How to start an airbnb

How To Start an Airbnb Business

Planning for Airbnb Hosting

Georgie Wileman / Getty Images

However, making an Airbnb successful can be a challenge. While it may be a boon to some hosts, it can be a very risky investment for others. Read below to understand the basics of Airbnb hosting, how to get started, and whether it’s right for you.

Key Takeaways

What Is Airbnb Hosting?

Airbnb is a very popular short-term rental app. It lists photos and details of short-term rental properties, and guests can browse through the options and book a stay for their next vacation. Rental properties can be anything from entire townhouses to treetop tents.

The app is open for anyone to create a property listing and become a host. Airbnb hosts can choose when their properties are available for short-term rental or even “snooze” their listings so that they’re not publicly viewable for a set period of time. No minimum time for property availability is required.

Airbnb guests can select their preferred property and length of stay, then book their reservation. The host doesn’t receive payment until 24 hours after the guest’s scheduled check-in.

Signing up to be an Airbnb host is free. However, Airbnb receives a percentage of all guest stays. Most hosts pay 3% of these earnings to Airbnb; the guests pay for a service fee of under 14.2% of the booking subtotal for cleaning and other costs.

Guests often leave reviews of their stay. They may include details about the space, location, and interactions with the host. Reviews are seen as critically important for the Airbnb host’s future business.

How To Start an Airbnb

Here are the first steps to starting an Airbnb business.

Have a Property

Most Airbnb hosts must own a property. Some may be able to sublease their rented property or sell an experience rather than a stay (see FAQ below for “Can I Start an Airbnb Without a Property?”). If listed as a place to stay, the property must be intended exclusively for lodging. A houseboat, for example, is acceptable as long as it remains stationary during the stay. Other Airbnb properties are marketed as event spaces, which can be rented for parties, photo shoots, meetings, or gatherings.

Research Liability and Insurance Options

An Airbnb host is not required to consider their liability to qualify for hosting. However, hosts take on a lot of risk, including property damage and injured guests.

A host may consider forming a new business structure so the liability doesn’t fall exclusively on their personal assets. Forming a limited liability company (LLC) for an Airbnb business is a common way to do this.

Review Local Laws

Laws regarding short-term rentals vary on state and city levels. Even a property itself, such as a co-op apartment building, may have rules regarding Airbnb rentals. To ensure that an Airbnb rental is legal, it’s critical to become familiar with local laws, such as business and housing standards, city zoning rules, landlord-tenant laws, and government tax collection policies on Airbnb stays.

Post a Listing

Hosts should log in to Airbnb and follow the app prompt to start a listing. They are required to upload at least one photo of the property and to set up a personal profile. On their listing, hosts can set their own rates. Listings should also include:

Should I Start Airbnb Hosting?

Many people can start an Airbnb business—but not all Airbnb businesses are successful. Below are some issues to consider when deciding whether or not an Airbnb business is right for you.

Consider Property Size and Location

Generally, metropolitan areas like San Francisco and New York City have the highest occupancy rates, while popular areas for seasonal vacation rentals such as Park City, Utah, can rake in the highest rate average nationally per night, according to AirDNA. Competition is fiercer in popular areas, however, so hosts should consider how much time and money they are willing to invest to take on the challenge.

Calculate Upkeep Costs

Airbnb strongly recommends that hosts provide basic amenities such as toilet paper and soap. At a minimum, the company says, guests in a lodging rental expect a clean and comfortable sleeping space with access to a bathroom. Some properties have private pools or access to a lakefront. A host should be prepared to maintain the amenities they offer.

Be Communicative

Airbnb hosts need to be reliable, honest, and communicative. For example, Airbnb requires that hosts maintain a high response rate by replying to reservation requests within 24 hours and that they avoid cancellations as much as possible. Hosts should answer guests’ questions and try to resolve problems.

Guests can rate a host’s reliability, and a low rating can result in penalties in addition to poor reviews. A person who is not prepared to be very communicative and connected should reconsider being an Airbnb host.

Consider Risk

Starting an Airbnb business comes with a variety of risks. Hosts have to be constantly mindful of local laws to avoid penalties. Guests are entitled to request refunds. In extreme cases, some of them refuse to leave. Uncontrollable issues can disrupt the travel industry; the pandemic, in fact, slashed Airbnb’s overall revenue by 30% from 2019 to 2020.

A host must decide whether they are willing and able to take on these types of risks. Before starting an Airbnb business, hosts should carefully review Airbnb’s terms and policies, research possible challenges, and speak to experts such as financial consultants and attorneys.

Tips for Successful Airbnb Hosting

Hosts have to be crafty and adaptable to make their business successful. Here are some pro tips.

Study the Market

Hosts should study other listings in their area to make sure that their prices and offerings are competitive. They can also meet up with other hosts in their area to compare notes.

