Airbnb and other peer-to-peer rentals have great money-making potential. Some property owners have even turned away from leasing traditional rentals, in favor of a switch to the tourist market. Turning your house into a vacation rental may mean you can charge way more than you could a long-term tenant. Plus, you don’t have to worry about deadbeat renters! Turning a spare bedroom into a vacation rental isn't a particularly new idea, but sites like Airbnb have made finding and vetting short-term tenants much simpler. Think you'd like to steal some business from your local motel? Check out these important points first.
1. Laws, zoning, and restrictions. Just because you can list your home on Airbnb doesn’t mean you're complying with local laws. It's your responsibility to know the regulations and proceed accordingly. Notably, hosts in New York City and here in South Florida have been fined thousands of dollars for renting their apartments through peer-to-peer services. Familiarize yourself with codes and restrictions in your area, such as ordinances which prevent homeowners from offering short-stay accommodation. Restrictions may also apply to renters; subletting your place on Airbnb might get you evicted.
2. Start-up preparation and costs. There's a lot of work to do before listing your space. Create a binder with the house rules, local attractions, the Wi-Fi password, your contact number, and other pertinent information. Not all guests will be familiar with the area or country you live in, so it's important to include 9-1-1 and other emergency numbers. Buy extra sheets and towels. "It's a lot easier to do the cleaning if we have a few spare sets of linens there ready to go," says one contributor on Curbed.com. Remember that your ongoing budget will need to include more than the usual quantity of standard household goods like toilet paper, paper towels, trash bags and soap.
3. It’s real estate, after all. Manage your listing. Good reviews are crucial, but before you've hosted your first guest you need good pictures. "Airbnb sends out a professional photographer for free to take pictures of the rentals. Guests really have very little to go on except for the pictures and the reviews. We were able to get guests to book without having any reviews at first because our pictures looked great."
4. Set an appropriate price. Although you can name your price, the market sets some bounds. Check the local competition as well as nearby hotels and hostels to get a sense of the price range. A home that is close to a university or an airport may find renters easily but may not necessarily be able to demand more than the local market can bear. Conversely, if you're always at 100 percent occupancy, your price may be too low. You may be able to raise your price through added value with convenient add-ons. For example, if you're near a beach consider getting snorkel equipment, boogie boards, and a cooler that renters can use. It's a small upfront cost and the free extras lure guests; alternatively, you might find that guests are willing to pay a slight premium for the convenient extras.
5. They’re guests, not tenants. You're a host, not a landlord. Try to anticipate our guests' needs. What would you want and need to enjoy your stay if the roles were reversed? What parts of the house would you expect to be clean and spotless? Small touches like leaving a bottle of wine for your guests, a few extra clean towels, having coffee and tea available, and a 'cheat sheet' of things to do around your area can go a long way to impress your guests.
6. Screen guests. You should be sure who you're welcoming into your home. Most hosts abide by a general rule of only allowing guests who have garnered a few positive reviews, and some insist on speaking with the guest before approving the rental request. Although there have been several stories in the news about renters trashing apartments or the like, the majority of guests don't cause problems. If you're worried, SafelyStay offers guest verification services and additional insurance.
7. Get ready to be spotless. “Yes, guests will notice if your bathroom isn't spotless, if the sheets don't smell freshly laundered, or that you never really learned how to mop.” They will give you bad reviews and nip your dreams of Airbnb domination in the bud. A good vacation rental is a clean vacation rental, and that takes work.
8. What to do if things go bad. Make sure you thoroughly read the fine print on Airbnb's insurance policy. If there is a negative incident, damage, or theft Airbnb requires a police report to be filed to process the claim.
9. The tax man cometh. Depending how much you earn by renting out all or part of your home, you may receive a tax form from the marketplaces that list your property. Even if you don't receive any documents, it's your responsibility to report the earnings when filing your tax return. Take this into account when balancing your costs versus potential earnings.
10. When all else fails, call in reinforcements. If all this sounds like too much, turn to a property manager. In most cases you can be as involved or hands-off as you’d like with a quality property management company. Some may even guarantee homeowners an upfront rate for the season (most property managers take a cut of rental income but don't guarantee bookings) and arrange for all cleaning, utility payments, repairs, key exchanges, and resupplying the units. Another option is to hire a friend or relative to help manage the property.
Sources: LA.curbed.com; popsugar.com; learnairbnb.com; makeuseof.com
Photo credit: Freepik
