You may be contemplating a move toward putting up your property for rent on the popular lodging site Airbnb. But you may not know how to begin or how realistic it might be to offer your home as place for strangers to live on a short-term basis. Airbnb hosts take on some pretty big responsibilities when they decide to allow people they’ve never met before to live in their home, condo, or apartment and that’s why you need to stop and think before you create a listing. These are ten + essential considerations you need to ponder first as they are all very relevant to becoming a host with Airbnb.
Do You Know How Airbnb Works?
Sure you’ve heard about it, but have you really put much thought into what you’re getting involved in as an Airbnb host? Simply put, you’re allowing strangers to live in your home for a specified duration of time. Depending on the space you are renting out, you could be living alongside total strangers during that time. It comes down to one thing, are you cool with that? Do you feel comfortable with such an arrangement because if you’re not, then being an Airbnb host may not be for you. If you have a property to rent where you won’t be living in the same general space, then that might alleviate some of your fears which then begs the question of whether or not you’re comfortable with total strangers living in that space without you being around.
Do You Know the Law?
In New York City, the law (state law) states that you can’t rent out an entire apartment for fewer than 30 days. State lawmakers believe those rentals encourage property managers and owners to construct what essentially amount to hotels in residential buildings. Under the state law, landlords can be fined for each individual apartment listed and are charged $1,000 on the first offense and $5,000 if they’re caught listing the same apartment again, according to the city. Unfortunately, city and state laws say the opposite: New Yorkers are prohibited from renting out their place for less than 30 days and it’s illegal to advertise it on Airbnb or other home-sharing platforms.
Have You Considered the Tax Consequences?
If you are subject to U.S. income taxes, you must include in your gross income all amounts you receive as rent. ‘Rent’ is the gross amount of payment received (before any expenses are deducted) for the use or occupation of property. It can also include payments received for any goods or services that are provided, e.g. meals, cleaning, etc.
Big 4 powerhouse E&Y has published an excellent guide for those who have income from rents.
Do You Understand the Risks?
Since we’re on the subject of offering a fully furnished property for rent while you’re not on the premises, you need to consider what type of risks and liability you are taking on with this arrangement. You might have property stolen out of your property, you could be liable if someone gets hurt while they are staying in your place or if they damage someone else’s stuff (not to mention yours or your neighbor’s). There are also risks that come with renting to someone who decides to become a squatter in the property. As you may have guessed, we’re talking about the necessity for liability and other forms of insurance. Do you have enough of it and are you prepared to take on more so you and your belongings are covered.
Are You Prepared to Put in the Time?
Okay, so the first two issues are no big deal and you’re properly covered. But do you have the time to commit to this endeavor? You’re running a business here, which means you need to create and post listings, take reservations, and be prepared to handle any emergencies that might arise when a guest is staying at your place. The most successful Airbnb hosts put in a considerable amount of work to rent their property on a regular basis.
How to Post the Best Listings?
Airbnb is growing everyday with new users joining the service to rent and host. So you’re going to want to make sure your listing stands out. Give prospective guests a reason to check your listing and convince them that your property is better than the others out there, especially with so many other choices available. You don’t need to be a brilliant wordsmith to craft an eye-catching description (though if you are, that totally helps), and understanding the value of good photographs can also make a big difference.
How to Deal with Your Neighbors?
Chances are that the property you’re offering to future clients is situated by other people who either live near you or on the other side of the wall from you. Whichever may be the case in your situation, you’re going to need to talk to your neighbors about becoming an Airbnb host. Get their feedback and hear their concerns before you list your property. They may be so vehemently against having strangers walking in and out of the building in which you both live that it could be too much of a hassle to host.
Did You Discuss This with Your Landlord?
This one very important step could make or break your plans to become a host. It’s perfectly okay for you to offer your home to others if you own it, but if you are renting from someone else you could be in violation of your lease agreement if you rent it out to others for a short period of time. A word of advice, don’t do it behind your landlord’s back. If he or she finds out, you could be out on the street and you’ll be looking for a new place to live.
Is Your Property Priced Right?
Establishing a weekday rate and a weekend rate takes a lot of cultivation. You can’t just name a price and then wait around until someone comes calling. You’re going to need to spend some time adjusting your rates to stay competitive in the current market. Is there a big music festival taking place in your area soon or some other event that will bring a lot of people into town looking for accommodations? Proper pricing should reflect demand and if your price does not, you could be losing out on serious income.
What’s Going On in Your Area?
This refers to more than just any concerts or comic conventions on the schedule. It also takes into account any changes in local statutes, trends among your guests, and a keeping up on current events that might impact your ability to host on Airbnb.
Is All of This Sinking In?
Now that you’re getting a clearer picture of everything that is expected of you as an Airbnb host, are you prepared for the potential upheaval of your life and routine? What about your significant other or your pets, if you have any. They live with you so they are going to be just as affected by your decision to rent your property.
Have You Set Realistic Goals?
If you’re ready to forge ahead and become a valued member of the hosting community, be sure you’ve set credible expectations for yourself and the level of income you’ll be receiving. Are you planning on doing this periodically to make a little extra cash on the side or is this endeavor the start of a full fledged money-making enterprise? Whichever you have in mind, the way you interact on Airbnb should reflect your intentions.