If you’ve ever thought about making a passive stream of income using the resources you already have, you might have considered using Airbnb. It’s been around for almost a decade now, and has built a solid reputation as a way for homeowners (and sometimes renters) to make some extra cash on the side.
But if you aren’t familiar with the system or how to best use it to your advantage, you might end up spending more money than you make—or worse, you could end up with a problematic guest who turns your money-making venture into a horror story.
How Airbnb Works
The basics of Airbnb are easy to understand, and the app walks you through everything from the beginning. The most common way to use the platform is to become a host, renting out some or all of your home space for a set fee and/or a set period of time. Under this arrangement, potential travelers will be able to see your listing, schedule a time to stay, and then pay you through the platform when they use your space.
Sounds simple, right?
How to Prepare
Unfortunately, it’s not a good idea to list your property without doing some prep work. Not only will you want to make your property as attractive as possible to prospective tenants, you’ll also need to set yourself up to be as profitable as possible with the following steps:
- Secure your landlord’s permission (if applicable). If you own the property yourself, there should be no issue with renting your property to someone else. However, according to Green Residential, you’ll need explicit permission from your landlord if you want to sublet your apartment to an Airbnb guest.
- Buy new linens and clean. Your property should look and feel nice to your guests. Purchase new linens, clean the room thoroughly, and consider repainting and adding other small touches to make your place more attractive. This can demand an intensive effort, but you’ll need it to be competitive and earn good ratings.
- Take quality pictures. According to Guesty, the most popular Airbnb rentals tend to be the ones with the most professional-looking photos. If you have a good camera and know how to take decent photographs, you can try your own hand to make your property look as comfortable and inviting as possible; otherwise, consider paying a professional.
- Understand the legalities. Though some of Airbnb’s rules are straightforward, others are a little fuzzier—such as your ability to rent part of a yacht as a property, or how you’re obligated to pay taxes. Make sure to review the renting requirements in your state and city before proceeding, as well as Airbnb’s insurance policy, which does protect you from guest damage and/or neglect.
- Understand the risks. As the San Diego Reader points out, it is possible (and legal) that your Airbnb tenant refuses to leave the property once they’ve stayed there for longer than 30 days. At that point, they have the same rights as a month-to-month tenant, and could drag you into a long legal battle. These incidents are far more the exception than they are the rule, but it’s worth knowing the risks before you dive head-first into your firs
- Set a fair price. You’ll set your own price for the property, but this is trickier than it seems. If you set a price that’s too low, you won’t make any money, but if you set your price too high, nobody will want to rent from you. You can research prices on the Airbnb app itself, or research rent prices in your area, as Landlordology suggests, to figure out the ideal rate to charge your new guests. The size of your property and quality should also be significant factors in your calculations.
- Establish house rules. You’ll also want to establish some house rules for your guests to follow, but don’t be too restrictive here. The goal isn’t to control your guest’s behavior; instead, it’s to protect your property. For example, you might restrict smoking to an area at least 20 feet from your property, or prohibit the use of certain items indoors. Take a look at other listings to get a sense for what to include here.
Once you accommodate your first guest through the platform, everything will seem easier and less stressful. Like any undertaking, the more practice you have, the more efficient you’ll become. After a couple of successful guests, your main priorities should shift to attracting the best reviews possible; only with good reviews will you continue to attract high-quality guests. Of course, if at any point you decide that it’s too much work or too much stress, you can remove your listing without issue, but hopefully, Airbnb will become a profitable endeavor for you and your property.