If you are reading this article, chances are you are looking to become an Airbnb host; however, you are confused about how to start the whole Airbnb hosting process. Well, if this is you, then you are in the right place. In this post, I will walk you through all the key information you need how to become an Airbnb host in 2022.
- 1. Is Airbnb Still Profitable?
- 2. Choosing Your Business Model:
- 3. Should I Get an LLC?
- 4. Getting Your Space Ready
- i. What Do You Get?
- ii. How To Pay For Your Furniture
- iii. Make Sure The Appliances, Amenities, and Furniture Are of High-Quality
- 5. Now It’s Time To Go Ahead and List On Airbnb:
- 6. Managing Your Airbnb
So, without wasting much of your precious time, let’s get right into it:
1. Is Airbnb Still Profitable?
Before we dive into the practical tips, I will want us to address one main issue most new Airbnb hosts struggle with, and that is most people think the Airbnb market is oversaturated. Well, the truth is that the hosting market is somewhat saturated; however, it isn’t over-saturated. Therefore, if you are looking to get into the market do not let anything stop you.
So, why is it somewhat saturated?
Well, the truth is that the Airbnb business is lucrative, and as such, many homeowners just like you will want a piece of the cake. With over 5.6 million Airbnb listings, you might be wondering if you will be able to drive traffic to your listings and a potential booking, right? Well, let’s take a look at some stats:
- In 2021 alone, Airbnb had 300 million bookings, which was a 54% increase from 2020.
- During the second quarter of 2022, booking on Airbnb was up 27% (year-on-year).
- Also, the average Airbnb host in 2022 in the US makes $36,609 yearly.
- And even with an incoming recession, researchers show that the short rental market is still expected to grow by 5.73% in 2023.
So, as you can see, the market for Airbnb will keep growing, and if you are doubting if you should dabble in the industry, all I can say is that you should! However, for you to drive traffic to your listing, you must ensure that you implement the right strategies to help you succeed, and this is what this article and our overall blog are about.
2. Choosing Your Business Model:
To become a host, you need to ensure that you choose the right business model for your Airbnb business. There are three types of Airbnb business models:
- Rental Arbitrage
Let’s take a look at what each means:
I. Rental Arbitrage
You have probably heard most Airbnb hosts saying they make X amount of cash from their Airbnb business without owning a property, right? Well, the business model they are using is Rental Arbitrage. Rental arbitrage is a model where you rent out space from a landlord and then you sublet it on Airbnb. Basically, with this model, you pay the owner or management of the property a fixed amount as rent, and then you go ahead and list the property on Airbnb. So, at the end of the month, all you have to do is to pay the landlord their rent and then you keep the profit you make.
ii. Self Management
The next option is self-management; this is where you own and manage a property. With this business model, you get to control 100% of the revenue of your property.
The last option is co-hosting. Essentially, this means, someone else has the property they want to use as a short-term rental; however, they do not know how to start, manage, or how list their property on the Airbnb platform. Well, in this situation, you come in and help them manage their property for a cut of the total revenue generated from the listing.
It is important to note that each model has its pros and cons, and this article from Comfy Living dives deeper into the pros and cons of each model, which we think is important that you know to help you make a well-informed decision.
3. Should I Get an LLC?
Once you have your business model figured out, the next step is to decide if you want an LLC or not. Well, this will strongly depend on you; however, if you were to ask for our opinion, we will recommend you get an LLC for two main reasons:
I. To Protect Your Assets
By getting an LLC, you separate your personal assets from your business (your Airbnb business) assets. This provides some sort of shield in a case where a guest files a lawsuit against you. If you have an LLC and a guest sues you, they will be suing your business; however, if you do not have an LLC, the court can reach into your personal assets.
ii. For Business Credit
Another reason why getting an LLC is helpful is that you will be able to get a new credit that isn’t attached to your credit. With this new credit, you can get access to better financing options should you want to scale your business. For example, you can apply for a business line of credit or a business credit card, which has more perks.
So, yes, you should get an LLC for your Airbnb, regardless of your business model. But how do you get an LLC? Well, it is simple, visit your local secretary of state for the steps you need to take to get an LLC.
4. Getting Your Space Ready
Once you have your LLC, it is time to get to work. By now, we assume you have acquired a property, and with that, you need to get it ready. This can be an overwhelming process for most people since the majority of people think they have to get the best of the best interior decor and items to create a spectacular interior space for their guests to reside in. On the other hand, some do not even know where to start or even what items to get for their rental, but regardless of what your situation may be, do not worry; we have got you!
i. What Do You Get?
