Anyone who owns a home in 2018 has wondered whether it's worth the time and effort (and upfront expenses) to list all or part of their home on Airbnb -- and no wonder. The short-term rental platform has exploded in the public consciousness, and many homeowners are earning thousands of dollars every year that they use to improve their living spaces or to help pay off their mortgage.
But there's a lot you need to do to get your house Airbnb-ready, so that it's attractive for renters and a lucrative experience for you. And there's a lot you need to consider about how to behave and manage your short-term rental listing once it's live, so that you get good reviews and can keep a steady stream of guests coming through the door. Here are 25 things you'll want to do both before and after your listing is live on Airbnb.
Learn about occupancy requirements in your community
Most cities and counties don't have restrictions around short-term rentals once you own the house in question, but there are areas that have strict rules about whether you need to live in the place as your primary residence, how often you can rent the home, and how long guests can stay, among other parameters. And some have banned short-term rentals entirely. To make sure you don't inadvertently break the law and wind up with a big headache on your hands (like a fine or even a court case), do your due diligence and look into any restrictions that your community has implemented around short-term rentals.
Obtain any necessary permits
These won't be necessary in many areas, but some communities want to keep tabs on who's renting homes on a short-term basis, so you may have to secure a permit in order to legally rent your home out on Airbnb. This is something you'll be able to figure out after you've looked into the occupancy requirements where you live; be prepared to fork over some cash for the privilege of a permit, and know when it expires so you can plan to get a new one if you like hosting and want to keep doing it after the permit is no longer valid.
Check with your HOA or co-op
The city and county aren't the only obstacles to renting your place on Airbnb. If you live in an area with a homeowners association (HOA) or your home is a condo with a co-op, then there are additional authorities who have a say about whether you can rent your home and how long guests can stay, among other rules. If this hasn't yet come up with your HOA or co-op, you've got a choice about how to proceed -- maybe you want to bring it up and get their blessing ahead of time, or perhaps you'd rather move forward with your plan to host and ask for forgiveness instead of permission, depending on who's on those boards and how open they usually are to new ideas.
Decide how much of your property to rent and when to rent it
Once you've done all your due diligence to make sure that you are allowed to rent your home on Airbnb and you understand any hoops you might need to jump through or red tape you might need to clear, it's time to make another decision: How much of your home do you want to rent, and when will you make it available for rent?
Airbnb offers several choices; if you have a mother-in-law unit or a walk-out basement, then you might consider turning those areas into full-time rental spaces. Or maybe a spare bedroom might make a good opportunity for a year-round rental on Airbnb -- keep in mind you may have to share a bathroom and will probably face sharing common areas (like your kitchen, living room, and parking facilities) with strangers if this is your best choice. You can also choose to rent out your entire home and vacate the premises while guests are there.
You'll also need to decide when to rent your home and how to manage that process. If you're leaving so that guests can have access to the entire house, where are you going to stay, and how much money will that cost? Do you have pets that will need to be brought with you or boarded while guests have the run of the house? If you're renting a portion of your home or a separate area, you'll still need to ask yourself whether you want to make it available to guests when you yourself won't be there (traveling for work or on vacation, for example).
One last thing to consider: If you are renting your entire home on Airbnb for more than a certain number of days per year, your lender may need to reclassify your house as an investment property instead of as a primary residence, and there are tax and insurance implications to this -- so check your lender's policies about short-term rentals before you find your property recategorized.
Complete as many upgrades as possible
Just like anything else you might rent, you can charge a premium for nicer, more private spaces. So if you have a basement that has a bedroom and bathroom and a separate entrance, maybe adding a kitchenette and some living-room furniture would be a good investment. At the very least, you'll want to make sure that any areas of the house where guests will have access are as updated as possible and in good working order -- no clogged sinks or showers, working heat or air conditioning, maybe even some fresh paint and new window dressings, and a functioning kitchen that's stocked with at least the basics that guests will need to feel comfortable and at home.
Do you need security?