Post an Excellent Listing

Airbnb recommends that hosts take special care to make their listings stand out, meaning they should always:

Set Smart Rates

Price is one of the biggest factors that guests consider when choosing an Airbnb space.

In addition to setting a competitive price for their area, hosts should fluctuate their pricing based on seasons, events, and weekly trends.

Accumulate Positive Reviews

Hosts should do everything they can to acquire positive reviews from guests. Airbnb data suggests that positive reviews on a listing are correlated to higher earnings. Guests can rate their overall experience from one to five stars and leave a written review, which will both live on the listing. Separately, guests can also rate specific elements of their stay including cleanliness, value, accuracy of the listing, communication, arrival experience, and more.

Very highly rated, active hosts may qualify for “Superhost” status on Airbnb, which gives them exclusive rewards and more visibility on the app.

Frequently Asked Questions (FAQs)

Can I start an Airbnb without a property?

If a host is renting their property and does not own it, they still might be able to list it on Airbnb. Through a process called rental arbitrage, a host can sublease the property for short-term rental. These hosts need permission from their landlord and they would have to consult local laws, which vary on the subject. Hosts can also sell experiences on Airbnb such as local tours, workshops, and virtual performances. However, Airbnb charges a 20% service fee to list an experience.

How do I finance an Airbnb business?

An Airbnb host may be able to finance their business by applying for loans, including traditional, asset-based, or hard money loans. Some banks, such as Fannie Mae and Quicken Loans, allow hosts to list their Airbnb income when applying for mortgages.

How easy is it to start an Airbnb business?

It’s very easy, and free, to post an Airbnb listing. However, it takes time, investment, and research to make an Airbnb listing successful, lawful, and protected from risk.

How to start an airbnb

This post may contain affiliate links. Please read my disclosure policy.

This guide, on how to start Airbnb business is based on my personal experiences over the last five years.

Along with the insight I have acquired with 100’s of properties that I have been involved with. There are many factors to be considered before

….listing your property on Airbnb ….as not every property will generate the same amount of profit.

There are many different factors to consider if it will be a good venture or a total disaster.

Don’t make your decision based on the success stories you have heard – there are ways to turn it into a more educated decision.

How to start Airbnb business? It is a four-stage process, where every phase is essential, and you will need to stay on top at all times if you want it to be a profitable business.

Running an Airbnb is all about meeting guest expectations at all times, and even a tiny glitch in the process can lead to business failure in a short period.

Here are the key phases and steps of the whole process and a summary of my experience at each stage:

Not every property is suitable for Airbnb; it can be due to the local regulations, the property itself, financial viability or even the neighbourhood. Airdna market research is an excellent tool for such purposes.

1. CHECK AIRBNB REGULATIONS IN YOUR AREA

Before deciding to become an Airbnb host, you need to find out the local regulations in your city. With the exponential growth of Airbnb over the last few years, it has been gaining significant lousy press as well, mainly due to irresponsible hosts.

This link not only provides you with the regulatory information in your area but also offers guidance on how to ensure your Airbnb is safe for guests and complies with all the local safety regulations.

I cannot stress enough how important it is to check every information on this link and make sure you operate your Airbnb per the law and keep it safe for guests.

2. HOW TO START AIRBNB: ENSURE FINANCIAL VIABILITY

How to start Airbnb:

On top of this, many countries offer tax relief for the revenue generated by ‘sharing’ space in your home under schemes similar to ‘Rent a Room Relief‘ we have in the UK.

It becomes a different game altogether when you rent an entire property on Airbnb.

Rent your holiday home: If you have a ‘holiday home’ and intend to use it periodically – a traditional long term rental won’t work for you, as the tenant needs an assured period, and it will not fit with your holiday plans.

It makes perfect sense to let it on Airbnb, and you can block the calendar for the dates you wish to use the property. Financially it is an excellent decision to rent it on Airbnb for the periods you will not use it.

Rent your second home: If you own a second property and want to rent it on Airbnb, a detailed financial analysis is needed to see if it can give you higher returns than a long-term tenancy.

HOW TO START AIRBNB

Short Term Airbnb Vs Long Term Rental

Airbnb – Benefits

Airbnb – Disadvantages

Long Term Rental – Benefits

Long Term Rental – Disadvantages

3. HOW TO START AIRBNB: CHECK SUITABILITY

Not every property is suitable for Airbnb. An unsuitable property will get bookings initially, but it won’t last long and will gradually come to a halt as the crushing factors start adding up.

Exteriors

One of the most prominent mistakes people make when creating an Airbnb listing is not to add photos of the property’s exteriors.

No matter how beautiful the interiors of your property are, people get a sense of safety and security when they see how it looks from the outside. A shoddy building on a patchy road will not go well with your guests.

Interiors

It doesn’t have to look like a posh hotel. As long as the place looks clean, fresh with plenty of natural light, you will be okay. Note, amenities within the property is a separate topic.