Knowing what to get to set up your space can be quite confusing for most people; however, one simple thing you can do to give a fair idea of what amenities and furniture to get is to take a quick look at other listings near you. You want to jump into the Airbnb app, and then search for properties within your vicinity to get an idea of the kind of amenities, appliances, furniture, and decor they have.
Doing this takes away all the guesswork, and gives you a clear view of what to buy and what not to buy in terms of furniture and amenities. This enables you to either make your apartment better than theirs or create a competitive interior like theirs.
Also, we recommend you take a look at apartments that are the same type as yours to give you a more narrow view of the kind of furniture and amenities to get for your apartment. In as much as you want to take a look at other properties, ensure that your property maintains its uniqueness.
That being said, Airbnb has an expansive list of some of the must-have items.
ii. How To Pay For Your Furniture
So, by now, you know the type of furniture, appliances, and amenities to get; however, the question is how do you get them? Well, this will strongly depend on your financial situation, as to whether you have enough cash on you to purchase the furniture or not. Well, regardless of your situation, we have some tips for you.
If you do not have a strong starting base of cash, then we recommend you go on Google and search for furniture or home decor stores that offer you the chance to get your interior decor items on credit. You will be surprised to find out that most home decor stores offer furniture financing options where they allow you to claim the furniture and then have you pay it back in installments over a certain period.
If you do have the cash, then we recommend you just go ahead and purchase the furniture. Do not go in for the furniture financing option if you have the money to make the purchase; this is because most furniture financing payments offer high-interest rates, and since furniture tends to lose its value with time, you do not want to make a high-interest payment and then reselling it at a lower price than you bought it.
Just like with furniture, you can go in for either a credit financing option for your appliances and amenities or purchase them upfront.
iii. Make Sure The Appliances, Amenities, and Furniture Are of High-Quality
Regardless of your financing method, ensure that the appliances or furniture you choose are of high quality. This is because you want to ensure that they last long and that you do not have to keep replacing them over and over again – which can get expensive. Buying high-quality furniture or appliances will save you from some financial stress in years to come.
Imagine having to replace your appliances and furniture every 6 months or every year due to them breaking down. You will end up spending far more than it would have cost you to get high-quality furniture or appliances. Also, when they get broken, and you are getting a new one, you will need to haul them to your apartment and get someone to set them up, which will be a whole other cost.
The thing is you’re not the one going to be using the appliances and furniture in your rental, these items are going to be used by people who might not have as much regard as you will have for the item; therefore, you want to ensure that your appliance or furniture is sturdy and robust enough to handle that.
That being, just because we said high quality doesn’t mean you need to get the most expensive furniture or item out there, no! The idea here is to ensure that you do not get the cheapest items.
5. Now It’s Time To Go Ahead and List On Airbnb:
Once you have your property set up, you can now go ahead and list it on the app; however, before you list, you need to know that Airbnb has an algorithm. And you need to ensure that you employ certain tips and tricks in your listing to make it algorithm-friendly. By doing this, you will have an upper hand over your competition since the algorithm will rank your listing higher than those whose listings aren’t optimized. So, in this section, we will teach steps to have an optimized listing.
i. Take Good Photographs
Taking great photographs of your property is non-negotiable when it comes to the Airbnb business. Most guests are going to book your rentals based on how good they look, and besides that, taking great pictures helps boost your listing’s performance. What we mean by taking good photographs is that you need to hire a professional photographer to take the pictures for you. Yes, we know the camera quality of your phone is great, but trust us; nothing beats the picture quality of a professional photographer. That being said, you can go ahead and take great pictures with your phone only if you know what you are doing.
Airbnb explicitly states on its website that listings that have professional photographs tend to get 28% more bookings, which can increase your earnings by 40%. So, you want to make sure that your photos are of the best quality possible.
Below are some tips to consider when taking good photographs:
- The first thing is to ensure that your property is squeaky clean and then every piece of furniture and amenities is in the right spot.
- The second thing is to ensure that you take the picture during the day to ensure that you get the best lighting possible from the sun.
- Ensure to include great pictures of your top amenities.
- Take pictures in landscape format to showcase the fullness of your space.
- Ensure that the resolution of your pictures is 1024pX683p.
