Thinking about turning your home or condo into an Airbnb? Whether you’re travelling for an extended period or looking to earn extra income, short-term rentals can be a profitable option. With Airbnb rivalling hotels as a top choice for travellers, it’s important to know what it takes to become a successful host. Before you list your property, here are the key questions and considerations every first-time Airbnb host should know.
What To Consider Before You Host an Airbnb
Goal vs. Expectation
What type of host do you want to be? Are you seeking occasional extra income, a reliable secondary income, or a replacement for your current income? Depending on your goals, the amount of capital, time, and risk involved in hosting an Airbnb will vary significantly.
Inviting Strangers into your Home
If the idea is spending your days or nights with strangers in your home, you’ll need to think long and hard about hosting on Airbnb. Your only Airbnb route is to find and acquire a dedicated rental unit. Will the rental be your primary residence or a secondary one? There is a great deal to consider.
Time Commitment
Listing and running a successful Airbnb listing can take MUCH more time and effort than you expect, especially in the beginning. From honing your procedures, handling bookings, and dealing with unexpected emergencies, these are just some of the duties of a host.
Standing Out from the Crowd
Why would a potential guest want to look at your listing and book with you rather than the growing list of other alternatives? You’ll need to consider what you have to offer that sets you apart from others. This can include everything from the photos, descriptions, and pricing of your unit. Constant adjustments are required, as well as staying current with the market. You’ll need to be willing to put in the time and energy to get your positioning right.
Customer and Neighbour Relations
An important aspect to consider is how you want to approach and communicate with your guests. Guests will email you to ask questions before booking, after booking, and during their stay. How easily can you answer questions? Being responsive is crucial to receiving positive reviews and delivering an excellent experience for your guests. Additionally, you may have to consider how your neighbours will react to a rental. This may depend on the type of home you live in, such as a condo, apartment, townhome, or detached building. This will vary significantly by city and neighbourhood. Ultimately, you’ll need to decide if the potential headaches from your neighbours are worth the effort to host on Airbnb.
Risk and Liability Associated With Hosting an Airbnb
You will be exposing yourself to various risks by hosting on Airbnb. You’re putting yourself and your property at risk of theft. You risk renting to a squatter. You’ll also risk potential liability if your guests get injured or if they damage other property or injure neighbours.
Optimal Pricing
Pricing is not just setting your weekday and weekend rates and then never revisiting them. Optimal pricing takes time to get right initially and to maintain as you continue to host on Airbnb. Are you up for the task of continually monitoring competitive rates and special events to ensure your pricing is optimized for maximum profits?
Keeping Up With News and the Market
To be successful in hosting on Airbnb, you’ll need to continually learn and adapt your listing to changing market conditions, guest preferences, and even local laws. You may have very different kinds of travellers during different seasons that require entirely different positioning.
Life Interruptions
With all these considerations, you can expect that hosting an Airbnb will interrupt your life in one way or another especially if you’re hosting just one unit and not hiring a third-party listing manager to handle hosting on your behalf. You’ll need to be ready to check guests in and out, perform all cleaning and restocking tasks, and respond to guest inquiries, lockouts, and neighbour complaints, among other responsibilities.
Identify Who Your Typical Guest Will Be
Is a tech worker coming to your city? A bunch of friends coming to do some sightseeing? Then you can center your ideal guest in every decision you make when designing and decorating your space. Most home insurance policies don’t cover damage or loss caused by renters staying in the home. They need to protect themselves and their belongings with their own renter’s or tenant’s insurance policy.
Research Local Laws Before Hosting an Airbnb
The importance of this cannot be underestimated! Cities and counties worldwide are working diligently to protect their long-term housing stock, as they should, by creating regulations, issuing permits to host, or collecting taxes.
Know your Budget Before You Host an Airbnb
It seems obvious, but many potential hosts don’t look beyond the initial set-up investment. How much can you afford to spend on setting up a space well for guests? From a great mattress to towels, decor, art, and amenities for guests, can you make your space beautiful without breaking the bank? Second, plan for upgrades that can make your rental unforgettable. Third, estimate what your ongoing costs will be:
- Toilet paper
- Coffee
- Cleaning supplies
- Heating
- Electrical
- Water
- Garbage, etc.
Make a list of your ongoing costs. Lastly, have a contingency for upkeep, maintenance, and repairs.
How Often Do You Want to Host Your Airbnb?
Do you want to block certain nights for your use, or host every night? Also, consider if you wish to host one-night stays, or whether that’s too much work for cleaning. Will you set a minimum number of nights? If so, what will that look like?
Nightly Rates
Pretend you’re a guest searching for a space of a similar size in your neighbourhood. What are the going rates for other rentals? Is there a high season and a low season?
Cleaning Fees
Will you hire a cleaning person or do the cleaning yourself? Will you hire a property manager to handle all cleaning management, guest communications, and bookings management? You will also need to consider the fee to include in the overall Airbnb rental price.
Be a Local Ambassador
The best hosts consider themselves guides to the local area. Good Airbnb hosts, or ‘Superhosts’, provide great restaurant recommendations, tips on activities, and give guests personalized tips. Does that scare you or excite you? Offer a few hand-picked favourites to help your guests have the best experience possible.
How to Go Above and Beyond as an Airbnb Host
How can you wow your guests? Consider tailoring your welcome to the reason for your guest’s visit. From special occasions to work commitments, knowing these details can help you tailor your approach for each guest. From a handwritten note, a bag of coffee, maps, and coupons to local businesses, think about what your guest will appreciate.
Before you rent out your personal property, it’s best to get a few home insurance quotes that provide an Airbnb endorsement. Hosting an Airbnb can make you a lot of money, so make sure it doesn’t cost you thousands with unnecessary risks. Are you interested in further understanding your insurance needs when hosting a short-term Airbnb rental? If so, contact one of our isure representatives to learn more!
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