This might not be a huge consideration if the living area you're renting is relatively separate, but you'll nonetheless want to think about any valuables that you don't want guests finding and spiriting away before you invite them into your home. It does happen! Some Airbnb hosts lock their bedroom doors or will put everything valuable into one closet and lock it, but interior doors and locks are a lot flimsier than exterior doors and locks, and there is a possibility that a motivated guest could break through that lock. You might want to invest in a safe or even move your most valuable possessions off-site to a secure location before you open your house up on Airbnb.
Make sure your homeowners' insurance covers short-term rentals
Talk to your insurance agent about what your homeowners' insurance does and does not cover before you make your listing live. If someone does walk off with one of your valuables and it's not covered under your insurance, that's something you'll want to know upfront; ditto if something happens to your house that needs to be repaired. Be clear about which areas of your house will be available for rent and how often. It's possible you might need to pay for an upgraded policy.
Don't count on Airbnb income when refinancing a loan
With interest rates rising, you may not be interested in refinancing your mortgage loan right now, but many Airbnb hosts decide to look into a home equity loan or home equity line of credit (HELOC) for home improvements once they've been renting for a few months and have specific upgrades in mind they'd like to make sooner rather than later.
Depending on your lender and the loan, you might not be able to include the income you make on Airbnb when you're listing income on the loan paperwork, and that's going to affect the amount of money you can get on your loan and possibly the interest rate on the loan, too.
Read and commit to the hosting standards
The last thing you want is to spend your time, energy, and money on working toward becoming an Airbnb host and then breaking rules early on and getting blacklisted from the platform. So before you go all-in on your hosting plan, read the Airbnb hosting standards (https://www.airbnb.com/help/topic/206/hosting-standards) and make sure you're willing to commit to them -- and that everyone else in your household who might be involved understands them, too.
Look at other homes that are listed in your area
It's always nice to look at the competition and see what you're up against before you jump into the fray yourself. Spend some time looking at the other homes in your ZIP code or in your neighborhood that are listed on Airbnb. Pay close attention to the photos and the price points (both on weekdays and weekends) so that you know how to make your own rental competitive. Check the most popular amenities and ask yourself if you'd be able to provide the same. Read the descriptions, especially for the highest-rated rentals, to see how they describe the rooms and amenities. Take lots of notes and figure out what you can do now and what you might plan on doing after a few weeks or months of hosting to make your rental as enticing as you can.
Make the rental area as nice as possible
Most Airbnb guests put a premium on "clean," so your first step is to scour the area you're renting from top to bottom, and then consider making any changes you can to the space to make it look more inviting. If you haven't painted the room yet, that might be a good idea; you might also pay extra attention to the floors where the renter will be staying. Clean out the closets as much as possible (this might be difficult if you're renting the entire house on weekends, but do your best). Try to make sure that guests have space for their clothes and food, if they're in a shared or private kitchen space; if you do have a kitchenette or full kitchen available to guests, make sure it's stocked with at least the basics they'll need to prepare their meals, and consider making some basic snacks and foodstuffs available to guests for their convenience.
The bed doesn't need to be brand-new, but you should make sure it's sturdy and that the mattress doesn't sag at the very least. If you can fit a larger bed into the space you're renting, or even more than one sleeping area, that might be worth doing. Get some new linens and possibly pillows and bedspreads or coverings for the bed, and make sure the floor is at the very least clean and polished; get the carpets professionally cleaned or add a new rug if you can.
When the rental space is looking lovely, take your photos for the Airbnb listing. Try to use as much natural light as possible -- open the windows and let the sunlight flood in, and don't take your photos at night. Guests will want to see the sleeping area and bathroom they'll be using at a minimum; the kitchen and living area are also good places to snap, and if there's a beautiful garden or porch that will be available to guests, include those, too. It's usually best not to include a photo of the exterior of your rental space, though; you'll give approved guests your address and instructions on how to get inside the rental area, and you don't want any uninvited guests figuring out where the rental space is located.
