Everything You Need to Know About Becoming an Airbnb Host
Ever dream of owning an Airbnb? Is that empty apartment in the middle of town calling your name? Let us walk you through what you'll need to know before you get started.
Purchase the right property
If you're renting out a property you already own, great! If not, you're going to need to be very strategic about where you buy your investment property. Here's what you need to think about.
Are you allowed to have an Airbnb?
Some HOAs and cities have specific rules against renting out your property. Before you do anything, make sure you're legally allowed to rent out the house you're thinking of buying.
Is housing affordable?
If you're buying in a high cost of a living area (and not getting a good deal), you need to make sure that your Airbnb income is going to be greater than your mortgage, otherwise, you'll be underwater before you know it. The exception? If you are buying this as a personal vacation home or retirement property and Airbnb is just supplementary income, then it's okay to worry less about home affordability.
Is the destination popular?
Your Airbnb doesn't have to be in L.A. or NYC, but making sure it's in a city where you're likely to get tourists or business visitors is pretty key.
Is your property desirable?
Is it located close to big attractions or in a beautiful setting? Is it big enough to sleep more than one person? Does it have a kitchen and other amenities? These are all things potential guests are going to be looking for, so make sure you are too.
Manage it like pro
Now that you have the right property, you're probably wondering how you're going to manage this business. An easy (but more expensive) choice is to just hire an onsite property manager who can take care of all the nitty-gritty details for you. But if you're trying to make the maximum profit from your Airbnb, you're probably thinking more about managing it yourself.
- Be available: Managing your Airbnb is at the very least a part-time job. Block off time in your week to take care of the management tasks and be prepared for last-minute phone calls or emails from your guests.
- Be knowledgable: Different towns have different rules and regulations about rental properties. Make sure you know what you're allowed to do and what you're not.
- Be responsive: Your guests are going to want to hear back from you within a few hours of contacting you. If you don't think you can handle that, then consider hiring a professional.
- Be organized: Remember, you're going to have to pay taxes on all of this eventually. You're going to want to make sure you keep great records of everyone's stay, what you bought to keep the place running, and anything else that might impact your taxes.
Airbnb has some great tools built right into the platform, but you can also find other software that will help you manage your listings, keep your guest communications in one place, automate billing, and keep records.
Let us walk you through it. Check out our guide to Airbnb Property Management.
Market the heck out of it
If you build it (and market it), they will come.
Getting the word out about your Airbnb is key. Luckily, getting on Airbnb's platform is a great first step.
Once you're there, you need to take certain steps to make sure your property is seen before other similar ones. How do you do that? People want to have a good sense of what they're going to get from their stay. So make sure you take great pictures, ask for reviews, and be extremely responsive to anyone who messages you with questions.
When you have your Airbnb listing in a good place, make sure you look at other places you can list in your area. Maybe your visitor's bureau has a list of unique or cool places to stay. Maybe you can reach out to a local travel blogger to ask if they can write a story about your listing. Just remember to be creative!
Let us walk you through it. See what we have to say about using SEO to boost your visibility on Airbnb.
Pay the taxes
And now for everyone's favorite topic—taxes.
Taxes for your Airbnb are pretty easy to figure out at the federal level—if you earn over $20,000 or you have over 200 transactions in a calendar year, then your rental counts as taxable income—but things start to get a little foggy at the local and state level.
That's because every city and every state may have their own, unique rules about what counts as taxable income and what you have to pay as an Airbnb owner. The IRS website has some great, state-specific information. But it would also pay to hire a professional who's familiar with the laws in your state. Even if you just get them to spend one tax season educating you, it will be worth it when you're ready to do your taxes the next year.
Let us walk you through it. Get the Airbnb taxes guide.
Reap the rewards
You didn't do all of that work for your health, right?
Now that you have extra income coming in from your Airbnb, what are you going to do with it?
- Travel: Far off places are calling your name. Plus you can get great ideas from other Airbnb's!
- Start a college fund: Make it so your kid won't need a side hustle in college.
- Double your retirement: Can you imagine a life of relaxation starting at 50?
- Reinvest: Make your place bigger, remodel, or buy a second Airbnb property.
- Pay off your mortgage: A debt-free life sounds like a dream.
Let us walk you through it. Learn how to pay your mortgage with your Airbnb earnings.
So what do you think? Are you ready to become an Airbnb host?