How To Start an Airbnb Business
Airbnb, Vrbo, or Homes For Sale Bluffton SC accommodations are becoming increasingly popular among travelers looking for more personal and unique accommodations than they would find at a hotel or motel. Sometimes Airbnb accommodations have better amenities and a much better price than some hotels.
There is no maximum length of stay for guests at an Airbnb rental, but most visits last one or two days though up to two weeks. Many people think that having their own Airbnb business could be very profitable. In some cases, that’s correct, in others, it isn’t. Some people think owning an Airbnb business will be easy. That could also be true or untrue based on different circumstances. Check out this article to learn how to start an Airbnb business and whether it’s right for you.
How to Start an Airbnb Business Step-by-step
Airbnb is a fantastic place for you to earn extra income by renting out your home. It’s the easiest way to list, find, and rent unique places, and, as a homeowner, to host people who come from all over the world.
With Airbnb, you can leverage a multi-million dollar community-based economy to help you make the space you have available a profitable asset.
Airbnb is a great business that isn’t bound by time or size. Have a spare room in your house or have a house with extra rooms? Renting a room or the entire home on Airbnb can help you cover some of your mortgage costs or even make a profit.
Let’s look at the individual steps.
Before starting an Airbnb business you need to establish a budget.
Regarding budgeting, when you’re planning on buying a property for starting an Airbnb business, it’s important to remember that the costs go beyond the purchase price. To rent out a room or your home on Airbnb you’ll need to have the place equipped with everything people need; they only come with their luggage.
Therefore, you need to factor in the furniture, linens, TVs, AC and heat, kitchen appliances and supplies, towels, toilet paper, etc.
The best hosts on Airbnb are called “Superhosts.” Those are the ones that go above and beyond for their guests to make their experience impeccable. They have received positive feedback and ratings from their guests earning that positive reputation. Usually superhosts include other things, such as shampoo, soap, or even snacks or a bottle of champagne as a welcome gift.
The happier your guests are, the more likely you’d be to rent out the place to future guests.
Choose a Rental Market
There are two types of travelers: those looking to stay near local attractions and those looking for business opportunities.
Which type of customer are you seeking? You need to decide if you prefer to market your property to corporate travelers or families who want to be close to an amusement park or other attraction.
Decide the Name of Your New Airbnb Host Business
Naming your new Airbnb is important in marketing your vacation rental. You want a name to describe the location and add a personal touch.
Consider naming it “Patrick’s Mountain Cottage or “Michelle’s Beach Retreat.” This will let happy customers tell their friends about the great experience they had renting your Airbnb. You will see an increase in bookings.
Establish Your Legal Status
Business structures include sole proprietorships, partnerships, limited liability companies (LLCs) and corporations for your Airbnb business. You won’t be personally liable for any lawsuits.
File Your Taxes
Owning real estate comes with a few different types of taxes that you’ll be responsible for paying.
There’s real estate tax, the local occupancy tax, and sales tax.
Airbnb can collect the hotel tax on your behalf, so you don’t have to worry about it. As for the other taxes, you’ll need to keep careful records of expenses to file your taxes at the end of the year.
Filing taxes can be long and tedious, but if you have your expenses and receipts organized, it’ll be a lot easier. Keep in mind that if you have any repair or replacement costs for furniture, linens, towels, or kitchen supplies, you’ll also need to keep track of these.
Find a Location that Works for You
Potential guests want to feel like they’re getting away when they book an Airbnb rental. That means having their peace, as well as easy access to parking and the property entrance.
For a successful Airbnb rental, it’s essential to consider the area where you will have the listing. Is it a safe area? Are there any nearby attractions or restaurants? Is it close to public transportation?
We suggest you analyze different areas to determine the demand for Airbnb rentals. You’ll be more successful if your Airbnb is in a hot spot where many travelers wish to stay.
Obtain Permission if Necessary
Most of the time, Airbnb businesses need permission from the city for short term rentals (28 days or less).
To avoid any issues, make sure to get a business license that will let you operate your rental legally. To that end, visit your local city, county, or town clerk’s office.
Also, remember to register your small business with the appropriate county agency collecting hotel taxes. All this will help you to run your Airbnb without any problems.
Set Up a Bank Account for Your Company
One way to protect your assets is to use dedicated business banking and credit accounts. That way if someone sues your business, your home, car, and other valuables are less at risk of being seized. (You can also protect yourself with an LLC, but it’s vital to still have a separate bank account for your business.)
The technique’s name is “pinning down your corporate veil.” You’ll receive a 1099-k form in the mail if you make more than $20,000 a year from Airbnb rentals or conduct more than 200 transactions through the Airbnb site.
Having separate business bank accounts makes it easier to keep track of all the expenses for tax purposes.
Get a Business Insurance Policy
Homeowners insurance is a must. But no worries, Airbnb provides a $1 million insurance policy to cover damages if the need arises.
You’ll also need to get general liability and property casualty business insurance.
Worker’s compensation insurance will be necessary if you’re planning on hiring someone to help clean the property.
Browse the Market for Properties
Before listing your rental on Airbnb, it’s essential to do your research if you wish to stand out from the competition. Check out what other hosts in your area offer in terms of amenities and price.
You may be able to charge a little less per night than them, and remember that when you’re starting, you may want your rental rate to be a bit lower until you reach superhost status.
Before you list the property, list any improvements it might need. How much will these upgrades cost if you want to make your rental more attractive to guests?
Set Your Airbnb Listing
To make your property stand out you’ll need high-quality photos that showcase its best features. A professional photographer will be able to capture the essence of your property and make it look its best.
The house has to be perfectly clean and organized before taking the pictures. Remember, this is the first impression people will get when they’re searching for a place to stay.
In addition to photos, include information about amenities and guest accommodations. Describe how many bedrooms and bathrooms the property has, how many guests you expect to stay at the rental, and if you will allow additional guests. By providing potential renters with the information they need, you’ll make it easier to decide if your property is the right fit for their needs.
Now that You Know How to Start an Airbnb Business…
If you’re looking for a way to bring in some extra money, remember Airbnb is a great option, especially if you have unused rooms or lots of space in your house.
You’ll have guests staying at your home, so it’s important to talk and interact with them.
Some homeowners who travel often will also rent their homes when they’re out of town. This allows them to receive income and have someone watching their home while away.
On that note, being responsive is one of the most important traits for hosts to maintain a successful Airbnb business. Customers want an immediate response from hosts. This also affects the rating they will give you at the end. Remember, that even one negative review can be harmful to your business.
Dealing with minor issues quickly is essential in any house, the same goes for renting out space on Airbnb.
You’ll be successful if you’re responsive to customers and available without being too invasive.
Starting a home 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.
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.