ll want to be careful of who you let into your house, and be clear about the House Rules.
It is a fact that you are exposing yourself and your property to risks by hosting an Airbnb. Your items can be damaged or stolen. You are at risk of liability if any of your guests result injured or injure a neighbor. Airbnb do provide insurance coverage for liability, but you should read carefully what’s included.
It will require time and effort, or money to pay for it. You will need furnishing, decorating, cleaning between reservations, and maintenance. Whether you will do it yourself or pay for it, don’t forget to include it in your calculations.
Lastly, you will be contacted, many times. You need to be aware that guests will contact you with questions, complains, and issues they might need solved. You will need to check guests in and out, clean, restock supply, buy supplies, respond to questions, review guests, etc… Or you can hire us, and we’ll do that for you, just sayin’!
As stated above, there are economical benefits of renting your space, but please take into consideration the time it will consume, and make your decision… do you think it’s worth it?
If you do, we’re here for you! Enjoy the resources shared on this blog for your benefit.