How to run a Profitable Airbnb Business

Most of us have heard of or used Airbnb, the online property rental marketplace which lets people rent out their properties or spare rooms to guests.

Airbnb began in 2007 and has rapidly grown to include listings for over 7 million available properties in more than 100,000 cities around the world. If you have available rental space and are looking for extra income here is how to start a profitable Airbnb business.

How to start hosting

The first step is to become an Airbnb host and register your property by submitting photos and descriptions of the space for rent. Once a property is listed with Airbnb it can be viewed by travellers looking for accommodation in your area. Guests can search the Airbnb listings using a variety of criteria such as:

  • destination
  • dates of availability
  • price
  • number of rooms, bedrooms, and bathrooms
  • amenities such as breakfast, hot tub, pets allowed, etc.
  • facilities such as parking, WIFI, washing machine

Before booking a chosen accommodation through Airbnb the guest can contact the host directly for further information via the Airbnb messaging service.

Security

For security purposes, hosts must provide acceptable identification to Airbnb. To build a trusted community, travellers can post reviews of accommodations (and hosts can review guests). Reviews are not anonymous.

Guest Services

For guest peace of mind, Airbnb provides a secure payment platform and payments to hosts are withheld for about 24 hours after guest check-in time. The time it takes for the funds to arrive in your account depends on your payout method. Airbnb has a 24-hour guest hotline in case any issues are encountered during the rental period.

Fees

The host sets the price for the lodging and Airbnb charges the following fees:

  • Host: 3 percent fee, which will be taken out of the reservation total.
  • Guest: This fee ranges up to 20% of the booking subtotal (the nightly rate plus cleaning fee and additional guest fee, if applicable, but excluding Airbnb fees and taxes).

Hosts may ask for a security deposit and may also charge a cleaning fee.

Travellers Prefer Airbnb Rentals

One of the great things about running an Airbnb business is that travellers prefer Airbnb to hotels:

  1. Cost: An Airbnb rental is typically much cheaper than a comparable hotel room. Depending on the location, in some cases, an entire house can be rented via Airbnb for the cost of a single hotel suite.
  2. Living Locally: According to statistics one of the main attractions of an Airbnb stay is to “live like a local”. Rather than renting a generic hotel room, most Airbnb guests prefer to stay in a neighbourhood and experience the destination the way locals do.
  3. Privacy: Airbnb users are not constantly surrounded by hotel guests and staff.
  4. Peace and Quiet: Airbnb rentals are typically more secluded and don’t suffer from noisy hotel activity such as early morning guest departures, maid service, young children, and traffic.
  5. See What You Are Getting in Advance: Unlike a hotel where at best you may see an image of a similar room on their website with Airbnb you get detailed photos and descriptions of the actual premises.
  6. Diversity: Airbnb has an enormous diversity of available accommodations, from boathouses and yachts to lighthouses and castles.
  7. The Comforts of Home: Rather than generic hotel rooms Airbnb listings have the homey feel of an actual living space (some even have resident pets). Kitchens allow guests who wish to save money on dining out or have dietary problems to prepare their own food.
  8. Space for Family or Friends: With Airbnb, you can save a lot of money by renting an entire house/apartment/condo for family and friends rather than multiple hotel rooms.

Is Renting Your Space Permissible or Advisable?

Before you decide to start an Airbnb business, make sure you are legally allowed to become an Airbnb host in your jurisdiction, and you are prepared to follow local laws and regulations!

Some cities in the UK have specific rules. These are worth checking if you live in London, Glasgow, Northern Ireland, Isle of Man, Guernsey or Jersey.

Relations with the neighbours are also a major consideration. A few noisy or inconsiderate Airbnb guests can quickly turn you into an outsider in the neighbourhood. Assuming none of these issues are insurmountable, becoming an Airbnb host can be a great home-based business opportunity.

Listing and Pricing Your Property on Airbnb

Describe your space accurately but make it stand out. Remember that Airbnb is an online marketplace and in order to maximize guest interest in your property you need to think like an estate agent and make your listing stand out from the rest.

Start by researching similar Airbnb listings in your area and note the listed features/amenities and prices. (Make a spreadsheet if this helps.)

Your listing description must be accurate, detailed, complete, and emphasize what makes it unique and different from others in your area. Thoroughly outline the amenities and features of your space as well as any rules or expectations of guests.

It is really important to provide high-quality images of your space.

Remember that your guest rankings will be partly based on the accuracy of your listing description—you do not want guests to be disappointed because the space is not as described, or you have exaggerated the amenities.

Price Your Listing Competitively

Your research of similar listings should also give you an idea of how to price your listing. To keep your property continuously booked (and maximize profits) it must be competitively priced.

Improving Your Host Ranking

Airbnb rankings are like internet search rankings – the higher your property appears in the rankings the more likely it is to be selected by guests, so getting high Airbnb rankings is key to the success of your Airbnb business. You can improve your rankings by building trust and providing a great experience for your guests.

Building Trust

The Airbnb community is built on trust, so guests will be looking for hosts that have verified contact information, references, and positive reviews.

Provide Great Customer Service

As any good business owner will tell you, customer service is the backbone of any successful business and being an Airbnb host is no different. Airbnb hosts who provide the best guest experience are rewarded with great reviews, higher search rankings, and more bookings. The most successful hosts are:

  • Reactive: Hosts who can’t be bothered to respond to inquiries in a timely fashion (or at all) are a major turnoff to guests. In fact, Airbnb keeps track of your responses to guests and rates them accordingly. Hosts who have the best response ratings are rewarded with higher search rankings and increased bookings. The Airbnb mobile app can help keep you connected at all times.
  • Update your Calendars: As well as improving the guest experience, keeping your calendar updated improves your Airbnb search rankings.
  • Fix Problems quickly: When a guest reports a problem such as a leaky tap get it fixed right away and apologize to the guest. Providing five-star service is a sure way to improve your guest rankings.
  • Act on Reviews: If a guest posts a negative review correct the problem and learn from your mistakes. Respond to complaints in a manner at all times.

Wish Lists

The Airbnb wish list facility allows you to keep track of your favourite listings and share them with fellow travellers. Being added to as many wish lists as possible will improve your Airbnb search rankings. You can ask guests to add you to their wish lists.

Be aware you may be starting a new career as a laundry person and cleaner or, as it is sometimes known, being an Airbnb host. The upside is that you will be making extra money for a little bit of inconvenience and a lot of ironing and meet loads of interesting new people all the time. And if it all gets too much, you can just close down the listing and put it down to experience.