Airbnb is a fantastic business opportunity for people who want to enter the hospitality industry on a smaller and more personal scale. But before you launch your business, there are several requirements to consider.
Being an Airbnb owner does not mean you sit back and collect passive income. Whether you’re considering a vacation rental or hope to attract business travelers, Airbnb management is a serious business. What do you need to know about starting an Airbnb the right way so you can enjoy long term success?
Airbnb Basic Requirements
Besides having the space and all the essentials to make it guest ready, you need to meet the basic requirements set by Airbnb. These are set to ensure that guests have a comfortable stay and have their basic needs and expectations met regarding their lodging. For instance:
- Be responsive and reply to booking inquiries and reservation requests within 24 hours.
- Accept reservation requests when a property is available.
- Avoid cancellations at all costs because guests rely on the reservations they’ve made and cancelations can throw an entire trip off course.
- Maintain a high overall rating and consistent level of quality, regardless of the location of the Airbnb property.
- Providing essential amenities, including toilet paper, towels, linens, pillows, and soap is not required but is strongly encouraged by Airbnb.
If a listing consistently has problems and falls below the average rating, Airbnb hosts could face penalties.
Airbnb Legal Requirements
It’s also important to know and understand the laws in your city that apply to the operation of an Airbnb.
Some cities restrict property owners from hosting paying guests for short periods in their zoning or administrative codes. In other cities, you must register, get a permit, or obtain a license before listing with Airbnb. Every location is different and the restrictions and penalties for violating these restrictions vary as well.
Airbnb is trying to clarify these rules for hosts but has yet to create a consistent clearinghouse for the rules because they are so different and tend to be confusing.
It’s important for all Airbnb hosts to review their local laws before listing a property for rent on Airbnb.
Airbnb Business Requirements
Owning and operating an Airbnb is a business opportunity and should be treated as such. Like any smart business endeavor, you should invest time in market research before moving forward with your plans.
Understanding the short term rental market in general and your local markets is essential to your success. Not all markets are created equal so you might have similar properties in various markets and find that you need to treat them differently.
There’s a decent amount of math involved to calculate how you can make a profit but it’s also important to determine whether or not it’s possible to accomplish this at all in a given market and with a given property. Crunching these numbers before starting an Airbnb business is essential. It can also help you decide whether to expand your business and determine how to scale.
Once you have a general idea of what you can charge for your rental and whether it’s enough to sustain your business, you can move on to the next phase of market research. There are several things to consider when you’re trying to figure out how to start an Airbnb business.
What are the barriers to entry?
You might have a property available in an area that is appealing to travelers and can charge a rate that will make you a profit. So, how will you make your rental stand out among the others listed in the area? Charging the lowest rate might seem like the most obvious answer but it’s rarely the best.
Instead, create a description of your ideal renter and design your marketing around targeting them. Who is most likely to rent from you? Who do you want to rent from you? How are you going to make your Airbnb rental as appealing as possible to them?
Airbnb Logistical Requirements
Your responsibilities vary based on whether you are the property owner or renter as well as what’s required of you in your area. Do you need a business license? Do you need to worry about neighbors or a property manager? Are permits needed to make upgrades or changes to the property? All of these things require time, effort, and financial investment but are an important part of how to start an Airbnb.
Keep in mind, you’ll eventually have the opportunity to automate some of your workload once your Airbnb is up and running but getting the business off the ground is a full-time commitment.
Launching Your Airbnb Business
Once you’ve done the market research and are fully committed to operating an Airbnb, you can get started with the next phase of the process. These steps help you perfect your listing and attract your ideal guests, allowing you to automate some of the steps in the process.
Let’s start with your Airbnb listing.
Showcase your property online to potential guests and make it as appealing as possible. This requires two things: making the space inviting both in pictures and for your guests when they arrive and making sure the photos you share convey how inviting the property is. If you don’t have the skills yourself, working with a professional interior designer and photographer can go a long way to helping you market your new business.
Once you’ve created the perfect listing and are being contacted about the property, find ways to make the process of renting from you as streamlined as possible.
There are several tools and resources available to help you with this, including:
- Pre-check in templates
- Lock boxes
- Access to an all-purpose handyman for emergencies and maintenance
- Housecleaning services
- Landscaping services
The better you plan for the challenges of operating an Airbnb business, the more likely you are to be successful as an Airbnb host.
Photo by Filios Sazeides on Unsplash