Many landlords have been making a bit of extra cash by renting out their properties for short term rentals. Most of these rentals are for holiday goers as well as business folks. Generally this business plan seems just fine, but one needs to consider the risks and rewards of an Airbnb business.
What does it mean to have some stranger live in your personal space
The idea of renting out your personal space when not using it was the start to Airbnb. The basic idea is brilliant, making some extra cash on the side, while being a guest in a fully furnished, functional property. Generally there seems to be few things that can go wrong, but what does it actually mean to have a stranger in your personal space, unsupervised….
A major concern is things like theft and damages. The damages comes with any form of hospitality, it’s an Achilles heel of the hospitality industry. Luckily Airbnb provides for this possible problem by charging a deposit, thus the problem is solved;) But what about theft and privacy matters.
Theft and privacy is not that much of a concern for those properties that are dedicated holiday homes, but not so much for those personally used properties. A suggestion is that these landlords needs to lock up their personal belongings. You will need to go through your apartment and take anything and everything away that has sentimental value. The second removal will be that of your identity. Make double sure that there aren’t any documentation laying around with your identity to be stolen. Identity theft is a real crime all over the world, prepare to be prepared for these criminals.
Airbnb and services like them can result into a profitable business, especially if done on the side. They however have risks and its dependent on you and your property if the risk reward scenario is worth it.
Before you scream ‘yes, yes it’s worth it’, consider these general hospitality issues.
1.Logistical nightmares:
One problem many Airbnb landlords have is the problem of getting the keys to their guest – the check-in process. This is especially difficult if you are managing your Airbnb remotely. Many would suggest to give the keys to the neighbour, or to use a lockbox system or to make use of the cleaning lady you would need. All of these have been tried and tested, but it remains a concern if not a problem. However times are improving and electronic lock advancements have led us to the generation of wifi locks or smart door locks.
These smart locks use your cellphone as the key. You can set your lock to ‘invite’ a guest for a period of time (allowing in) and uninvite (lock out) once their stay is over. These new smart locks aren’t worldwide available yet, but hopefully soon they will be.
2.Bad reviews can be murder:
Currently many of these service related sites work on the basis of peer to peer reviews. In most cases I love the peer to peer review system. It forces honestly from both sides, but it can also lead to unfair treatment easily. Many landlords wouldn’t give any guest a bad review in fear of receiving a bad review in return. This is a problem with our reviewing system world wide at the moment. I ask that some genius improves our system so that more honestly can be translated;)
3.It takes some work, it’s not so passive after all
As with any business there will be better and worse clients. Some take no time, no effort, no problems…but others just don’t. It is for these guests that you will have to be calm, patient and respond in a timely manner. Keeping strong communications with your guest throughout their stay will be the best policy.
Have some quick check-in messages on standby:
- “Any problems checking in last night?”
- “Enjoy the city today”
- “Remember to give Joe’s a try, the best breakfast in the hood”
By checking in regularly you will be guaranteed an excellent communications rating. You will ensure your guest felt taken care of. You will be aware of any and all problems immediately. There are only benefits for the bit of work related.
4.Be realistic with your time management.
Many new Airbnb host makes the mistake of having check-ins and check-outs clashing with each other. Ensure your guest have left well before your new arrivals. Make sure you allow yourself or your cleaning lady time to prepare for the new arrivals.
A nice rule of thumb is to have check-out at noon and check-in around 3pm. This will give you three hours to tidy up the place. Another good idea would be to have a few sets of linen. This will just make everything so much easier if you don’t have to wash and dry the laundry in three hours. It will also allow a backup for your guest.
You are allowed to ask a cleaning fee, disregarding the length of their stay.
Getting a quick start to Airbnb
Your Rental Rate
It is recommended that you should consider lowering your prices in the beginning, seeing as you will have no to few reviews. This make people reluctant to stay at your accommodation. Lower your rate until you have a few good reviews and slowly increase the rate until you find your happy medium with your occupancy rate and income generated will guarantee an easier start.
Depending on your location you should consider making use of the extra services Airbnb offers, like the professional photographer. Research has shown that professional looking images can result to 10 times more inquiries.
Your Description
It is important that your guest know exactly what they are getting themselves into. It is much better to have a tad few tenants at the start, but all of them are super happy with their stay. As Airbnb has to do with foreigners you need to ensure they feel comfortable with their stay. It is for this reason best that you make sure your description is detailed, fully completed and list all the benefits and possible negatives of your property and location.
Honesty is the best policy!
The Actual Cost
Some numbers to keep in mind:
- Average rate for your property type and area
- Hosting Cost:
- Cleaning
- Higher Utilities Bill
- Taxes
- Airbnb host fee (3%)
I hope these few advice points will be of help with your new Airbnb business. Consider the risks and the rewards, be safe and make sure you remain legal.
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