Apr. 2, 2021
How to Start an Airbnb Business
Thinking about renting out your home, or an area in it? Wondering how to start an Airbnb business? You’re not alone. consistent with Airbnb, there are 2.9 million hosts worldwide on the platform, with 14,000 new homeowners joining monthly in 2020. Not only that, but quite 200 countries have Airbnb listings now!
Here’s the way to get in on the action.
You might be interested in how to start an Airbnb business without owning a house
Benefits of Starting an Airbnb
Starting an Airbnb business opens you up to a market with over 300 million customer reservations this year and a worth of $31B. You’ll find tremendous schedule flexibility as an Airbnb business owner and, consistent with Earnest, can experience average earnings of about $924 every week in extra income. (Imagine if your earnings are above-average!)
The benefits don’t end there. Starting this business is simpler than other models because there are not any massive upfront costs. you'll set your rental pricing to whatever you think that people can pay, which makes this work worth some time.
Finally, no degree or special training is required to urge up and running as an Airbnb host. All you need is time and dedication. Plus, Airbnb features a great guide to creating money with Airbnb, therefore the revenue is transparent from the beginning.
How to Start an Airbnb Checklist
Starting an Airbnb business is pretty simple. The steps are as follows.
- Create a Business Plan
- Choose Your Business Structure
- Determine Your Business Costs
- Create a Business Name
- Register Your Business and Open Accounts
- Purchase Equipment
- Market Your Airbnb Business
1: Create a Business Plan
A business plan is significant. It’ll help decide what you would like to start your Airbnb business, how it’ll operate, and whether it'll succeed. As challenges and opportunities happen, you’ll refer back to the decision to identify strategies for addressing them. Here are the weather needed for your Airbnb business plan:
- Clearly state your business idea and therefore the problem it solves
- Identify SMART goals (Specific, Measurable, Attainable, Realistic, and Timely)
- Foresee potential problems which may crop up
- Create a target client profile
- Build up Airbnb profiles for you and your rental property
- Stay at some Airbnb properties yourself to realize a full understanding of the system
- Check for tax breaks and native grants
Thinking through your costs is going to be an enormous part of your business plan. We’ll provide more help thereupon within the “Determine Your Business Costs” section below.
2: LLC vs Sole Proprietorship: Choose Your Business Structure
In the U.S., all active businesses must be registered with the IRC. An Airbnb business can take a couple of different company structures. Consider your legal and tax situation to settle on the simplest business structure for your situation. Airbnb businesses are generally small, so they’re registered as either:
- LLCs (limited liability companies), which supply liability protection and tax flexibility
- Sole proprietorships, which are easier and cheaper to line up but don’t offer an equivalent protection
The liability protection of an LLC structure shields your assets from lawsuits against your Airbnb business. By having an LLC, you'll also avoid the double taxation of an organization structure.
You can file for an LLC online, but first, research what business license you'll need.
3: Determine Your Business Costs
There are tons to think through when deciding the prices you’ll face as an Airbnb host. does one have the time to be a landlord, or do you have to decide to hire and pay a manager to handle bookings, visits, and cleanings? Is your area seasonal, and way may that affect the number of bookings you've got each year?
How many rooms does one want to hire out, or will it be the whole property? Will you offer amenities like parking, air conditioning/heat, breakfast, a swimming bath, hot tub, etc? What about pets? If they’re allowed, what deposit will you charge? How will you manage access and security of the property both once you have tenants and when the place is empty?
The list below will help guide you in determining your business costs:
- Calculate small business costs like fixed costs, ongoing expenses, and one-time costs like equipment, lease/rent, and business taxes
- Select the sort of Airbnb business model/market during which to work (single room vs entire home)
- Identify equipment and material costs such as cleaning supplies, food amenities, 3% Airbnb fees, and damage costs
- Check for tax breaks and native grants
- Obtain insurance estimates for insurance (you may have homeowner’s insurance, and Airbnb offers dedicated host insurance)
- Research costs for preparing and maintaining your property between guests (a 2,000 sq. ft. home costs $150 to $250 to wash, but figure on regular maintenance and yard care too)
Thinking through these questions will assist you to find out what proportion your Airbnb can earn, and what it'll cost to earn that cash.
How does one fund your startup costs?
Starting an Airbnb business does require some up-front money. If you’re concerned about where it’ll come from, consider these ideas:
- Government assistance: the govt has found out several sorts of assistance for little business owners who need financial help.
