You’ve no doubt read the many articles that exist on the internet proclaiming to the world that you can get rich renting out your spare bedroom, your basement or your camping trailer on Airbnb. Have you considered doing this?
It’s true that it’s a great way to make money and it’s also a lot of fun but is it right for you? Here are a few questions to ask yourself before you start dreaming of the wealth and riches to come.
Is it legal in your home and / or area?
Some areas simply do not allow STRs (short-term rentals). Yes, there are some hosts who think that they can get away with it and find that they are suddenly presented with huge fines from their city or county.
If you’re renting your house or apartment, you’ll find it very unlikely that your landlord will agree to you renting on a short-term basis. He or she has all the liability and none of the returns. If your landlord does agree, then be sure you have this in writing. We have heard many stories of tenants who have been evicted because they have broken their leases by subletting rooms.
Does your homeowners’ association or condo board approve? Even if your city allows STRs, your HOA or condo board may not. They have immense powers and you agreed to their terms when you bought the property so again, you could find yourself having to pay huge fines if STRs are against their regulations.
Have you checked the situation regarding local taxes and licences?
Depending on where you’re located, you might be responsible for collecting and submitting TOT (Transient Occupancy Tax). Your Airbnb business might also need a licence.
If you’re planning to provide breakfast for your guests, be aware that in some areas you’d need a professional, commercial-grade kitchen in order to do so.
Remember too that your income needs to be declared when you are filing your taxes.
Did you do your homework properly regarding costs?
Sometimes new hosts fail to take into account some of the costs associated with running an Airbnb business. For example – increased insurance premiums, extra utility bills, wear and tear of your property, furniture and equipment, licences & taxes, bank or Paypal fees … and more.
Repairs and replacements can cost you more than you might think. The extra strain on your plumbing and electrical facilities might mean that you have to call out specialists more often. It’s very rare for guests to actually steal anything from you (but you still need good insurance that covers STRs) but glasses will get broken accidentally, bedding and towels may get stained and rendered unusable.
Laundry often costs more than potential hosts estimate. Laundry services can be expensive and doing the laundry yourself can drain your finances too. Airbnb guests (and Airbnb itself) demand perfectly clean homes so again, even if you are doing the cleaning yourself, you may need to buy new equipment and will certainly spend a considerable extra amount on cleaning products.
Do you have a plan for emergencies?
They will happen. An emergency may be relatively minor – a guest has just checked out, another is checking in in a few hours and you find that the toilet is stopped up – do you have an emergency plumber who can come at short notice? An electrician? A handyman?
Do you have a plan for what you’ll do if a guest is taken ill when staying with you? Do you have a strategy for appeasing a dissatisfied guest? What will you do if the TV stops working or the city cuts off the water for maintenance work? Even the wifi going down is seen as an emergency by many guests.
What if you are ill or there’s some family emergency that means you can’t meet-and-greet new guests? Do you have a reliable backup person in place? What will you do if your incoming guest messages you and says that their flight has been delayed and they’ll be arriving at 3 am? What are your plans if your neighbours complain about your guests?
Have you factored in your own time?
Running an Airbnb rental can take up a lot of your time. Before you even have a guest, you’ll have invested a great deal of time into making sure that the rental is perfect and stocking it correctly. Then creating your listing should take time – plus tweaking it and getting it exactly right.
Once your listing is in place and your business is running, you’ll spend time every day answering queries from potential guests, plus you’ll have to deal with the guests who are currently staying with you. Add to this the time you’ll spend updating your calendar, adding or subtracting photographs, dealing with your suppliers and tradesmen, shopping or ordering supplies online, writing reviews … the list goes on.
Hosting can be great fun. But it can also be hard work and may not be as profitable as it first appears. But get everything in order before you start and you’ll have a great chance of success 🙂
JJ is originally from the UK and has lived in South Florida since 1994. She is the founder and editor of JAQUO Magazine. You can connect with her using the social media icons below.