Write your headline and description
Use your notes from your reconnaissance work on other listings in the area to craft a headline and description that will appeal to guests. The headline is one of the first things they'll see, so you might want to include details about how much room they'll have for living or sleeping (such as "king-size bed" or "two-bedroom apartment") and the neighborhood where you live, in addition to some adjectives that capture the feel of your space -- "cozy," "spacious," "modern," "traditional," and so on.
Include as many details in your description as you can. Think of creative ways to make your rental listing sound appealing -- if it's in a historic neighborhood, you can mention that, for example, and then guests won't be surprised if they see you don't have an uber-modern bathroom for them to use. List as many features as possible to help sell the space to guests; if there's a clawfoot bathtub and fully stocked cabinet with bubble bath and face masks, mention it, and if you have a Keurig or Nespresso machine instead of a standard coffee brewer, throw those names around, too.
Decide on any rules for guests
People who use Airbnb a lot are used to rules, so don't feel like you'll be imposing if you have some guidelines you'd rather have your guests follow -- such as "no pets" or "no smoking" or "no additional guests without host permission," for example. Think about how you'd like your guests to behave in an idea world and draw up a list of rules for anyone who rents your house. For things like smoking or pets, which might require extra cleaning after the guest leaves if they break the rules, you might also want to consider additional fees or fines if they break the rules, and make those clear upfront.
Create a guest binder
Some guests might be very familiar with your surrounding neighborhood and community, but others might be visiting for the very first time. In either case, you'll want to create a binder or concierge dossier to make available to them when they come visit. Include any house information they might need -- your contact information should be front and center -- and remind them about where to park, give them any wifi passwords and account information they might need, outline how to operate the television and coffee machines, and include some details about restaurants or attractions within walking distance, parks, take-out menus, whatever else an out-of-town guest might need. As more guests come through your rental, you might find things to add to this document or binder, so try to make it easy to edit for your own ease.
Stock up on bulk supplies
One expense that new Airbnb hosts don't often consider is the basic supplies you'll need to stock in the rental area, like toilet paper, shampoo, conditioner, and soap in the bathroom, or tissues for the bedroom, or paper towels in the kitchen. Buying these things in bulk is typically more economical than running to the store; keep in mind that guests probably aren't going to be as frugal with these types of supplies as they might be in their own home, so plan on heavy usage and make sure you've got plenty on hand for when the next guest arrives.
Make a plan for paying taxes
You already know that income is taxable, and that goes for Airbnb income, too. So before you spend all your rental income and then get hit with a big tax bill next year after you have to claim all that additional income, talk to an accountant about the best way to manage this new source of income and whether it makes sense to pay taxes on it quarterly (hint: you might save money that way). Whether it's a separate account where you put a percentage of your earnings or another plan, such as setting up an LLC or an S-Corp for your rental income, an accountant can give you a rundown of your options and help you pick the best one.
Arrange for cleaning
Guests really do expect their Airbnb rental to be clean, so you'll have to make arrangements for how to do that -- especially between guests, and that might mean a tight time window of a just a few hours after one guest leaves and another arrives. If you're going to clean the space yourself, you'll need to make sure you're available to tidy up and refresh the rental whenever you have to (and that might mean in the middle of the day on weekdays or hours on weekends), or you can find a reliable cleaner who's willing to help you out. You can include the cost of cleaning in the rental price, so figure out how you're going to manage cleaning your space and make sure every guest is impressed when they walk in the door.
Consider entry and exit
It might not always be convenient for you to be available to meet guests at the door, so you'll need to figure out how guests will get into your rental space and where to leave the keys when they leave. Many Airbnb hosts use lockboxes on the doors with a code that the guest only receives after payment; if that's your plan, change the code periodically for safety's sake. Maybe you can hide the key in a fake rock or on the property somewhere if you've got an outside space that will work; again, make sure you're mixing it up on occasion so that word about where you keep the keys to your rental can't spread everywhere. And if you have preferences about where guests should park, make those clear to them before they arrive.
