If you’re like me and always looking for ways to make extra money from home, you may have thought about becoming an Airbnb host.
I can see why. If you have an extra room, why not make money, right?
It’s a great idea, but before you open up your home or vacation home as an Airbnb, there are certain factors to consider. It can be a great source of passive income when done right.
So let’s dive into what you must know before hosting an Airbnb.
What is an Airbnb host?
An Airbnb host can own a vacation home who wants to make money on it while not living there. It can also be someone with extra room in their primary home who wants to make a little side cash.
To be an Airbnb host, you act like the staff you’d expect at a hotel. You provide accommodations for your renters and ensure that they have a nice stay.
You can use the Airbnb platform for the administrative side, but you do everything else — from taking reservations, answering questions about the property, and providing your guests with an amazing stay — so they leave great reviews.
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Who qualifies to be an Airbnb host?
The good news is you don’t need any special qualifications to be an Airbnb host. Once you host guests, Airbnb will ask them to rate the space and service you provided. The better the ratings you receive, the more chances you’ll have to make money on Airbnb.
While there aren’t specific guidelines you must meet, here’s what Airbnb hopes hosts offer.
Responsiveness
The more responsive you are, the more considerate travelers will consider you. Quickly answering questions about the property, rate, or accommodations in the area will help potential guests decide if they want to rent your property.
Airbnb asks that you respond to inquiries within 24 hours for the highest ratings.
No cancellations
Unless it’s completely outside your control, don’t cancel a confirmed booking. If you committed your property to a guest, you must keep up your end of the deal. If you don’t, you could face financial penalties and banned from listing your property on Airbnb.
A clean property
Guests expect a clean space when they arrive, just like they saw in your photos. Not only does the cleanliness of the property affect your current guests, but it affects your ratings too. It’s one of the factors guests grade you on after staying at your property, and this information is visible on your listing.
Amenities
It’s not a requirement, but it’s a nice touch to make sure your guests have everything they need and everything you put in the listing. Standard amenities include enough pillows and blankets for each person, a clean towel for each person, enough toilet paper and paper towels for their stay, and everyday toiletries. I’ve even been in a few Airbnbs that have a coffee and tea bar. It definitely elevated my stay!
Honest listing details
It’s tempting to beef up the amazingness of your property, but that will only backfire on you. Instead, be honest with your guests in the listing. Accurately state the number of bedrooms/bathrooms available, the privacy of the rooms, and the amenities you offer.
Make sure your photos accurately depict your property, and you have a clearly posted list of rules you put in place before a guest books with you. Nothing’s worse than feeling catfished by your vacation rental!
Support during their stay
Even if you don’t live in the property your guests are staying in, make yourself available for phone calls or texts. If your guests need something, be responsive. This will help your ratings.
Airbnb prefers that you set the stage for your guests’ arrival, especially if you won’t be present. You should also set up someone else for them to contact if you won’t be available.
How much money can you make as an Airbnb host?
How much you make as an Airbnb host varies based on the type of property and location. For example, if you’re renting out a room in the home where you live, you’ll make less than if you rented out a house on the beach for exclusive use.
On average, Airbnb hosts make $924 a month, but it varies based on what you offer. Will you make a full-time gig doing it? Only if you buy properties exclusively to rent out to guests. But you can make a nice side gig income to supplement your primary job.
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The benefits of being an Airbnb host
Like any side gig, there are definitely benefits to becoming an Airbnb host. Here’s what I love the most about it.
You can make extra money
This is obviously the point of being an Airbnb host. How much you make depends on many factors, but any side income can be helpful. While it’s not passive income since you have to do work to list the property, choose guests, and get the property ready, it can be an easy gig if you’re prepared.
You control when you rent the property out
You set the availability dates, making the property available when you want and unavailable when you don’t. Of course, if you’ll be out of town or away from the area, it’s always a good idea to have someone step in to take over in your place should your guests need anything, so keep that in mind when creating your schedule.
Diversifies your income
Relying on one income source isn’t a good idea. 2020 showed millions of people that life could happen in the blink of an eye. Renting out your property gives you another source of income that can supplement your regular 9 to 5 salary and even help during tough times.
