How To Start an Airbnb
So, you’re wondering how to start an Airbnb business. That’s great! Since 2009 Airbnb has grown into a 31 billion dollar business with over four million hosts worldwide and more than 500,000 properties in the US. It’s the perfect time to make some money off your vacation home or to start renting out your current home while you travel.
Before we dive into how to start an Airbnb business, let’s learn a little more about the largest home sharing site.
What is Airbnb?
Airbnb means Air Bed and Breakfast. A typical bed and breakfast are similar to a small hotel with numerous guest and the host living on the property. Airbnb is not quite a b&b, but in some cases, the host may be on the property. Airbnb is a marketplace where owners, also known as hosts, can rent out their homes, rooms, or other accommodations – even cars to those who need a place to stay. The cost to rent is usually less than a comparable hotel, and the rooms are often nicer.
Who uses Airbnb?
Almost 34 million adults used Airbnb in 2017, and that number is expected to grow. With an expected user base of more than 40 million expected in the coming years, it’s clear that there’s going to be a need for more available properties. There are two sides to the Airbnb business, the guest side, and the host side.
Guests, or renters, must create a verified profile that may be linked to a social media profile and requires a photo ID scan. A unique characteristic of Airbnb is that the host can approve or deny a guest. Approval may be due to the guests’ reviews from other properties, or lack of reviews in some cases. This flexibility gives you, the property owner, more control over your Airbnb business and helps minimize risks.
How to setup Airbnb
Getting started as a host with Airbnb is a simple process. You’ll start by filling out the basics of your property. Is it one bedroom in your home, a whole house, or the basement? Once you’ve defined the property details, you’ll upload photos and note any unique features – like hot tub access or parking. Then, you’ll set house rules: things like maximum guests, pets allowed, and your smoking policy. You’ll set your available days and pick your rates. Once you’ve prepped the space, cleaned up, and stocked up on essentials like TP and soaps; you’re ready to start your Airbnb business.
Is Airbnb Profitable?
Every scenario is a bit different. Think of it this way though. Would your home be generating any income while you were on vacation? Does your vacation home make any money when you’re not skiing for the week? Of course, the answer to those questions is no, but there’s more to profitability than that – especially if you’re considering buying a vacation rental to start your Airbnb business.
Many factors will determine whether you can run a profitable Airbnb business, but the most significant component is management. There are numerous options for managing your new Airbnb business. The most common and best choices for managing your new endeavor are using a professional Airbnb management service, operating it on your own, and using an Airbnb management app.
How to manage Airbnb properties
Professional Airbnb Management
Some property management companies have expanded their services to offer professional Airbnb management. Professional management is a more hands-off approach where an experienced team or manager handle the day-to-day management. On the plus side, this is a “set it and forget” way to manage your Airbnb. On the downside, it’s the most expensive way to manage your property and will cut deeply into the profitability of your Airbnb business. The average property manager will take anywhere from 30-45% of your rents. That doesn’t leave much meat on the bone for profits, but there’s something to be said for this mostly worry-free approach. However, when starting an Airbnb business, this option won’t be necessary with a single property. You should also consider maximizing profits with your first property in hopes of affording another rental for your portfolio.
Owner Managed Rental Properties
The next logical choice for your new business is to manage the property on your own. The time commitment to maintain your property is substantial, and there is a ramp-up period for building the business that goes along with it. You can expect not to pay any fees for management, but you can also expect a steep learning curve on the management side. Credit cards processing, email confirmations, and website setup and hosting are just a few things you’ll need to work out.
Airbnb Management App
An Airbnb management app can help bridge the gap between professional management and managing an Airbnb on your own. Not only does the PMBO app manage your Airbnb, but it also works across other channels like HomeAway and Expedia. The right management software lets you professionally manage your property without excessive commissions. Also, setup and management times are less, and once you break down costs, the app makes your Airbnb business more profitable. For a complete breakdown of the differences between Airbnb management options, check out our compare and save page or get started with PMBO by clicking the button below.