Airbnb grew from an out-there idea to a $30 billion company in just over ten years. For some Airbnb hosts, short-term property rental brings in a modest amount of cash. For others, Airbnb operates as the head company for a full-blown lucrative business.
If you’re wondering how to start an Airbnb of your own, you’ve come to the right place. We’ve looked at different Airbnb models, from the smallest side hustle to the most luxurious property, to put together this comprehensive Airbnb guide.
Are you ready to get started putting together the perfect Airbnb for your lifestyle and financial goals?
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Picking the Right Property for Your Airbnb
Once you’ve got Airbnb rentals on the brain, it’s time to start thinking: where will your Airbnb property be?
When Airbnb started, the idea was that property owners could rent out their extra space to vacation-goers. That could be a guesthouse, an apartment, or even a guestroom in your primary residence.
Now, we’re seeing an influx in property purchases made specifically to start an Airbnb. Is that the right move for you? Is it a feasible option?
Let’s take a closer look.
Research the Market
First, let’s talk about the market. When it comes to starting an Airbnb, that does refer to the real estate market but it also refers to the tourism market.
Is your current property located in a desirable area for travelers? Is it close to popular attractions or convention centers?
An Airbnb that is located in a destination area is going to be the easiest to rent out. Alternatively, opening an Airbnb in a smaller town with limited accommodations for visitors can also become a lucrative project.
Understand the Ethics, Laws, and Regulations
The reality is that housing is becoming more expensive across the entire nation. It’s important that you think about the ethics of where you’re starting an Airbnb, especially if it isn’t your own primary residence. What you want to avoid is driving up the cost of housing in a low-income community.
In fact, some cities are establishing new laws and regulations specifically addressing this issue. Depending on where you live, it may not be an option to purchase a property solely for the sake of starting an Airbnb. For example, San Francisco residents must live in their Airbnb property and can only rent it out 90 days out of the year or when they’re at home.
Do You Need to Buy a Property to Start an Airbnb?
Believe it or not, you may not need to buy a property to turn it into an Airbnb. Some apartment and condo complexes will allow you to sublet an apartment that is leased in your name and that includes subletting to short-term visitors.
However, you need to check with your landlord or leasing agency, first. They may require that you get an LLC or additional insurance for your Airbnb property. Some landlords and leasing agencies will not allow this arrangement at all.
Calculating Your Return on Investment
How much money can you make with your Airbnb? Most of this will come down to the amount of time you’re willing and able to rent out your space. However, there are some concrete figures to consider when calculating your return on investment.
Setting Rental Prices
How much can you charge guests to rent out your Airbnb? This depends on your local market (how much would it cost to book another room in the same area?) and the amenities you can provide. For example, having full access to an entire house warrants a higher rental price than having partial access to certain rooms.
Setting Cleaning Fees
Cleaning fees refer to the amount that you charge guests to keep the Airbnb clean. Many Airbnb hosts hire professional cleaning companies to come in after each guest leaves. You may want to factor part of these costs into the rental price, as an exorbitant cleaning fee will lead people to look elsewhere for accommodations.
Airbnb Hosting Fees
Don’t forget: Airbnb does charge a hosting fee in order to access their platform and take advantage of their marketing tools! How can you calculate the hosting fee? Add up the rental price, cleaning fees, and any additional fees that you charge your guess and multiply it by 0.3.
The Cost of Maintenance
The Airbnb fee isn’t the only thing that will cut into your profit. You should always expect maintenance fees, including costly emergency maintenance fees. It’s your job to ensure that your Airbnb is safe, up-to-date, furnished, and clean.
Furnishing Your Airbnb
If you love to decorate, this is the fun part! Your Airbnb needs furnishings and, ideally, some great decorations, too.
One of the big reasons that travelers love Airbnbs is that they offer up a more unique experience than traditional hotels. Use this Airbnb design course to learn more about the best way to furnish and decorate your Airbnb.
What Goes in a Luxury Airbnb?
What if you want to take your Airbnb to the next level? Designing a luxury Airbnb takes some extra work, consideration, and, of course, investment. Luxury Airbnbs often include:
- A home gym
- A luxury bathroom equipped with a jacuzzi tub
- State of the art kitchen equipment
- High-speed internet and a high definition television
- Daily cleaning services
- Central heat and air
If you want to provide a next-level guest experience (and charge luxury prices), you’ll want to ensure that all of these amenities are available.
Get Started on Your Own Airbnb
Are you ready to start an Airbnb of your own? Whether you want to boost your income just a bit or start a full-time Airbnb business, this guide will help you get started.
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