Thinking about putting up your first listing up on Airbnb? Here are 10 things you need to think about BEFORE you start.
Do you have a lonely couch that you’d like to make a few extra bucks from? Have an extra bedroom you could rent? Or maybe you’ve heard about how much your friend is making from hosting on Airbnb and it made you want to get a dedicated unit to rent out? Regardless of what your situation or motivation, here are some important things to think about first.
1) Goal vs Expectation
Yes, we all know you want to make some money from hosting on Airbnb but what is your goal exactly? Just the occasional extra income? A reliable and consistent secondary income? Income replacement? Or build a short term rental empire? Depending on your goals, the amount of capital, time, and risk involved in hosting on Airbnb will be quite different.
A good way to evaluate your goals is to first determine what type of a host you want to be.
2) Inviting Strangers to Your Home
When you are hosting on Airbnb, you are literally inviting complete strangers into your home. And if you’re only renting part of your unit and you’ll be staying there, you are going to be spending nights with complete strangers under the same roof in your home!
If the idea of that alone makes you feel uneasy, you’ll need to think long and hard about hosting on Airbnb. If having strangers staying with you is not an option, your only Airbnb route is to find and acquire a dedicated rental unit.
Are you able to comfortably and reliably communicate with and host complete strangers?
3) Time Commitment
Listing and running a successful Airbnb listing could take MUCH more time and effort than you expected, especially in the beginning. Even when you’ve got your procedures down and you’re not spending as much time handling all the bookings, you could still expect to be on call for emergencies whenever you have a guest staying with you. Do you have the time and the flexibility to do what it takes to succeed?
4) Listing Positioning
What makes your unit special or different? Why would a potential guest want to look at your listing and book with you rather than the growing list of other good alternatives? You’ll need a compelling offer that positions your unit favourably among competition. This could include everything from the photos and descriptions on what you choose to highlight to how you go about pricing the unit. Getting the right positioning could take constant adjustments as your market and competition changes. Are you willing to put the time and energy to get your positioning right?
5) Landlord Relations
Unless you own your home, you’ll need to think carefully about how you want to approach and communicate with your landlord to host on Airbnb. Yes, some folks host on Airbnb without their landlord’s knowledge but we strongly urge you to NOT do that. Nothing kills an otherwise good Airbnb deal faster than an angry landlord. Are you ready to speak to them candidly about your short term rental intentions and to demonstrate how you will continue to one of their best tenants?
6) Neighbour Relations
Whether you own or rent, chances are you will have neighbors. How do you think they will react when (not if) they find out your hosting on Airbnb? This will vary greatly by city and neighborhood.
If your city already has many angry neighbors petitioning the council to ban or restrict Airbnb, you’ll want to extra careful before listing your unit or you could face hefty fines. Ultimately, you’ll need to decide if the potential headaches from your neighbors are worth the effort to host on Airbnb.
How would you respond to angry neighbours?
7) Risk & Liability
Outside of personal safety, you are exposing yourself to a host of other risks by hosting on Airbnb. You’re putting your property at risk of theft. You’re at risk of renting to a squatter. You’ll also risk potential liability risk if your guests get injured or if they damage other property or injure neighbours. With the proper Airbnb liability insurance coverage, you could minimize much of these risks.
8) Optimal Pricing
Pricing is NOT just setting your weekday and weekend rates and then never revisiting again. Unless you are okay with leaving profits on the table, optimal pricing takes time to get right initially, and to keep it right as you continue to host on Airbnb. Are you up for the task of constantly monitoring competitive rates and special events in order to keep your pricing optimized for profits? Or better yet, finding a trusted 3rd party pricing partner to help you? Get Airbnb Pricing Strategies.
9) Keeping Up with News & Market
As you can already tell, if you want succeed as a host on Airbnb, you’ll need to be constantly learning and adapting your listing to the changing market conditions, guest tastes, or even local law. You may have very different kinds of travelers during different seasons that require completely different positioning. Your city may be evaluating a ballot measure that could significantly affect your Airbnb listing (or shut it down). Ready to keep up?
10) Life Interruptions
With all these considerations, you can expect that hosting on Airbnb will interrupt your life in one way or another. Especially if you’re hosting just one unit and not hiring 3rd party listing manager to handle hosting for you, you’ll need to be ready to check guests in and out, do all the cleaning, restocking, and responding to guest inquires, lock outs, neighbour complaints, etc…
Being a successful host on Airbnb can and will interrupt your life, especially if you’re building a portfolio of units. Are you ready for that interruption? Are your spouse, kids, or pets ready for that?