Accessibility

Entry to the property should be via a well-lit, easily accessible path; step-free or wheelchair accessible is even better.

You will face difficulties if entry is via a standard door to the building, and other residents will not be pleased with you putting a lockbox near the building entrance. If the building has a reception service at the door and the building rules are not Airbnb friendly – you will run into trouble from day one.

Key handover

If it is the main door property, you can put a lockbox somewhere close to the entrance or use a smart lock.

It gets complicated when other residents are in the building, and the entry is through an ordinary door or a reception area. Think about where you will place the keys or lockbox for a guest to collect. If nothing else works, you can manually pass the keys to guests or speak to a nearby shop owner or friendly neighbour. You can use one of the vital handover service providers.

Sensitive Neighbours

Let’s accept that an Airbnb in a residential area is an inconvenience to neighbours as not all your guests will be respectful to the house rules.

A lesser-known tool by Airbnb enables anyone to complain about a neighbour they think is an Airbnb host, and his guests are causing inconvenience to others.

Safety

It has to be fire safe; there should be a carbon monoxide alarm (CO) in the kitchen and near any other combustion-based appliance on the property. A fire alarm is a must too.

I had a guest who almost brought one of my listings in LA downtown to a grinding halt when she complained to Airbnb about someone smoking weed outside the building. People should feel safe during the stay; else, it won’t be long before your booking calendar starts looking empty.

Things will not always be in your control, but as long as you can explain and it doesn’t happen too often – you will be fine.

Privacy

Bedrooms should have dark curtains, the bathroom should have tinted glass, and the guest should be able to get on with the confidentiality promised in the listing.

Cleanliness

The path leading to the property entrance should be clutter-free clean. Interiors should be immaculate and free of odour, dust, damp or bugs. If a guest reports bugs in the property, Airbnb can shut it down almost immediately without any remorse.

Noise levels

Make sure noise levels in the property stay within reasonable limits for guests to relax and have a good sleep.

Most Airbnb’s are in the busiest part of a city, where noise is the most frequent complaint and is often overlooked by less experienced hosts.

Noise can be from a loud neighbour, street noise, a restaurant or pub nearby, construction in the area or pets.

It may be out of your control at times, but as long as you mention it clearly and warn the guest (under the house rules section of your Airbnb listing), you will be fine.

Proximity

It is essential to be within a reasonable distance from public transport, train station or airport. If you are remote, plan to provide pickup from the nearest public transport.

Convenience

Next in this how to start Airbnb guide, the guest should be able to come in or go out of the property at their convenience. A supermarket and pharmacy shop within walking distance or a short drive is highly desirable.

Avoid a property on the third floor, and there is no lift. People always overpack, and they will not like dragging their heavy suitcases over several flights of stairs.

Even if you warn them of ‘no lift’ before booking, people forget such warnings and eventually leave a scorching review about the experience of having to drag luggage up and down the stairs in your Airbnb.

4. HOW TO START AIRBNB: IDENTIFY THE PROCESSES

Key handover

It would help if you thought about passing the keys to the guests. A lockbox or smart lock is usually the most convenient, but it’s not always possible to install them due to building restrictions.

An alternative method is to pass the keys manually or use a key exchange service such as KeyNest.

Cleaning

Think of who will clean the property after each guest, how long will it take to clean up space, is it easy to find cleaners in your area?

Who will collect the dirty laundry and deliver it fresh at each turnover? Try to work out the cost of cleaning and laundry separately.

You can use a service like GetProperly to find cleaners in your area.

Maintenance

Next on how to start Airbnb, plan for situations when things may go wrong; if guests lock themselves out; if the AC or the boiler stop working – you need to prearrange a handyman and a locksmith for situations like this.

Train your cleaning team to keep an eye on crucial things on the property so that they can inform you on time.

Make sure you thoroughly inspect the property every six months.

Guest Check-in/Check out

Identify the check-in/check-out procedures; there are several pertinent questions you need to ask yourself, such as:

There are pros and cons of each; for example, asking the guest to strip off sheets will save you effort when cleaning, but at the same time, it will make it very difficult for you to see any damage to the sheets.

Property Availability

Under the ‘Availability’ settings, you can set four key timings directly impacting your operations:

You can choose to open ‘All future dates’, which I don’t recommend. ‘Dates unavailable by default’ is advisable if you rent the property only for a certain period, and you can open the calendar for specific days.

If you intend to use the property for the long term, I recommend setting it to rolling 6 or 9 months in the future.

From here, there are three types of pricing models you can choose from for your property:

➤ Airbnb Smart Pricing is a tool you can choose to opt-in, and it will tell you the price for each night based on their calculations.

It uses the minimum, maximum and base price set in your price settings.

➤ Dynamic Pricing is a sophisticated pricing strategy similar to what the Hotel and Airline industry use; it calculates the price for each day of the year individually based on the local demand, occupancy levels, past data, etc.

