With more than 7 million listings in over 220 countries and regions, Airbnb has grown tremendously since its launch in 2008. More and more people are jumping on board and renting out a house on Airbnb thanks to the high-income potential. If you are looking for a way to make money in real estate, renting out an Airbnb investment property could be a good idea. But there are a few things you need to know first. We’ve put together this guide to help you learn the things you need to know before investing in Airbnb.
1. How renting out a house on Airbnb works
How does renting out a house on Airbnb work? Renting out a house on Airbnb begins with creating an account on Airbnb.com. Once you’ve signed up, you will be required to indicate what kind of space you are listing. You will see a wide range of options ranging from a boutique hotel to a house to an apartment or bed and breakfast. After selecting the space you are listing, you will then narrow it down to a more specific property type. For example, a house could be a townhouse, cabin, farm stay, hut, or lighthouse.
The next step is to indicate whether you will be renting out just a room or the entire place. You will also be required to indicate if you are listing on Airbnb as an individual or as part of a company.
Finally, you will be required to add more information about the Airbnb rental listing such as the number of bathrooms, the number of bedrooms, bed configurations, and how many guests are permitted.
Once you’ve entered all the basic details about your Airbnb investment property, add quality images to accompany your description. A listing with professional photos is more likely to attract guests than one that has poor images. Be sure to capture all the rooms and important features in the rental property. When taking the photos, make sure the space is clutter-free and well lit.
Pricing your Airbnb is the next step. You can search Airbnb to see how much properties similar to yours are charging or check out Airbnb comps on Mashvisor. Besides nearby Airbnb booking rates, you should also consider seasonality, immediacy, events and holidays, and day of the week when setting your price. You can raise or lower your prices based on the expected impact of these factors.
Besides having a listing on the website, you can promote your Airbnb listing on social media, vacation rental forums, tourism websites, or using flyers. Interested guests will make bookings on the Airbnb site.
2. How much Airbnb charges
How much does Airbnb charge? Airbnb has two different service fee structures for anyone renting out a house on Airbnb; a host-only fee and a shared host and guest fee. The host-only fee applies to hotels and other hospitality businesses. It ranges from 14% to 20%. The shared host and guest fee is what individual Airbnb hosts pay. The host service fee is usually 3%, and the guest service fee is about 14% of the booking subtotal. These fees could vary based on a wide range of booking factors.
3. How much you will earn
How much money can you make renting out a house on Airbnb? According to a recent report by Earnest, Airbnb hosts make an average of $924 per month. However, your Airbnb rental income can vary greatly depending on the location of your investment property, the services you offer, how often you rent out the space, and the quality of the short-term rental. Want to know exactly how much you’ll earn before buying an Airbnb for sale? Check out #4.
Related: How to Make Money from Renting Out a House on Airbnb
4. What tools to use for finding income properties and analyzing them
Mashvisor’s real estate heatmap will help you find the most lucrative locations for an Airbnb property. You can analyze neighborhoods using Airbnb data such as listing price, Airbnb cash on cash return, Airbnb rental income, and Airbnb occupancy rate data.
Once you’ve found a good location for renting out a house on Airbnb, you can then conduct an Airbnb investment analysis to find cash flow properties. Mashvisor’s Airbnb calculator will provide you with Airbnb analytics such as cost estimates, cash flow, Airbnb cash on cash return, and cap rate. This real estate investment software will also help you estimate Airbnb income. That way, you will know how much you stand to earn by renting out a certain house on Airbnb.
Mashvisor’s Airbnb Calculator
5. The local laws
Before renting out a house on Airbnb, it is very crucial to understand the laws in your state or city. In many places, you must register and get a license or permit before welcoming guests into your Airbnb rental property. In some cities, short-term rentals are not even allowed. Besides having a license, you might also be required to pay an occupancy tax every time you have Airbnb guests. Visit your local authority offices to find out what laws apply to your area.
Related: 10 Cities with Airbnb Legal Issues in 2020
6. How to communicate with Airbnb guests
Renting out a house on Airbnb will mean lots of communication with guests, whether via email or phone calls. A good host communicates with guests in a timely and polite manner. Be straightforward and transparent when communicating about check-in and check-out procedures, total costs, and expectations. In addition, you should be ready to respond promptly whenever your Airbnb guests have questions or complaints.
7. How to maintain a clean Airbnb rental property
Cleanliness is one of the things guests look for in an Airbnb rental property. Having a clean space will earn you good Airbnb reviews when guests are rating your listing’s hygiene. When renting out a house on Airbnb, handling the cleaning of the Airbnb rental yourself might be tricky, especially if you have another full-time job. This is why it would be advisable to hire a professional cleaning service to do the job while you focus on other important tasks related to being an Airbnb host. If you don’t have the time to manage the rental property yourself, consider hiring an Airbnb property management company.
8. What your ultimate goal is (to become a Superhost)
Superhosts are considered safe and trustworthy, as well as excellent in their customer service. They get priority placement on Airbnb, higher occupancy rates, and higher revenues. Check the criteria for obtaining a Superhost status and make it your aim to become one of the best Airbnb hosts.
Related: Renting Out a House on Airbnb? Here’s How to Be on Top
If you are thinking of renting out a house on Airbnb, whether you are renting out an entire condo or a single room, you need to handle the Airbnb investment with the seriousness it deserves. With the tips above, renting out a house on Airbnb can be a profitable long-term venture.
Ready to become an Airbnb host? Check out this guide.
