You may have heard about people earning big bucks by sharing their home with travelers through Airbnb.
You might even be part of the Airbnb community already. You are if you’ve ever used the service to find a place to stay.
- Should you take it to the next level and become an Airbnb host?
- Is it safe to invite strangers into your home?
- What kind of risks are you taking if you go for it?
- If you do take the plunge, is it worth it and how much money can you make?
By the time you finish reading this in-depth Airbnb host opportunity review, you will know not only the answers to these questions, but also whether becoming an Airbnb host is for you.
What is Airbnb and how did it get started?
Back in 2007, struggling roommates Brian Chesky and Joe Gebbia put their thinking caps on to solve their financial woes.
They figured that if they threw a couple of air mattresses down in their living room and charged people to sleep in the space, they’d be able to pay rent each month without panicking. (That’s where the “Air” comes from – air mattresses).
Luckily for Brian and Joe, they lived in San Francisco, where hotel rooms are scarce and expensive.
They launched a site to streamline their business, got some funding and the rest is history.
By pairing hosts who have space to list in Airbnb’s marketplace with travelers who need a place to hang their hats for a short time, they’ve created a global company and community.
Airbnb now boasts over 3 million housing listings in 65,000 cities and 191 countries – and those numbers are growing by the day.
Why are travelers and hosts drawn to this service?
First, Airbnb guests get a travel experience they would otherwise wouldn’t have, because visitors get to interact with locals. 74% of all host lodgings are outside of the main hotel clusters.
That means that folks get to explore new places. And, by the way, they usually pay far lower rates than stodgy hotels charge.
One study referenced by Wikipedia reported that guests can rent an entire house for the same price as one hotel room.
Hosts also score. They meet people from all over the world, gain new friends, generate (potentially life changing) side money and do a solid for humanity at the same time. Win-win if you ask me.
So, yes, it’s a very cool idea. But is it a cool idea for you to become a host? That’s what we’re here to find out.
What am I signing up for when I become an Airbnb host?
When you sign up (which is free by the way), you become part of a house-sharing community. You always have control over:
- How much space to list
- When to list your place
- Who gets to stay with you
- How much to charge
Airbnb markets your housing (and constraints) to travelers for you.
When you agree to allow a guest to book your space, you pay Airbnb a three percent hosting fee once the guest is charged. The company also charges guests six to 12 percent as a guest services fee.
How much can I make as an Airbnb host?
It’s difficult to make generalizations about income. As I said, you decide what you charge. You can also charge different amounts based on length of stay and time of year. It’s up to you.
What I like, though, is that Airbnb is there to help you find a price that will be both profitable for you and competitive for the market (if you want its input).
Since Airbnb know what people are actually paying in your market, I think this is a huge plus.
If you want to get a rough idea of how much you might potentially earn, simply go to the Airbnb calculator, plug in your zip code and the number of nights you want to list.
Another way to find this information is to search the site itself for listings that best resemble yours.
This is a rough estimate, of course, but it can give you a good idea of whether or not we’re talking about pocket money or get-out-of-debt/save-for-retirement money.
If you want to outsource the pricing decisions, Airbnb has you covered.
The company has a service called Smart Price. If you elect to use it, the algorithm will automatically adjust your rate based on supply and demand.
If you use this free service, all you need to do is set minimum and maximum prices. It does the rest.
Of course, you don’t have to use this. It’s free and it’s available, but it’s not mandatory.
All of this makes it difficult to know exactly how much you will earn until you actually give Airbnb a try. You can then decide how much you want to list your space for. However, I am convinced that, as a host, you can make serious dough.
According to some experts, you can earn 81% of your rent if you list one room in a two-bedroom home using Airbnb. Not too shabby.
The Wikipedia study I referenced above reported that during the housing crisis, 53% of the hosts said that the extra income they earned through Airbnb was enough to help them keep their house.
Imagine what you could do with that money if you didn’t face that problem?
What equipment do I need?
When you become an Airbnb host, you are in the hospitality business. You aren’t simply sharing your space.
This means that you must take responsibility for making your guests’ stay as comfortable as possible.
At its most basic level, this means that you must provide bedding, linens, towels, soap, cleaning supplies, kitchen utensils, coffee, tea, etc.
Once you sign up, Airbnb will walk you through this process with its own checklist, so don’t worry. Just understand that it’s on you to make your guest feel welcome.