Dynamic Pricing is the best option to go for, and tools like WheelHouse can do so much more than just Pricing as it is a revenue management system; if used correctly, it can increase your profit considerably.

You can set the Airbnb payment method under Profile> Settings> Payments & Payouts; under this you can:

Do you have a friend or family member nearby to support you if a situation arises?

How to Start an Airbnb Business in 6 Steps — and Make Money

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Becoming an Airbnb host may seem less involved than starting another type of business from scratch, but it’s important to understand the time, effort and investment involved in starting an Airbnb business to make money. Here are the key steps to start an Airbnb business.

How to start an Airbnb business

1. Find out if you need permission

Get the proper permission from your landlord, co-op board or homeowners association, if relevant.

Read your lease, which may include a provision about subletting.

Check if your homeowners association has restrictions regarding renting your home on a short-term basis.

2. Find and prepare your Airbnb space

Whether it’s a single room that shares your bathroom, a private wing with its own entrance or your entire home while you take off for the weekend — you likely need to invest something in the space. Some costs to consider include:

Installing a keyless lock to make check-in easier.

Buying things that make the space more comfortable for long-term guests, such as a fridge, microwave and Keurig.

Building a wall to close off a room.

Creating a separate, furnished television area.

Stocking the space with clean sheets, towels and toilet paper. (To score the highest ratings, you’ll need to go above and beyond those basics.)

Paying higher utility bills.

Providing cleaning services between reservations.

Compensating a co-host (see below).

Covering taxes and the Airbnb host fee.

3. Set your price

Think about affordability, audience and market.

Airbnb fees for most hosts is 3% of the booking subtotal. The fee is higher if you’re an Airbnb Plus host, are in Italy or if you have a cancellation policy that’s extremely strict. The listing price your guests see is higher than what you earn.

Airbnb’s metrics show how your nightly prices compare to other Airbnbs in the area, as well as when to consider lowering (or raising) your prices on certain days of the week or for surges in demand. You can set minimums for the number of nights people can stay at your location, which can offset the cost of turning over the space (cleaning and upkeep). You can also consider charging for extra guests or for additional services you provide, such as cleaning, equipment rental, pet-friendliness or tours.

Airbnb charges guests before arrival, and it sends you your money according to the method of your choice (PayPal or direct deposit, for example) 24 hours after your guest checks in. You cannot accept cash payments for your Airbnb. You can accept Visa, Mastercard, American Express, Discover, debit cards, Apple Pay, Google Pay and PayPal.

Other factors might affect how much you get paid, including weekly or monthly discounts, weekend or seasonal pricing, payment for co-hosts you enlist, or VAT — value-added tax — in certain non-U.S. locations.

4. List your space

Write an honest listing; don’t exaggerate things or withhold information about problem areas.

Highlight what’s special about your space so you stand out from other listings.

Note accessibility features that can help guests easily navigate the space.

Include great photos to help your guests understand the space’s size and features.

5. Hire or enlist some help (a co-host)

You may want to have at least one other person help you with:

Emails and communications.

Repairs or requests at the site.

Neighborhood-specific tips for guests.

The check-in process.

Add your co-host to your listing (you can add up to three), and make sure they understand Airbnb’s Co-host Terms of Service. You and your co-host will determine how much they’ll be paid per reservation. If you can’t find a trusted co-host, third-party companies can help hosts deal with inquiries, clean spaces and more.

6. Host an Airbnb experience

If you’re not in a position to rent out a home, you can host an Airbnb experience instead.

Airbnb Experiences is the platform’s tour-guide service, which hooks up guests with knowledgeable hosts for unique, hyper-local activities. Think yoga classes under the Eiffel Tower, surf lessons at Venice Beach, a Harry Potter walking tour in London or a pasta-making class in Rome. Airbnb experiences aren’t available in every city, though.

You pick your schedule, how often you can host, the size of the group you can oversee and your rate.

You’ll need to submit an application with Airbnb, which will vet you and your experience. Airbnb typically responds within a week. You might need to register as a business or get a business license depending on your local laws and whether your gig meets with your jurisdiction’s definition of business activities. Pay attention to legal stipulations if your planned experience involves alcohol, food or transportation.

How much can you make owning an Airbnb?

Your earning potential depends on:

How much you charge for your space.

How often you can rent it out.

Both of those things depend on how much time and money you spend on furnishing and maintaining your space.

Airbnb says it is active in more than 100,000 cities around the world, with more than 6 million listings. For the vast majority of people, becoming a host is a gig — not a full-time job with full-time earning potential.

Keep your profit expectations conservative, especially if you’re not willing or able to contribute huge amounts of time and energy into your hosting gig.

The more effort you put into your space to make it as beautiful, functional and comfortable as possible — and the more time you allot to responding to guest concerns — the better your reviews and ratings will be. Responding to inquiries quickly is key.