Tax Deductions
Since renting out your home is a business, you can write off any costs you incur to run it. This may include mortgage interest, taxes, insurance premiums, utility costs, maintenance costs, and expenses to keep the home accessible for your guests. Always talk to your tax advisor before taking tax deductions for an Airbnb to make sure it applies to you.
Meet new people
It’s always fun to meet new people, especially people from all over the world. In addition, you may get to learn about other areas you want to visit or make new friends getting to know your guests if you live in the area.
Top tips to consider before becoming an Airbnb host
If being an Airbnb host sounds like something you’d enjoy, check out these top tips I recommend to ensure your gig is successful.
Space out bookings to have enough time to clean in between guests
One of the top rules for any Airbnb host is to offer a clean property. Don’t book your guests so close together that you don’t have time to clean all the rooms, including the toilets, sinks, and kitchen appliances.
You should also have time to bring in fresh towels, change the bedding, and refresh the property, so it looks like no one was even there.
Hire a cleaning service if you don’t have time to clean the property
If you know you don’t have time to clean the property in between guests properly, charge your guests a cleaning fee and hire professionals. A good cleaning service can usually clean a property well within two to three hours. This ensures you give your next guests the level of cleanliness they expect, and you get good reviews.
Accept reservations if your calendar says the property is free
Don’t make it a habit to change your mind about your property’s availability and not update your calendar. If your calendar says the property is free, try to accept reservation requests you receive.
Provide as many details as possible in the listing
Make your listing accurate and descriptive. Make your potential guests feel like they’re on the property when reading your listing. The more the property looks like what you described, the better the reviews you’ll receive.
Take high-quality photos
Avoid using a smartphone to take your property pictures. If you don’t own a decent camera or don’t like taking pictures, ask a friend or relative to help or hire a professional. In this case, a picture is worth 1,000 words — the better the pictures, the higher your chances of renting out the property.
Act like a concierge
If you’re looking for value-added services to provide your guests, play the role of the concierge. If they’ve never been to the area, they may have a lot of questions. Offer advice about places to visit, restaurants to try, and amenities to enjoy. You can even create a listing of all the local hot spots and have it handy for your guests inside the property. It adds a “special touch” that may get you even better reviews.
Understand the time commitment
Remember that renting out your home on Airbnb takes more than accepting a reservation and collecting money. You’ll spend time communicating with potential guests, answering questions, and setting up your availability.
You’ll also spend time preparing the property, listing it, and cleaning it before and after guests. Even once you’re established, you’ll still commit several hours of your week to caring for the property and your guests to ensure a great experience.
Know the laws and regulations in your area
Before you rent out your property, check your city and county guidelines. Some areas have stricter short-term rental laws than others. Know if you must register your business before renting your property out, what type of insurance you must carry, and whether it’s legal to offer short-term rentals in your area.
Give your home special features
Guests are likely renting your property for some time away from home. In their travels, they’re likely looking for something more charming, exciting, and relaxing than they could get at home. Think about what you could do to your property to give it that “special touch” even if it’s extra fluffy blankets in a winter cabin or sandcastle buckets in your beach house tucked away by itself.
Don’t go overboard
As much as you want to go above and beyond for every guest, don’t trip over yourself trying to do it. Sometimes less is more, even with a vacation rental. Give your guests a cozy and clean place to relax and enjoy while away from home. Sometimes if you try too hard, you’ll clutter up the property and turn guests off.
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The bottom line
Playing Airbnb host is a great source of passive income when you do it right. While it’s not 100% passive since you have to do some work, as you get established, you may be able to afford to pay services to do the work for you.
In the meantime, enjoy the extra income and the job of making people happy. If giving guests a place to enjoy their vacation is a “job,” it’s still one you can enjoy if you relax, pay attention to detail, and let your guests guide you to providing the ultimate experience that gets you the best reviews.
About Millennial Money Man
Bobby Hoyt is a former band director who paid off $40,000 of student loan debt in 18 months on his teaching salary and then left his job to run Millennial Money Man full-time. He helps other Millennials earn more through side hustles, save more through budgeting tools and apps, and pay off debt. He is a personal finance expert who has been seen on Forbes, Reuters, MarketWatch, CNBC, International Business Times, Business Insider, US News, Yahoo Finance, and many other personal finance and entrepreneurship media outlets.
