It’s the Uber of vacation rentals, and business is booming. With all the buzz from Facebook, Twitter, Instagram, and word-of-mouth, you’ve probably heard of (or used) Airbnb by now.
If you’re ready to buy but don’t know where to begin, our quick-and-easy online prequalification process can get you started.
2 ways Airbnb is changing homebuyer behavior
Airbnb started almost 10 years ago in San Francisco. Now it’s in over 34,000 cities and 191 countries. When you rent through Airbnb, you’re essentially staying in a home away from home. An Airbnb host offers up their home or a private room for you to stay in, often for much cheaper than a local hotel.
Vacationing with Airbnb is a beautiful thing. But what does this have to do with you as a homeowner? These days, we’ve noticed an interesting trend among our homebuyers. More buyers are looking for homes that are Airbnb-friendly, with the potential to make some extra cash.
Maybe you’re thinking about updating your home to host on Airbnb. Have you thought about a cash-out mortgage refinance?
Airbnb is impacting homeownership because many buyers are looking for homes with Airbnb-friendly features. That’s reason number one. Reason number two Airbnb is changing the modern homeownership game is because it allows you to “try before you buy.” In 2015, Airbnb partnered with Realtor.com to encourage homeownership. During the cross-promotion, prospective homeowners could browse properties on Realtor.com and then book an Airbnb stay in that neighborhood.
For both companies, the joint venture was a big win. Homebuyers could test out an area before placing a bid on a home. The same homebuyers might book again with Airbnb in the future. What’s more, these homebuyers could also use their Airbnb experience to determine whether becoming a host was the right fit.
6 realistic ways for first-time hosts to make money off Airbnb
With the holidays coming up, this may be the perfect time to dip your toes in the home rental waters.
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Thousands of people are opening their homes as hosts and making money off Airbnb. But as a homeowner, we’re not suggesting you go into this blind. Becoming a successful Airbnb host takes some prep work, if you want to please your guests, avoid common rental snafus, and protect your property. We took a moment to chat with Andrew McConnell, cofounder and CEO of Rented.com, the first online marketplace that helps Airbnb hosts find, compare, and choose professional property managers, to get the inside scoop.
Here’s what you need to know before you begin:
1. Check out your earnings.
Airbnb provides a weekly estimate of how much you could earn as a host, based on your ZIP Code, before you sign up. McConnell says, “If you’re purchasing a home as an Airbnb investment property, location is everything. While you can have an Airbnb property just about anywhere in the world, you’ll want to invest in areas where it’s legal and where you’ll get the highest returns. Consider the costs of home insurance, maintenance, purchase price, local property taxes, etc., to find out where you’ll really be getting the highest return on investment.”
Surprisingly, McConnell says, many well-known vacation rental markets, like Aspen, Nantucket, and the Hamptons, aren’t great investments when costs are considered. Lesser-known locations, like Panama City Beach, Florida, and Galveston, Texas, take the top spots in the best places to invest in an Airbnb.
2. Get permission.
As a homeowner, you should be in the free and clear. But we still suggest reviewing city regulations and HOA restrictions before you officially start to host. Because Airbnb is a relatively new service, it’s had its share of growing pains and pushback from local governments. We saw this play out when Airbnb sued last year against the hefty fines placed on New York City hosts who break rental regulations.
Fortunately, Airbnb has a “Responsible Hosting” section on their website that can be filtered by city. To minimize adverse effects on the housing market, San Francisco, the birthplace of Airbnb, also published their Airbnb rental ordinance online. The San Francisco Business Portal breaks these regulations down further in their Short-Term Residential Rental guidelines. While San Francisco’s Airbnb restrictions provide a helpful reference point, specific housing and rental regulations will still vary by city.
3. Make your profile.
More pictures and detailed information about your home and neighborhood mean less confusion for your guests. McConnell reminds us, “First impressions matter, so put time into creating a complete and convincing listing. Include at least 24 photos of your home, and use a professional photographer if possible as it can result in 39 percent more in additional bookings and revenue!”
Once you get some interest in your listing, the fun doesn’t stop there. “Response times also matter,” McConnell says, “so respond to every inquiry within 24 hours. Finally, optimize your copy to allow your guest to envision himself in your home.”
4. Look at the competition.
With a little sleuthing, you can find out what your neighbors are doing on Airbnb (and how you can do it better). As a baseline, McConnell explains that most guests are looking for hotel-like, nearly instant service when it comes to amenities, booking, and making requests. “Provide a fully-stocked kitchen and bathroom, a private pool or hot tub if appropriate, a washer and dryer, Wi-Fi, and TVs for the bedrooms. You’ll want to make your guests feel welcome and at home,” he explains.
5. Put on the finishing touches.
Homes with super-clean spaces, updated decor, and a free welcome basket or bottle of wine in the fridge often get the best reviews. As cute as they may be, these freebies really do matter. Considering that as many as 30 percent of Airbnb rentals come from repeat customers, McConnell says, “You’ll want to delight your guests every step of the way.”
6. Consider outside help.
Depending how often you rent your home or spare room on Airbnb, you may need to call in the reinforcements. McConnell says HomeAway’s marketing materials advertise that the average host will need 8.4 hours per week to manage his or her marketing, bookings, cleaning, etc. For homeowners whose time is valuable or who are looking to make more money, McConnell suggests working with the pros. His site, Rented.com, has over 800 management companies listed. “It’s easy to find and compare your options,” he says.
Renting your home on Airbnb can be a fun, rewarding, and lucrative experience. But the first step is getting you into that home of your dreams. Start by getting prequalified for a mortgage, and we’ll take care of the rest. And if you still have questions about the Airbnb laws in your area, we’ll help you find the answers before you become a host.
For educational purposes only. Please contact your qualified professional for specific guidance.
Sources are deemed reliable but not guaranteed.