You get rated on overall experience, accuracy, cleanliness, communication, check-in, location, value and amenities. Good reviews can help you rise in Airbnb’s search rankings, and being high in the search rankings means you’ll appear more often in people’s search results, which can result in more bookings.

How much are Airbnb taxes?

Sales tax

Your city may require you to collect sales tax or gross receipts tax from guests, and you’ll need to let guests know the exact amount before they book. You might collect that tax from your guests when they book.

Income tax

Tax deductions

On your tax return, you may be able to deduct certain expenses associated with your Airbnb business. These expenses might include:

How to Start an Airbnb Business: 14 Steps to Building a Thriving Venture

To start an Airbnb business does not call for rocket science. Sure, it is a time-consuming process to find a property and turn it into a guest-ready vacation rental. However, the rewarding experience will make all the required groundwork completely worth it.

If the world of real estate is calling your name, here’s how you can start an Airbnb business from scratch.

Is It Profitable to Have an Airbnb?

Starting an Airbnb business can be rewarding both personally and professionally. Not only will you meet new travelers from around the world, but it can also be financially lucrative.

What’s more, analysts also anticipate that there will be an increase in bookings as travel resumes. In fact, the CEO of Airbnb, Brian Chesky, stated that their vacation rental platform would need millions of new hosts to meet the surge in demand for vacation rental bookings. So, considering all of this, it can still be profitable to start an Airbnb business.

14 Steps to Building a Thriving Airbnb Business

Starting an Airbnb business can quickly become overwhelming if you do not follow a step-by-step process. By breaking it down into simpler and more manageable steps, there is a smaller chance that you will make a costly mistake along the way. To help you start an Airbnb business, we have identified the following 14 tasks that will help you to kickstart and grow your new venture into a successful Airbnb business.

1. Define your budget

Before you get down to property search, you should first figure out how much you are ready to spend on acquiring it or setting up an existing one. You should also remember that you will have to furnish the property and that there will be running expenses like vacation rental insurance or cleaning costs. So, keep these expenses in mind when you calculate what you can afford to spend.

2. Find a suitable real estate market

There are a couple of factors that you should take into account when searching for a suitable market to invest in a vacation rental property. These include:

Tourist demand

It is key that you research how a specific location can impact the demand. For example, cities with unique features and tourist attractions can boast all-year demand. Though, this is not always the case.

For instance, if the reason why travelers visit a city is to attend a particular event, your demand will correspond to these dates on the calendar. In most cases, though, demand will fluctuate as the seasons change.

Local rules and regulations

3. Search for a property with great income potential

Not only will the real estate market impact your income potential, but also the property itself. To help you find the most appropriate property with great earning potential, factor in the following points:

Property’s location

Is the property in question easy to reach? Is it accessible by different sorts of transport? Is it close to tourist attractions or stores, shops, cafes, and bars? You need to answer these questions before you start investing in a specific rental. Accessibility to your property, its proximity to amenities combined with stable demand will have a positive impact on your cash flow throughout the year.

Property’s type and size

As soon as you have defined your budget, you can use it to guide you with regards to the type and size of the property that you can afford. A studio apartment and a triple-story family home can both make profitable vacation rentals. In short, the type and size of the property should not exceed your budget. While you can charge more per night for bigger accommodation, you can also add a bunk bed or sleeper couch to create additional sleeping for smaller properties.

Type of travelers the property will attract

Different types of properties attract different kinds of travelers. For example, if your goal is to host families traveling with young kids or larger groups, it is better to invest in bigger properties, preferably in a quiet neighborhood.

On the other hand, a smaller apartment or condo in a bustling urban location will be better if you want to attract younger travelers or couples. And, if you want to attract business travelers, you will want to look for a property that is close to public transport and convention centers yet can still offer a quiet space.

4. Analyze the projected ROI

The next step is to estimate how much you can potentially earn on the selected property by comparing competitor listings in a certain area. Not only should you keep an eye on what others are charging, but you should also analyze startup costs, ongoing expenses, and projected monthly occupancy rate. This way, you will be able to work out if the property will bring in a positive cash flow.

5. Decide how you will finance your property

There are a couple of options available if you need to secure financing to buy an investment property. These include:

Cash-out refinance

This approach is best if you have built up significant equity in your primary residence and have a good credit score. In this case, you can use a cash-out refinance to buy a vacation rental property. With a bigger mortgage, you can then use the difference in cash and put it toward a down payment on your short-term rental property.

Reverse mortgage

A reverse mortgage might be the best approach for those who are aged 62 years or older. Unlike a regular mortgage that requires you to pay back the loan in monthly installments, a reverse mortgage gives you access to the entire amount, and you don’t need to pay it back until you sell the property or move out. Just remember that the mortgage interest owed will also continue to grow the longer the loan remains unpaid.