- Business credit cards: take care with this one since using cards without a payback plan could leave you with long-term debt (and that won’t help your credit score).
- Loans: the tiny Business Administration (SBA) offers different loans alongside banks and other lending institutions. you would possibly also ask your bank to ascertain if there are loan options available.
- Friends and family: Start together with your clique — the people that know you and believe you. Tell them about your business idea and see if they will loan or invest. you'll probably recover terms from them then you'll elsewhere.
4: Create a Business Name
Now for the really fun part — name your business! As you undergo this process, test your Airbnb name ideas for understandability and memorability. Some owners use words that evoke an emotion, like cozy, luxurious, or charming in their business names. Others choose names that reflect the character of the world they’re in.
Check local business registration services and online services to form sure you don’t pick an Airbnb business name that’s taken. Otherwise, you'll find yourself facing lawsuits.
Check to ascertain if matching URL (website address) and social media handles are available for your chosen name. you'll use GoDaddy’s domain search tool to form sure your hideaway’s name is fresh.
5: Register Your Business and Open Financial Accounts
Here are the legal and licensing requirements for starting an Airbnb business:
- Register your chosen business structure (LLC vs sole prop)
- Get an employer number via the IRS
- Secure general insurance. Airbnb provides some insurance, but you'll consider getting your own also.
- Open a business bank account: Avoid mixing business finances with personal assets just in case of an audit or lawsuit.
- Consider registering your property with the local municipality or state. Read abreast of your local laws and regulations regarding Airbnb or short-term rentals.
6: Purchase Equipment For Your Airbnb Business
Great news! There isn’t much equipment you’ll get to start an Airbnb business, and what you are doing need is straightforward to urge.
First, create an organized workspace where you'll keep track of your property and guest details, including everything from cleaning fees and income to deal with rules and percentages. A disorganized landlord often makes for a poor guest experience and your reviews will make or break you on Airbnb.
Second, consider the continued supplies you’ll need. Think cleaning (do it yourself or hire a cleaning service), guest snacks, linens, paper supplies (toilet paper, paper towels), light bulbs, etc.
You may also consider purchasing security cameras for the property and lockboxes that leave contactless check-in. Airbnb features a great guide sprucing up your space.
7: Marketing Your Airbnb Business
Airbnb says it's over 7 million property listings on its site. You’ll get to put within the work to form your property stand out!
First, consider the story of your property. Does it have an intriguing history? are you able to paint the image of how a guest will feel when staying there? Stories are effective, so make yours sing. Then, see if you'll find a URL that supports the story. as an example, maybe your home is where Lincoln ate a meal. you'll buy the domain or something similar then redirect it to your Airbnb listing.
Next, go social. inspect the cheap advertising options offered by Instagram, Pinterest, Twitter, Facebook, and YouTube. These platforms can assist you to get the word out about your Airbnb offering. Consider joining vacation rental groups and forums so you'll collaborate with others and learn from them. Submit your property to style sites or something similar where readers have an interest in properties with stories. Consider incentivizing your Airbnb guests to recommend your property on their social media.
Now, think physical — location, that is. check-in for Google My Business and native business and tourist directories. You’ll get most of your business through Airbnb, but to catch locals trying to find a close-to-home experience, Google remains king. Make flyers and business cards too, then share them with others both locally and once you travel.
How to Write Your Airbnb Listing
Like marketing, your property listing on Airbnb may be a crucial deciding factor for guests to settle on your property over another. When writing your listing, believe what others have said about your property in positive reviews. Did they particularly love the water view? The way the sunrise kisses the windows within the morning? Something else?
Pay attention to the photographs of your property. Do they convey what you plan, like it is clean, spacious, cozy, warm, unique, etc? If not, retake them or hire knowledgeable.
Be sure to explain and show all critical rooms of the property (kitchen, bedroom, bathroom). If your property features a unique feature (hot tub, wraparound porch, etc.), include it in your photos and therefore the description. Your renters want to understand they’re getting a special, suitable place for his or her stay.
Finally, include information about the encompassing town. Let your guests know what they will neutralize your town for a fun, memorable experience. Airbnb’s guide to writing an inventory may be a great root.
Opening an Airbnb business may be a good side hustle that will be grown into a full-time gig. It doesn’t require special training or degrees, and it's low startup costs, yet offers an honest, quick monthly income if you’re willing to place within the time and dedication. You can also make money on Airbnb without owning property.