Calculate your break-even and profit margins
If you've followed every step on this list, then you've already forked over some money without any income yet -- that will change! First, though, you need to figure out your margins so that you know your minimum break-even amount. Assume that you probably won't be able to rent your space every single night it's available and leave some wiggle room in your pricing for vacant nights and days. When you know your minimum break-even nightly amount, you'll be able to better calculate how low you can go on any discounts; rentals are typically more expensive on weekends and holidays, so take that into account when you're setting pricing, too.
List your home on Airbnb
Once you've completed all of these tasks, you're ready to pull the trigger and actually list your home on Airbnb. The platform makes this an easy process and walks you through it step-by-step, and because you already have your photos, listing description, sense of the calendar of days you want to list, and amenities you'll be providing, it should be even easier for you.
You should pay close attention to the suggested rental rates on Airbnb, which it will provide for you -- if you know that your listing is nicer and better-equipped than other listings of a similar size on Airbnb, then it's fine to override it and go for more, but the algorithms that calculate nightly rental on the platform are usually pretty smart and can help eliminate a lot of the guesswork for you. If you find that your rental gets booked up quickly, that's a good indication that you can raise the price bit by bit -- and if you have a hard time securing bookings, try lowering the price a smidge at a time.
After the listing: Respond quickly to questions
Many guests are going to have questions about your rental. It's a good idea to be as responsive as possible to these questions; even if the guest isn't a good fit for you for this trip, they might keep you in mind next time -- and also, you can keep tabs on the questions they ask and see whether it makes sense to include that information in your listing description so you can bypass more questions next time. A responsive host is the first indication to a guest that they'll be taken care of during their visit, and you want to make a good first impression, so be ready to field questions as quickly as you can.
After the listing: Screen guests
You might not want to list your home to every guest who requests it. That's fine as long as you're following Airbnb's guidelines and not discriminating according to race, ethnicity, and so on -- so make sure you have a good reason to reject a guest, such as several bad reviews from previous hosts, or someone who doesn't want to pay your minimum amount, both of which are perfectly reasonable. You can ask your guest questions, too, such as whether their trip is for business or pleasure, so use this opportunity to learn a bit more about the people who'll be renting your space.
After the listing: Pay attention to reviews
Reviews are important on Airbnb -- the sooner you can get some good reviews for your rental space, the better. Guests look at them before inquiring about a home, and they especially want to know whether the rental space was clean, whether previous guests' privacy was respected, and how easy you made the check-in/check-out process for other visitors. Do your guests a favor and review them, too; note whether they followed your house rules and whether you'd be willing to have them back as a guest, especially if they were good guests. You can prompt guests to leave a review after they leave, and if you do your best to stay on top of your reviews, respond to any bad ones -- and make sure you address any legitimate issues that guests raise in the moment so they don't end up in a review -- you'll find that reviews can be very useful for your Airbnb experience.
After the listing: Be an attentive (but not hovering) host
Most of your guests will probably want to keep themselves to themselves and will reach out to you only if they really need to, so for your part, you should make sure that you've given clear directions as to how to reach the rental and get inside, your expectations once they're there, how to check out easily, and provided whatever information you can to the guest. That said, there will be times when the guest is going to need to reach you while they're staying at your rental, and you should do your best to reply immediately or as quickly as possible. Always make sure your guests have a convenient way to contact you (cell phone is usually best, and let them know it's a mobile phone so they can text instead of call if that's easier), and respond promptly, especially if the guest is having trouble getting inside the rental or if there's something amiss once they arrive.
Renting your house on Airbnb takes a lot of work, but it can be rewarding, too -- you might be able to make improvements to your home or pay your mortgage off sooner because you leveraged Airbnb to do it. If you follow all these steps and do your best to be an attentive, responsive host, you'll find that Airbnb is well worth the effort.
Sheila Liermann | Sun Valley Real Estate Broker
Curious about whether your Sun Valley would be a good candidate for Airbnb? Call me and let's talk! 208.481.0450