Home equity lines of credit

If you have enough equity in your current property, you can take a home equity line of credit to purchase a short-term rental property. This way, you can leave your current mortgage rate unchanged while you take on a separate mortgage with different Ts and Cs.

Traditional vacation rental financing

For a more conventional approach to financing a property, you can always apply for a loan from a bank or credit institution. You might need to pay a down payment upfront and then pay the outstanding balance in monthly installments over the next 15 or 20 years.

6. Obtain legal permission and licenses

Before you get into Airbnb hosting, you need to make sure that you have the legal certification to rent out a short-term rental property. Here’s what you need to do to be on the safe side:

7. Register for taxes

8. Get vacation rental insurance

While platforms like Airbnb and Vrbo offer basic protection, there are still many situations that are excluded, like theft of cash or intentional property damage. In short, these protection policies do not offer enough protection, especially when it comes to more serious issues.

9. Prepare your vacation rental for guests

Before you can welcome guests, you need to complete maintenance works, property repairs, and deep cleaning. You will also need to set up a smooth check-in process before accepting bookings.

If the check-in process becomes confusing or frustrating, guests may be put off. Here are a few key steps to ensure a smooth and seamless arrival for your guests:

10. Invest in high-quality essential amenities (and add extra touches)

Your vacation rental needs to offer a full range of supplies to help your guests enjoy their stay. Guests should not need to worry about bringing their own supplies. If your rental is missing amenities, such as kitchen essentials, bathroom supplies, or even a high-quality mattress for a good night’s rest, guests may get frustrated. A poorly-equipped accommodation will lead to a mediocre guest experience and negative reviews.

While providing basics is a must, extra amenities are no less important to ensure a delightful stay. Going the extra mile in terms of your amenities will help you to present yourself as a thoughtful host. Here are some of the amenities that can be included as extras:

It is also a good idea to create a welcome package. It is this type of extra touch that sets experienced hosts apart from beginners. A welcome basket with a few snacks can turn an ordinary stay into a memorable one. Think of it as a chance not only to dazzle your guests but also to put your creative skills to good use.

For a thoughtful arrival pack that will help guests have a great stay with you, follow this checklist:

11. Find the most suitable vacation rental platform

Once your property is all set up and ready, you can turn your attention to listing it on a vacation rental platform(s). For this step, you will let the type of audience you are trying to attract and the targeted market guide you.

However, a word of warning, t he process of creating an Airbnb listing takes time, and you will need to apply a bit of thought and creativity into crafting it. You want it to be a true reflection of your rental, and it should look as professional as possible. When creating your listing, make sure to complete the following tasks:

12. Automate your routine hosting operations

13. Monitor your business performance

It is crucial to have a business plan and outlined goals to propel your business forward. However, monitoring your metrics and measuring results is not a one-day task. You need to define your metrics and establish a process to be sure your business is running as intended. The good news is that vacation rental software like iGMS also allows hosts to make use of reporting tools and the Dashboard feature to get insights into how the business performs.

The benefit of using such a tool is that you can keep track of the most critical metrics relating to your overall business performance and guest communication. These include:

This real-time data is presented in a way that’s simple to digest at a glance allowing you to draw the right conclusions easily.

14. Build your brand and market your short-term rental to reach new heights

One of the most crucial steps to long-term success lies in well-thought-out and consistent marketing. To make money on Airbnb, you need to remain competitive. So, it is necessary to keep an eye on competitor listings. Research what they are doing and how they are positioning themselves when planning your branding and marketing strategies.

You can, for example, consider the possibility of creating a business website and brand logo. Another idea is to use PPC ads on Google and social media, implement an email marketing strategy, and set up partnerships.

Here are some other practical ideas to generate more exposure for your vacation rental:

Final Thoughts

Starting a vacation rental business requires forethought and planning. Before you start welcoming your first guests, there are plenty of tasks to complete, such as finding the right property and getting yourself familiar with the local rules, regulations, and tax implications.

So, the best idea is to break the whole process of launching an Airbnb venture into smaller, more manageable steps. This way, you are less likely to forget an important element or start to feel discouraged.

About the Author
Olga Vasylieva is the Content and Social Media Team Lead at iGMS. Olga is on a mission to help hosts and property managers grow their businesses and deliver an excellent guest experience. She is a travel enthusiast and is inspired by life in all its aspects.

How to Start an Airbnb Business

An Airbnb business supplies guests with a place to stay within a person’s home. Many travelers are looking for lodging which is a little more personal and unique. Airbnb rentals offer a home feel, versus that of a hotel or motel. Guests may stay as short as one or two days or extended stays up to two weeks.

You may also be interested in additional side hustle ideas.

Learn how to start your own Airbnb Business and whether it is the right fit for you.

Start an airbnb business by following these 10 steps:

There is more to starting a business than just registering it with the state. We have put together this simple guide to starting your airbnb business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.