That being said, the most important photo for every new listing is your cover photo; what this means is the first photo of your listing. Essentially, your cover photo should showcase the best view or most catching feature of your home. This can be your pool, lawn, living room, or any captivating section of your home.
ii. Optimize Your Listing Description
The next step is to take your listing description seriously, yes I know most people have descriptions, but then, not every description is well-optimized. If you can optimize your description, you will stay on top of the game. Below are a few tips which you can use to optimize your listing description:
- Ensure that the description is free from any grammatical errors and use proper spelling. This makes the listing look professional and easy for the guest to read.
- Break up your description into bullet points. Do not write one big chunk of text and expect the guests to read it, large chunks of text can be difficult and boring to read. With bullet points, your description becomes organized and the guest can easily scheme through.
- Be specific about your property: Essentially, you want to let the guest know the various amenities you have, room types, and services you offer. This makes it easy for a guest to make decisions about whether your property is ideal for them or not.
- Also, ensure that you use all 50 characters for your title. To help you articulate your property to your guest, ensure to utilize abbreviations and symbols to help you stay within the 50-character limit.
- Make use of keywords in your description. Keywords are essentially the most common phrase or words entered into search engines. So, what this means is that guests that come to search for properties input certain phrases; therefore, you want to make sure that you have those phrases in your description to help the search engine easily rank your listing when those keywords are searched.
- Do not try to oversell your property by lying, because it will surely bite you in your back since guests might leave bad reviews. Make sure to avoid including features that aren’t present in your listing when writing your description. Make sure that what you write is what the guest will see when they arrive.
iii. Your Pricing Is Important
With the above steps, you should be able to draw traffic to your site; however, once you start getting traffic, one factor that can affect a guest’s decision on your property is the pricing of your property. To figure out the best price for your property, what you want to do is to search around your area, and then find properties that are similar to yours, and then see their price, then you want to set your price to about $5 cheaper. Since you haven’t had anyone visit your property yet, you want to entice guests with your price, and then once a couple of people visit, then you can adjust it back to the average market price.
6. Managing Your Airbnb
Once you know how you are going to set up your rental, the next step is to think of how you are going to manage the property. This is what can make or break your listing no matter how good it is.
Below are some tips to help you properly manage your Airbnb listing:
I. Get The Team
Before you go ahead and publish your listing, there needs to be a team that helps you run your business efficiently; these include:
- Cleaners: These people will be responsible for cleaning before a guest arrives and after they leave.
- Lawn maintenance You do not want your lawn growing way out of control
- Handyman: They will be responsible for repairs and what have you.
- Contractors: They will be in charge of managing your supplies and whatnot.
- Pest professional: To address and curb any pest-related issues.
You must have these people on stand-by; because the last thing you will want is to have to go around searching for, say, a handyman in case of an emergency. What we recommend is that you outsource this part of the management to a company that will handle all this. There are tons of cleaning services or handyman services that will take care of your home for you. However, if you want to hire and assemble the team yourself, you can go ahead and do that.
The idea here is to ensure that you have a team that will be ready to take action whenever the need arises. Also, if you will be finding the people yourself make sure that they are people you can trust, especially if you are managing it remotely.
ii. Have Enough Supplies
After assembling your team, it is important to have enough supplies for your guest. Also, ensure that you save any excess supply within the rental property for easy access in case of an emergency.
iii. Automate Your Airbnb
Regardless of the Airbnb business model you go with, having an Airbnb and being a host comes with other responsibilities such as replying to the messages of guests, checking guests in, changing your pricing, and whatnot; whiles you can manually do this yourself, we highly recommend that you automate most of these processes. We have an article on how you can automate your Airbnb business, therefore, we recommend you check that out.
Automating your whole Airbnb process should save you tons of time and stress, and trust me you will appreciate it if you do.
iv. Encourage Reviews
Another part of the Airbnb management process is to encourage your guests to leave you a review and a rating. This helps boost your ranking on search queries. The better your rating, the higher the algorithm will rank you in search queries. Not only that but then having a good review and a good rating lets guests know you are a good host, increasing the likelihood of them booking your property.
One way to do this is to ensure that you give your guest a good stay, then when they are about to check out, send them a quick message thanking them and then telling them to leave you a good review.
Also, should in case a guest leaves a bad review, ensure to reply to the review.
With so much fluff on the internet, we hope these steps have given you insight into the Airbnb hosting space, and you should be able to start your Airbnb hosting journey without any hassle.