Maximize the Potential of Airbnb
Maybe you’re just starting. Maybe you’re ramping up an existing business. Either way, here are 6 tips from real estate experts to get started hosting some of Airbnb’s 500 million guest arrivals.
1. Research the Market
Before even signing up for an Airbnb account, go to the site to see what’s available in your own city. This will give you an idea of what to offer so you stand out. If you’re looking to buy in a different area, Eman Hamed at Mashvisor recommends using Airbnb’s Trends Report.
“Mid-western cities in the US housing market are seeing some of the strongest growth. For example, bookings have increased by 256% in Indianapolis, IN and 254% in Columbus, OH,” she says. Also, “vacation rental properties in Miami and Orlando, FL have some of the highest return on investment in the country. Another Airbnb real estate investing trend is the increasing popularity of small towns that offer ample nature lodging in close proximity to popular national parks, such as Whitefish, MT.”
2. Be a Good Host
Once you’re logged in, take the time to read through Airbnb’s on-site information. There are very strict host standards in place, as GuestReady’s Global Operations Manager Shannon Hyde explained to Realtor.com.
Although Airbnb provides the platform, you’re responsible for being a good host. This means you must be responsive, accept reservation requests, avoid cancellations, and provide basic essentials, like toilet paper, soap, towels, linens, and pillows.
How would you feel if you booked a hotel and showed up to find none of these items were available?
Keeping your rating up helps you become a superhost. According to Airbnb, Superhosts have a response rate of at least 90%, have hosted at least 10 trips, do not cancel, and have at least 80% five-star ratings.
3. Understand the Law
Many cities have strict regulations on homeowners renting to short-term guests. And if you’re a renter, subletting laws will apply for both your city and landlord. Attorney Stephen Fishman offers this advice.
“Verify the following information:
How many days a year homeowners are allowed to rent to short-term guests?
How many consecutive days homeowners can rent to short-term guests?”
Once somebody overstays, they are officially tenants, which makes you a landlord. Eviction proceedings at that point can take months or even years. And this is assuming you don’t accidentally commit a crime in the process.
4. Keep Your Eye on the Prize
The idea of strangers living in your home may scare you, but Carol Oshana, principal attorney for Chicago Landlord Attorneys has advice to relieve the stress.
“A patient temperament is to your advantage. Your tenants are paying your mortgage for you, in theory,” Oshana said, “so that after 30 years, you can either cash out and use that money for a CD or whatever, or you can just take the rent and live off that.”
Remember that Airbnb is a way for you to earn extra income. Treat your guests like customers and run your Airbnb like a real business. Not every scenario is a nightmare scenario. You just need to proactively prepare yourself like any other situation in life. And if you really don’t want people in your home, buy a second property to use as an Airbnb rental.
5. Presentation Is Everything
Make your home presentable before renting it out. Even if you’re in a prime vacation spot where everyone wants to be, you’re eventually going to get a reputation as the low-end place. What do you think of when you hear Motel 6 versus Sheriden?
Morris Armstrong of Armstrong Financial Strategies sees people slacking in even the best markets.
"If you are looking for income and profit from a rental, then you have to step up your game," he says, adding "I have a client with a dated cottage that in Cape Cod. They refuse to update it with central air conditioning or a more modern look to the kitchen. In the past, they could count on it being rented out most of the summer season. Now, they are lucky if it is rented out two weeks."
6. Offer the Best Price in Town
Undercutting the competition with the lowest possible price is the easiest way to get noticed in any marketplace. If everyone else is charging $100/night and you can offer $80, do it. Of course it’s hard to take these types of cuts when you’re stuck with a mortgage, but did you know you can get an Airbnb loan just based on your dashboard income?
LIke Amazon and eBay, Airbnb is a marketplace that tracks verifiable income. This means you can essentially turn your Airbnb account into its own sustainable business. If you have already built a decent side gig, this is a great way to pull equity out of it and gain liquidity to get over a financial hurdle.
Airbnb is now available in over 100,000 cities across nearly 200 countries around the world. An average of 2 million people are staying in an Airbnb every night. It’s expanding to destination experiences and other tourist industry accommodations. The fact is Airbnb is a powerful marketplace that’s not going anywhere. If you’re not already involved in it, you’re leaving money on the table. Contact us for help getting on board now, before it’s too late.