What You Need to Know Before Renting Your Home on Airbnb

As of early 2017, more than 150 million people have used Airbnb, the world’s most popular online marketplace for short-term lodging. Globally, that translates into more than 500,000 stays every night. Still, the market isn’t saturated, especially in certain areas. If you want to become an Airbnb host, the platform – and its massive base of enthusiastic users – makes it easy. Still, there are some things to consider before making your property available to rent on Airbnb:

Consider When, How and How Often You Want to Rent

Depending on your personality, level of commitment and financial expectations, you can approach hosting in a variety of ways. If you have a spare room, you can rent it out while you’re home. Maybe you travel often for work or regularly stay with a significant other, you can rent out your entire space and stay elsewhere. And if you live in a particularly in-demand city, you can even rent or purchase property specifically for Airbnb, although this isn’t recommended as your first try as an Airbnb host.

Determine Market Price for Your Rental

Just like long-term rental rates, market values for Airbnb rentals can vary wildly. If you’re in a hot market in a major city, you’ll be able to charge exponentially more for a single room than you could for an entire rural Midwestern home. Browse the site and see what similar rentals are charging, then compare your place honestly against them. Airbnb takes a small percentage of the total cost from every host (and guest) – that’s how they make money. To start, consider knocking $20-50 off your nightly rate. This will help since renters won’t have the security of seeing good reviews of your property or you as an Airbnb host, and a discounted rate may be enough to sway them to try your property. If you want to, you can employ Airbnb‘s automatic dynamic pricing – that way, if there’s a major event in town and demand goes up, you’ll get a fair rate for your space.Understand the laws in your area:

 

You may remember news coverage about hosts in New York City getting fined thousands of dollars for rental arbitrage. Don’t let it happen to you – make sure you’ll be operating legally. Does your city or county require you to get a license before operating your property as a business (which it would technically be, if you’re renting it out)? Is your property up to building and housing standards? How will this affect your taxes? Airbnb doesn’t provide legal advice, but does provide a good starting list of the laws and regulations that may apply in your town, city, county or state.  

Protect Yourself

Airbnb offers secondary coverage to its renters up to a million dollars. It includes property coverage and liability insurance in case your guests get hurt. Sounds great, right? The platform’s Host Protection Insurance program is a nice start, but don’t make the mistake of thinking it’s enough. It excludes liability arising from a variety of scenarios, coverage over common areas and any protection for your belongings. Without the proper coverage, you have no recourse if a guest accidentally ruins a piece of furniture or steals any valuables. Talk to your insurance representative about your options before opening your home to short-term renters.  

Create Your Listing

Your nightly rate, headline, home description and rules can go a long way in getting renters dreaming about staying at your place. But the real magic is in your photos. Consider hiring a real estate photographer to capture great shots of your space. A professional photographer will have the skills and equipment to highlight your home’s best features and hide less appealing aspects.  

Prepare for Guests

So you have a booking. Great! What now? Don’t panic. Renters don’t expect your home to be perfect – they’re often using Airbnb to get a more “authentic” taste of your city. But you should be courteous. Think about what makes you feel comfortable when you’re staying away from home. At a minimum, your rental should be clean, have working locks and amenities, and offer basic provisions like toilet paper and clean linens. If you really want to wow your guests, you can go above and beyond by offering a limited selection of food or drinks, a personalized guide to your area or unopened, travel-sized toiletries they may have forgotten.

Enjoy Your Experience

There’s a reason Airbnb has become so popular with travelers – most hosts and guests report great experiences.

Bonus Tip

Your Airbnb business is not covered by a standard Homeowners or Landlord insurance policy. You will need to purchase a specific policy to cover these risks. SelectQuote agents are available to do a policy and coverage review to make sure you don’t open yourself up to unexpected liability claims. Call (855) 777-9090 or visit www.selectquoteautoandhome.com today.

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