AirBnb can be a great way to turn your home into an asset that makes money for you. You can share one room with guests, convert part into a private guest suite, or even rent the whole place while you’re away.
Last year we converted an empty room in our house into an AirBnb listing. The room had been vacant, used for storage. That one room now earns me up to $3000 per month, which is enough to cover my mortgage!
Like any business, there’s an easy way and a hard way to do it. Here are some of the lessons that we have learned with the Easy Entrepreneur mindset.
Step 1: Make Sure Its Permitted
Many landlords, homeowner organizations (HOAs), and cities have restrictions on Airbnb and other short-term rentals. This is a shame, as it’s a benefit to hosts and travelers alike, and there is no real harm to the community if you do it right. If you’re not allowed to host Airbnb, I encourage you to lobby your landlord, HOA, or government to allow it.
In some cases, cities also have specific restrictions and taxes. For example, San Francisco requires a permit and limits you to 90 days per year. Airbnb can help you navigate any city requirements.
Step 2: Design The Space
You want your space to be appealing to prospective guests. It should stand out among other listings, and get good reviews. The best way to do this is to design it with the guest in mind. Like any business, this may require an upfront investment.
At a minimum, guests are looking for a place to sleep, with access to a bathroom. They expect it to be quiet and clean. Ideally it would include a great location, parking, self check-in, a private entrance, a desk with wifi, soap and towels, and other amenities. Some guests may want a kitchen, multiple rooms, and even more. That said it doesn’t have to be perfect to be profitable, so don’t be discouraged to start with what you have. For example, we don’t include a kitchen or laundry.
We designed our space just like a hotel room – with a private entrance, studio bedroom, private bathroom, and the standard features you’d expect in a nice hotel. We are close to downtown and the convention center, so many of our guests are business travelers, but we’ve also had people visiting family, going to a Shark’s hockey game, and international tourists.
Here are some considerations when designing your space:
- Entrance. If you can provide a private entrance, that’s best. You’ll get more guests at a premium if they don’t have to share space with you. You should also install a smart lock so they can have keyless entry and come and go on their own.
- Comfy bed. Get a nice bed frame and decent mattress, and get good linens and extra pillows. We have a very cozy comforter for the winter. Make it a nice place for people to sleep. If you have space, you can also add a sofa bed or futon to allow extra guests.
- Work space. Business travelers need a desk with wifi.
- Bathroom. Keep it clean and simple. Provide enough towels, toilet paper, and soap/shampoo. Keep extra in a cabinet. We also provide a hair dryer, iron, and extra toothbrush in a cabinet.
- Furniture. We provide night stands, an open wardrobe (so they won’t accidentally leave anything), luggage rack, and a reading chair.
- Outlets. Make sure there are outlets next to the bed. As a bonus, you could provide a charging station.
- Heater / AC. Even though the house has central heat, we generally keep it cool and added a separate HVAC unit that the guests can use just for their room.
- Entertainment. If you have cable and a TV, that’s great. We don’t, and we’ve only had one guest ever comment on it (and he said it motivated him to go for a walk and explore the neighborhood).
- Kitchen. If you give kitchen access, make sure it’s clean. We have had requests for both a coffee maker and a fridge, but we don’t have them because we don’t want to clean up after messy guests.
- Decoration. Keep it modern and simple. People don’t want to see your personal pictures, so you’ll want to hide your stuff and redecorate if you are sharing your living space while you’re away.
- Neighborhood Guide. Put together a page with a list of your favorite restaurants and shops that are nearby. This will help if a guest forgot something or wants to find some food.
You may find that there are a number of things that you don’t have but could have to make your space better. For example, we did construction to add a door between the room and the bathroom, and repainted the room. We also had to buy all new furniture, heater/AC, smart lock, curtains, carpet, etc. All-in-all we invested about $4,000 into the space, which we recouped in the first two months. Keep receipts, everything is a business expense!
Step 3: Design Simple Business Systems
The AirBnb platform handles finding guests and payments (including our city taxes), and it’s pretty easy to use. However, here are some other key systems that you should set up:
Communications. You should communicate clearly with every guest, and respond promptly to any questions or requests. Always communicate in a friendly, positive tone. You can set up standard email templates in AirBnb, and just update with the guest’s names, dates, etc. We have standard emails for confirmation (when they book), check-in procedure (the day before they arrive), and check out procedure (the day before they depart).
I can program this on my phone, from anywhere in the world!
Check-In / Check-Out Procedure. Make the check-in and check-out as painless as possible for both the guests and yourself. We installed a smart lock, so that we can change the code for each guest, and so that we don’t have to be there to meet them. It has the side benefit that we know when they go in and out, so we know if they’ve checked in and out. It was well worth the $300 investment, since guests can check in any time of day/night even when we are away.
Cleaning. This is the one part of AirBnb that’s the most work. Our check-out time is 11am and check-in is 3pm, so it needs to be done during that time (or you can schedule a night off between guests, but that’s lost money). Since we work at home, it’s easy for us to do when we are around. However, we travel a lot, and but we’ve been able to find a reliable cleaner using TurnoverBnb. We can easily schedule and manage the cleanings with that app, and it handles the payment to the cleaner.
Step 4: Marketing
AirBnb handles finding guests for you, but you want your listing to stand out so that you’ll have high occupancy. This will help you get a higher price during busy seasons, and help you get more bookings during quiet times.
Take good pictures. Hire a photographer or talented friend to take pictures with good lighting. It will pay off in the long run. Show the entrance, bed, bathroom, and any other key things that make your place special. For example, we could highlight the snacks we leave and our organic soaps. You could also highlight things in the neighborhood, like nearby restaurants or convention center.
Write a good description. Think about who is your target guest, and look at other listings in your area to get some ideas. For us, we target mainly business travelers, but also get both local and overseas guests on weekends.
Make sure your listing is accurate. When we first put out our listing, we had it as “entire place” which one guest interpreted to be the whole house, and had a fit when he found out that it was only a part of the house (even though there was no shared space). We later found a better classification for our room, and have no issues since. Don’t exaggerate your listing, such as listing it as a 1 bedroom when it’s a studio. People will call you out on it in the reviews.
Surprise and delight. For 5-star reviews, it’s good to give a little extra to your guests. For example, we leave two fig bars and bottles of water in the room (we used to leave two chocolates, until I started eating too many myself). Our soap and shampoo are organic (but bought cheaply from Grocery Outlet). We leave them parking in the driveway if we are out of town or if they arrive late at night. We try to accommodate special requests when possible, like early check-in or to borrow a phone charger, but we’re not afraid to say no when we can’t.
Leave good reviews. When you review your guests, overlook the small stuff and give them good ratings unless something is really wrong. We have only given negative feedback a couple of times, and always try to do it privately to educate guests on standard Airbnb etiquette rather than shame them. Most of our guests have left us great reviews in return.
If you get a bad review, don’t stress. See if there is anything that you can improve for future guests. If not, is there anything you can change in your listing to make it more clear for future guests? Whatever you do, don’t write a long defensive response to the review, as this will just call attention to it and make you look like a bad host.
Next Steps: Get Started Now!
If you have a space that could be an AirBnb, it’s worth starting it right away. Every week you delay is $100s of income! If I had started Airbnb when I first bought my house five years earlier, I’d be $125,000 richer!
While we currently have only one room as an AirBnb, I am working to convert the rest of my house to AirBnb for when I travel. Renting out that additional space could pay for my whole trip!
Do you have any experience or advice as an AirBnb host? Please share.
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