Along those same lines, you should create a standard guest greeting to explain how everything in the apartment or home works and point out all the amenities.
Include your internet wireless password, maps, a list of great sites to see, places to go and restaurants to dine at.
The last host we stayed with in Prague did this, and it made us feel very welcome and relaxed.
Do the little things that cost little and take almost no time. It will pay off big time.
What kind of time commitment is this?
It might take all of 30 minutes to get set up on the site and be in business. Plan on spending a few minutes daily answering inquiries and booking guests.
If you set your home up properly, you shouldn’t need to physically meet your guests when they arrive. However, that is a nice touch and it will improve your ratings and reviews.
The only serious time commitment consists of cleaning after your guests depart. Depending on the size of the room, apartment or home, this could take anywhere from 30 minutes to four hours.
Additionally, depending on how long your guest stays and whether or not you charge a cleaning fee, it might pay to have a house cleaner do this for you.
What does it cost to run this business?
Your costs depend on your situation.
I’m assuming that you already have the space and that you aren’t going to buy or rent a place just to get into this business.
If you are thinking about buying or renting a place for the sake of listing it out through Airbnb, the cost/benefit discussion is more involved (and beyond the scope of this post).
So, assuming you plan on listing out some space that you already have and that isn’t currently being used, you have no additional housing costs.
Again, you will have to provide consumables like soap, coffee, toilet paper, etc. You might want to expand this list if you feel the need.
These costs are minimal, but they add significantly to your guests’ experience. In my opinion, these are good investments.
Utilities can add up, as guests might be more liberal with leaving the lights and air conditioning on if they aren’t paying the bill. Additionally, as I said before, you may have to pay for cleaning and taxes.
I think a good rule of thumb is to be conservative and figure 25% of your gross income will go to costs. Please do your research and number crunching, though.
Costs vary widely depending on your situation and local tax laws.
Will I be able to list my accommodations as often as I’d like?
Based on my snooping, it seems that most big city Airbnb hosts report occupancy levels between 60 to 94 percent.
The way I see it, if I wanted to list my place out 60 to 94 percent of the time, I should not have a problem doing so depending on where I live.
If I live in a big city and I want to list my room or entire place for 60% or less of the time, I shouldn’t have a problem doing so as long as I am flexible and do a decent job on pricing.
How much control do I have as an Airbnb host?
First, as I said, you decide when to list, how much space to list (a room, several rooms, the entire pad) and the nightly, weekly or monthly rate.
You also get to determine the house rules. To me, that’s sounds like a lot of control.
What about the neighbors?
The last thing you want is to create a grumpy neighbor, so you may want to take steps to nip that problem in the bud.
The best way to handle this is to be proactive.
Let your neighbors know that you’ll be hosting with Airbnb. Tell them that you have already confirmed that what you are doing is legal.
Continue by telling them that it’s important to you that they are not inconvenienced. Tell them about your vigorous screening and stringent house rules.
End by giving them your phone number and telling them to call anytime – day or night – with any concerns.
At the same time, you can provide your neighbor with the link to Airbnb’s Neighbor Complaint Tool. This utility sends instant feedback to the company and allows your neighbors to provide honest appraisals of any problems.
If there are legitimate issues, the company will look into it and potentially end their relationship with you.
This assurance and social accountability may be all that’s needed to turn your neighbor into an ally – and maybe even a potential host or co-host you can help make money with.
Is it legal?
When you join the Airbnb community as a host, you are, in essence, subletting your property for a short time.
If you are a renter yourself, you have to make sure that your lease doesn’t prohibit you from becoming a host.
If you own your property, you still have to make sure that there are no homeowners covenants, conditions or restrictions that forbid it.
Even if you get the all-clear from your landlord or homeowners association, you might have to deal with city laws.
Some cities demand that you register and get a license in order to become part of the Airbnb host world.
The company lists various cities’ requirements. Study your city’s carefully before signing up.
Of course, remember that when you become a host, you are in business and you’ll have to pay taxes on your net income. Sorry…. No way around that.
Can I learn more about my guests before I agree to host them?
Yes. Airbnb requires that guests and hosts create profiles so that each party knows who they are going to be staying with. There are guest and host reviews and ratings as well.
As a host, you have the opportunity to review your traveler’s reviews and ratings before agreeing to host them. You have no obligation to accept anybody for any reason.
As a host, you’ll also have access to a private secure messaging network where you can ask your traveler whatever you like to get a clearer sense of who the person is.