STEP 1: Plan your business

A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:

Luckily we have done a lot of this research for you.

What are the costs involved in opening an airbnb business?

Because you’re renting out your own space(s), much of the costs involved will be maintenance and necessary upgrades. Cleaning supplies and amenities for guests will also be a relatively inexpensive cost, depending on what you offer. Airbnb also charges some fees to the renter and customer.

Business costs include:

What are the ongoing expenses for an airbnb business?

Regularly re-stocking amenities in your rental(s) and periodically updating towels and linens will constitute a portion of your expenses. Any repairs, cleaning services, or maintenance fees will be incurred, as needed.

Who is the target market?

Typical customers for Airbnb spaces are looking for a more personal touch than a hotel/motel. They may also be looking for a space in an area which doesn’t have hotels available. Most customers are looking for a brief stay, usually between 2 and 5 days. For renters who offer their entire home, the clientele may be groups staying for special events, such as business trips or seminars, large sporting events, or music/concert events in the area.

How does an airbnb business make money?

Airbnb renters make money through the rental of rooms in their house or the whole house. Renters will pay a daily rental fee. Some renters may choose to charge different rates for weekdays and weekends or for extended stays versus a few days.

How much can you charge customers?

Rental rates vary, depending on the size of the rental and the location. Most rates are comparable to hotel rates in the area, but you will need to conduct some market research to determine what the appropriate rates are for your area.

How much profit can an airbnb business make?

How can you make your business more profitable?

An Airbnb business makes its money off of the renter’s reputation and customer reviews. Therefore, interacting with customers is a must. Return customers and long-term customers can be a great bonus, once you’re established as a valued renter. Remember to keep your rental updated and the photos on your page should be updated to reflect the positive attributes of your rental. Finally, take advantage of social media and market yourself in your own spaces. Reaching customers and having them return is key to a successful business.

What will you name your business?

Choosing the right name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Airbnb Business Name Generator

If you operate a sole proprietorship, you might want to operate under a business name other than your own name. Visit our DBA guide to learn more.

When registering a business name, we recommend researching your business name by checking:

It’s very important to secure your domain name before someone else does.

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STEP 2: Form a legal entity

Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your airbnb business is sued.

Read our Guide to Form Your Own LLC

Have a Professional Service Form your LLC for You

Two such reliable services:

You can form an LLC yourself and pay only the minimal state LLC costs or hire one of the Best LLC Services for a small, additional fee.

Recommended: You will need to elect a registered agent for your LLC. LLC formation packages usually include a free year of registered agent services. You can choose to hire a registered agent or act as your own.

STEP 3: Register for taxes

You will need to register for a variety of state and federal taxes before you can open for business.

In order to register for taxes you will need to apply for an EIN. It’s really easy and free!

You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.

Learn how to get an EIN in our What is an EIN guide or find your existing EIN using our EIN lookup guide.

Small Business Taxes

Depending on which business structure you choose, you might have different options for how your business will be taxed. For example, some LLCs could benefit from being taxed as an S corporation (S corp).

You can learn more about small business taxes in these guides:

There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.

STEP 4: Open a business bank account & credit card

Using dedicated business banking and credit accounts is essential for personal asset protection.

When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.

Additionally, learning how to build business credit can help you get credit cards and other financing in your business’s name (instead of yours), better interest rates, higher lines of credit, and more.

Open a business bank account

Besides being a requirement when applying for business loans, opening a business bank account:

Recommended: Read our Best Banks for Small Business review to find the best national bank or credit union.

Open net 30 accounts

Net 30 accounts are used to establish and build business credit as well as increase business cash flow. With a net 30 account, businesses buy goods and repay the full balance within a 30-day term.

NetMany net 30 credit vendors report to the major business credit bureaus (Dun & Bradstreet, Experian Business, and Equifax Business Credit). This is how businesses build business credit so they can qualify for credit cards and other lines of credit.

Recommended: Read our best net 30 vendors, guide and start building business credit.

Get a business credit card

Recommended: Apply for an easy approval business credit card from Divvy and build your business credit quickly.

STEP 5: Set up business accounting

Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.

Make LLC accounting easy with our LLC Expenses Cheat Sheet.

STEP 6: Obtain necessary permits and licenses

Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.

State & Local Business Licensing Requirements

Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.

For more information about local licenses and permits:

STEP 7: Get business insurance

Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.

There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.

Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers’ Compensation Coverage.

Recommended: Learn what business insurance for your Airbnb Business will cost.

STEP 8: Define your brand

Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.

If you aren’t feeling confident about designing your small business logo, then check out our Design Guides for Beginners, we’ll give you helpful tips and advice for creating the best unique logo for your business.

Recommended: Get a logo using Truic’s free logo Generator no email or sign up required, or use a Premium Logo Maker.

If you already have a logo, you can also add it to a QR code with our Free QR Code Generator. Choose from 13 QR code types to create a code for your business cards and publications, or to help spread awareness for your new website.

