The vacation rental industry is growing exponentially. A greater number of people are choosing to stay at rental homes during vacations than in hotels. Businesses and individuals are starting up as the popularity of the industry increases. Different websites are available for vacation rental owners to market their properties. Airbnb is the leader of the industry, it is estimated that hosts have earned more than 110 billion through its platform. Below are the first simple steps to help get you rolling with your first property.
Starting an Airbnb business can be very rewarding, but also can take a lot of time and money. Decide for yourself how much time and money you want to put into it. Running an Airbnb has higher operating costs than traditional long-term rentals do. Make sure you do your research on how much it will actually cost to operate your vacation rental.
When starting in real estate investing it is always important to leave a cash reserve. Having a cash reserve can help you prepare if an emergency happens. Unexpected repairs of your property can be detrimental if you have no reserve.
Always make sure you are prepared financially and that you are able to cover the costs of running an investment property. With risk there is reward and many people have been able to start and run very successful Airbnb businesses.
Once you decide what your budget is, figure out what makes the most sense financially for you. Everyone’s financial situation is different so here are a few different ways to get started.
Owning a property is going to require a lot of money upfront in order to put down a down payment on a mortgage. Not only that, but you will need to furnish and decorate the property thoroughly. This is a safe and secure way to ensure that you maintain full control over the property.
Rental arbitrage has become a popular business model among many young hosts. This allows you to start an Airbnb without owning a house. This is the process of renting a house or property from a landlord and then listing it on Airbnb with the landlord’s permission. This can be a good way to get started but make sure you do plenty of research on any legal complexities in your area.
Co-hosting is going to be the cheapest way to get started in an Airbnb business. You will essentially take on the responsibilities of running the property for the owner. The extent of your responsibilities will depend on the owner and what they want you to be doing for them. How much responsibility you take on can determine how much money you will make, percentages range anywhere from 10-30% of revenue.
There are many things you need to be researching when looking for a good location. Once you decide what area would work best for you, look at the performance of the property or area you may be interested in. AirDNA is a great resource for discovering real data about an area, with data ranging from average daily rate, occupancy rates, average revenue, number of rooms, amenities available, and much more. All of this information will help you determine how you stay competitive and have a good return on your investment.
After doing your research on the area you want to start your Airbnb. It is extremely important that you do ample research on laws and regulations for running vacation rentals. The increasing popularity of vacation home-sharing has caused many cities to make it illegal or have strict regulations on it in an effort to protect the local population.
You will need to make sure that you find a place where renting an entire property with the absence of the owner is allowed. This is referred to as a non-owner-occupied short-term rental. You don’t want to put your money into a property only to find out that you are not able to legally run it.
If this is something that you are not aware of, a good starting point to understand the difference would be looking at Florida that generally has less severe Airbnb laws compared to California that generally has more strict laws.
Creating an LLC is something that is very easy, and is a step you shouldn’t skip if you plan to scale your business. There are a few reasons that you should consider creating an LLC.
It also may be possible to get a business loan which can help you be able to get started when you may not have all the capital immediately ready.
Now that you have done plenty of research and know exactly what area you are going to be going into, it is time to find your property. If you have a lot of experience in real estate then you will probably be able to just find the right property on your own by analysis and using tools such as AirDNA to predict your annual revenue.
If you do not have any experience in real estate then it may be beneficial to hire a real estate agent to help you. The agent can help in price negotiation and closing the deal very quickly. In the U.S. market, the majority of the fees are paid for by the seller. Additionally, It is possible to negotiate with the seller so that they take on all the fees.
Once you have secured the property, it is time to fix any issues that there may be with the property. When you were doing the home inspection before buying the property, you should have gained a solid idea of issues and repairs that needed to be done before it is ready to be a rentable space.
In addition to making sure that your property is in good condition, be sure you budget enough money to have nice furniture and amenities. This can help raise your average daily rate. At the same time, it is important that you don’t overdo it in dumping money into things that are not going to give you a return on your investment.
Although vacation rentals are often referred to as Airbnb’s, there are a handful of other websites that you can list on. The booking sites with the highest traffic in the US are Airbnb and Vrbo. Each has its own benefits of listing on. By using a PM software like Lodgable to list on both, you can help increase the demand for your place. This will drive higher occupancy and rates resulting in higher revenue.
Creating a high-quality listing can be one of the most important steps in getting bookings. Getting more bookings is how you will make the most money so knowing what draws guests to listing is essential.
High-quality photos are one of the top things guests look at and attract people to your property. Taking professional photos can be one of the best investments you can make. Airbnb will place you higher on the queue if you ensure you took the time to have professional photos taken. Lodgable has cracked the code to list higher on Airbnb’s search in your area. Talk to one of our listing optimization experts to learn how.
Many new hosts too often make the mistake of cleaning their properties themselves. While this can be helpful and save money, many hosts have discovered that it quickly becomes too much to handle. That is why hiring a professional cleaner can be extremely helpful. It will free up your most valuable asset, your time. The traveler pays for all cleaning expenses so you don’t have to worry about losing revenue. To ensure that your cleaner does exactly what you want, create a cleaning checklist.
There are many strategies to get started as an Airbnb business. This can be a very profitable business, but it also takes careful research and planning to ensure success. Getting property management software can be very helpful if you are looking to expand your business. Lodgable offers all the tools you need to be successful. We work closely with you to help you grow your business to help you succeed.