They can also ask you questions. You can tell a lot about a person by the questions they ask, so this is a good thing.
You can also require the prospective guest to send you a scanned government-issue identification document to ensure that they are who they say they are.
Should I worry about hosting problematic people?
Based on my research, I don’t think this is a big concern. I didn’t find many host complaints during my research. Besides, Airbnb’s roaring success tells me that this isn’t a problem, too.
If a lot of guests and hosts had bad experiences, Airbnb would not be as successful as it is.
I’ve used Airbnb a number of times. The reviews helped me (and the host) make good decisions, and the stay was always pleasant.
Also, because I enjoy talking to people, I usually asked my host what their experience has been like and I don’t remember hearing anything negative.
This is not to say that it can’t happen. I’m sure it can and does.
But the success of the company, the online reputation reviews and ratings, and my own personal experience tells me that having weirdos show up to stay at your place should not be a concern as long as you screen and review their profiles.
You can also link your Airbnb account to Facebook and other social media sites. This will help you screen your would-be guests even more.
You can do this by becoming friends on Facebook and checking out their profile.
This can tell you what kind of people your potential guests really are, and it should help you make a better decision about renting to them.
If on the other hand, you want to scale back the screening, you can simply let Airbnb know the minimum requirements you have and then allow a traveler to book a stay at your place automatically.
You don’t have to use this service, of course, but it is available.
What about insurance?
Airbnb provides a $1,000,000 host guarantee, which is pretty good. In essence, this protects you against third-party claims of property damage or bodily injury up to $1,000,000.
How are payments handled?
Airbnb pays you 24 hours after your guest(s) check in.
What if I have the space, but no mind for logistics?
Airbnb really is a community. I like that about these people.
If you don’t have the time or stomach for running the business, the company will pair you up with a highly rated partner who you can offload much of the burden to.
How does Airbnb help me grow my business?
For a company that doesn’t charge franchise fees, these people recognize that they will only be successful if you are.
For that reason, they created a number of easy-to-use guides and tool kits that are designed to help you create an attractive listing, communicate with your guest and manage your relationship.
The company also takes the idea of community to heart. Airbnb created an online world where hosts from all over the planet connect and help each other be successful.
Airbnb also offers 24/7 support for hosts so that no matter what you have to deal with, you won’t have to deal with it alone.
Remember, Airbnb wants to make your success easy, so it won’t let you down.
Another way Airbnb pulls through for hosts is by providing resources that make the process easier.
Should I become an Airbnb host?
When I first learned about the Airbnb host opportunity, I was skeptical. I was concerned about having creeps and weirdos hanging around in my crib. On top of that, I didn’t think there was that much money to be made.
But having done the deep research, I think this is a killer idea for the right person.
Chances are very good that there are a lot of travelers who are looking for a place to stay in your area, and who are willing to pay for it.
Since the company does a good job of vetting potential guests (and hosts), I wouldn’t be too concerned about having some maniac loser sitting at your breakfast table.
Host sometimes have guests that they would not invite back, but I don’t think this happens often.
Depending on how much you are willing to host, you could put a few hundred bucks in your pocket each month or a few thousand. It is up to you.
And if you get really into this business, you can recruit other hosts, manage the guests and earn even more. I believe that this can be a tremendous opportunity.
So, if you are looking for ways to raise more than just pocket money without investing a ton of time and cash, this could be your ticket. It’s absolutely worth a try.
People write me all the time about their financial difficulties, and I think that this is a big-time way to solve that problem.
Money aside, if you like meeting new people and want to be part of a global community, I think that Airbnb is something that you should experiment with.
However, if you are looking for a passive income stream, this ain’t it. When you become a host with Airbnb, you don’t need to put a lot of time in. However, it still requires some hands-on work.
If you want to travel more and/or have less interaction with people, you should pass.
Airbnb says that trust is the bedrock of its business.
I looked at every resource I could find. I scoured the net for complaints against the company. Yes, I found grievances here and there, but that’s to be expected.
I didn’t, however, find any conflicts between Airbnb and hosts or guests. The company seems to deliver on its promises. Hosts are making good money. Guests are having great experiences.
Can you think of any reason why you wouldn’t give hosting a try?
This article originally appeared on WealthPilgrim.com and was syndicated by MediaFeed.org.
Featured Image Credit: DepositPhotos.com.