How to promote & market an airbnb business

Since Airbnb’s site is responsible for listings and bookings, much of your marketing and promotion will come from positive customer reviews. Word of mouth is still a very powerful marketing tool, especially in this business. Keep tabs on what works for other renters and customers through customer reviews and adjust to renter needs or wants, as applicable. You have to be flexible to customer needs, especially when building your reputation.

Many Airbnb entrepreneurs have found the power of social media to be one of their best marketing tools. Tweets, links to business pages, and activity within the Airbnb site itself will help generate more interest in your listings. And, as mentioned before, make sure your booking calendar is up-to-date and you’re regularly communicating with your customers. Keeping abreast of your rentals and reviews will keep you on the front line for more customers.

How to keep customers coming back

Attracting and retaining customers all has to do with the customer experience. Make your rental attractive, furnished, and as professional feeling as possible. Ask customers for opinions and ideas for making future stays more comfortable. And if there is a problem, be attentive and quick to solve it. Your reputation will be the biggest retainers for customers.

Still unsure about what kind of business you want to start? Check out the latest Small Business Trends to help inspire you.

STEP 9: Create your business website

After defining your brand and creating your logo the next step is to create a website for your business.

While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.

Here are the main reasons why you shouldn’t delay building your website:

Using our website building guides, the process will be simple and painless and shouldn’t take you any longer than 2-3 hours to complete.

Recommended: Get started today using our recommended website builder or check out our review of the Best Website Builders.

Other popular website builders are: WordPress, WIX, Weebly, Squarespace, and Shopify.

STEP 10: Set up your business phone system

Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.

There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use. Check out our review of the Best Business Phone Systems 2022 to find the best phone service for your small business.

Recommended Business Phone Service: Phone.com

Phone.com is our top choice for small business phone numbers because of all the features it offers for small businesses and it’s fair pricing.

Start a Airbnb Business in your State

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Welcome to the Startup Savants podcast, where we interview real startup founders at every stage of the entrepreneurial journey, from launch to scale.

Is this Business Right For You?

An Airbnb is a great way to add some extra income, especially if you have unused rooms or lots of space in your house. You will have guests staying in your home, so you should be comfortable talking and interacting with guests. Some homeowners, who travel often, will also rent out their homes when they are out of town. This allows them to receive income and have someone watching their home when they’re not around.

Want to know if you are cut out to be an entrepreneur?

Take our Entrepreneurship Quiz to find out!

What happens during a typical day at an airbnb business?

Airbnb businesses are very popular right now, so demand is fairly high. Once you are registered with Airbnb and have listed your space, you will begin to see requests from potential renters. Your job will be to manage the rental requests, interact with potential customers, and make your rental space as hospitable and customer ready as possible.

You want to be a good host, yet unobtrusive at the same time. By explaining much of the particulars up front, you will have given your guests much of the information they need before they arrive. Once they are staying, be available, yet respectful of the renters and rental space.

What are some skills and experiences that will help you build a successful airbnb business?

To be a successful renter of Airbnb spaces, you should be a personable individual, who is comfortable interacting with others. If you have any experience in the hotel, service, or even retail industries, the Airbnb business may be a good fit. You should also be adept at balancing your finances and resources, pertaining to the rentals. It would also prove beneficial if you were able to perform handyman services around the house, in order to make minor repairs or upgrades, without paying an outside source. Photography and writing skills will also come into play, as your description and accompanying photos will be your advertisement for your rental space.

What is the growth potential for an airbnb business?

Airbnb rentals are fairly popular currently and seem to be gaining popularity daily. Many renters have moved to Airbnb rentals over the traditional tenant/landlord situations. The profits for Airbnb rentals are larger than annual/semiannual rental agreements and the wear and tear of the space is often significantly diminished.

TRUiC’s YouTube Channel

For fun informative videos about starting a business visit the TRUiC YouTube Channel or subscribe to view later.

Take the Next Step

Find a business mentor

One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.

Having a support network in place to turn to during tough times is a major factor of success for new business owners.

Learn from other business owners

Want to learn more about starting a business from entrepreneurs themselves? Visit Startup Savant’s startup founder series to gain entrepreneurial insights, lessons, and advice from founders themselves.

Resources to Help Women in Business

There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:

If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.

What are some insider tips for jump starting an airbnb business?

Getting started in the Airbnb business is fairly easy. Managing customers is the real trick. Here are some pro tips from successful Airbnb entrepreneurs:

How and when to build a team

Much of the team for an Airbnb will be yourself and possibly a few other family members, friends, or professionals, such as plumbers or electricians. Some Airbnb renters also hire cleaning services to tidy up after a customer has vacated. If you decide to take on multiple properties, you may want to delegate a chain of command, in case you are not available or in the area. Have emergency contacts for your renters, so any problems can be solved quickly and efficiently.

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