A successful real estate rental business is largely determined by the set of tools that an entrepreneur uses. These include platforms that host properties for rent, and among them, we want to draw your attention to the Airbnb service.
Airbnb is a website through which you can rent accommodation from individuals around the world. There are offers for every taste, from free rooms to mobile homes and even castles. Although, we note that flats or small houses are still in great demand.
Airbnb is popular among renters. By choosing a condo instead of a hotel room, they can save a lot even on short-term rentals, especially if they are travelling in a large group. In addition, a well-furnished flat creates a feeling of home comfort and looks better than an impersonal hotel room.
In this article, we break down what Airbnb is all about and share tips for renting out your property.
Who can run Airbnb business
Airbnb operates in over 181 countries around the world. The platform can be a great assistant for entrepreneurs who are looking for ways to simplify the management of objects for rent. If you are used to planning, you are responsible and want to receive passive income, then this platform will come in handy for you.
Short-term rentals on Airbnb are also suitable for those who are open to communication with strangers and are ready to put up with their peculiarities.
Advantages and disadvantages of doing business on Airbnb
First, we highlight the convenience of the service among advantages of Airbnb. This software is user-friendly: it is responsible for automating bookings and partially communicating with tenants, making payments, and providing support. The property owner can seek advice from the platform’s experts, apply for an AirCover, and use Airbnb’s promotional tools. The site has helpful articles in the Help Center section on how to use the platform and run a real estate rental business.
Airbnb also lets you rate both the landlord and the tenants. The host rates guests on cleanliness, courtesy, and communication. The other popular platform Booking.com does not have this feature.
The Airbnb usage fee, which is paid by the entrepreneur, is quite low at only 3% of the final rental price. The price includes the rate per night. The service fee, cleaning fee, and extra person fee are covered by the guests. Price details with all fees are shown on the booking details page.
Among the shortcomings, we note that Airbnb cannot guarantee the safety of your property. Unfortunately, this is an uncontrollable human factor. You can provide for a damage deposit, which will be removed from the tenant’s card after the check-out, but compensation is not always able to compensate for moral damage.
Another key point: the money is credited to the owner’s card only a day after the tenants have settled. Thus, if you do not indicate in the rental conditions that the advance payment is non-refundable, the risk of tenant refusal and, as a result, cancellation of the reservation with further loss of money increases.
How to start your own business on Airbnb
We have identified several points that you will encounter at the start of work.
Airbnb host requirements
Airbnb’s Community Guidelines are pretty specific for clients. Property owners are advised to be responsive, host as many guests as possible, and refuse accommodation as little as possible, as this can affect the rating of the property that needs to be monitored. In addition, you, as the owner, will have to pay a fine to Airbnb for cancelling a booking.
Legislative side of the issue
We suggest you to check local laws. It is not uncommon for local laws to restrict or prohibit the rental business from operating in certain regions. Also, pay attention to taxes that you will have to pay in addition to those provided for by the rules of the Airbnb platform. Take them into account when forming the final price of housing and calculating profitability.
What can help you run your business on Airbnb
You can entrust business management to a specialized company. It takes responsibility for organizational processes that relate to the preparation of real estate for delivery, communication with tenants, solving problems, such as minor repairs. If you decide to apply for services to a specialized company, it is important to include in it all the details and potential difficulties that may arise in the process of property management at the stage of drafting the contract. We also note that a large amount will have to be paid for the services of the company.
If you have enough time, are ready to run the business on your own, or you have your own team, then we recommend working through special Airbnb Management software. It will take you about the same time to master them as it takes to get acquainted with the Airbnb functionality, and at the same time you will gain access to new features. For example, through HostyApp you can assign tasks to your team members, such as hosting guests or cleaning. You’ll also have access to advanced analytics, a calendar, and an app to stay connected anywhere.
Prepare your property for rent
Housing needs to be equipped, both price and demand directly depend on this. Keep in mind that cheap furniture can spoil the impression of vacation rental and reduce the cost of the condo. Take high-quality photos so that guests have an idea of all the amenities that your property has.
Finally, we advise you to be an attentive owner. Keep an eye on the local housing market and notice changes that you may need to consider when setting a price. Running an Airbnb property business is impossible to pause, even if everything is going great, you have bookings six months in advance and a decent set of five-star reviews. Be friendly to guests and responsibly approach the order in your property for rent.