If you’re looking for more opportunities to make money, then investing in an Airbnb rental business is something worth looking into. In fact, now may be the perfect time to do so. You may be surprised to find out that a lot of big names like GM, Burger King, and CNN were established in the middle of financial turmoil in the US. Starting a business amidst an economic downturn forces entrepreneurs to be tougher and more adaptable in the following years.
People have been stuck at home for most of 2020, so it’s only natural that most of the world cannot wait to travel again. As borders start to reopen and travel restrictions begin to ease, a lot of people are looking for affordable accommodation options in key areas.
Pre-pandemic, Airbnbs were popular for a certain demographic of travelers for a variety of reasons, like having residential-style lodging as well as being able to live like the local community. In the COVID-19 reality, however, news and lifestyle editor Alesandra Dubin claims that weary travelers opt for Airbnb rentals because when they book an entire home, they have little to no interaction with the staff and other guests.
There’s a delicate balance between necessity and opportunity for businesses in the present day, and you need to find that sweet spot to make your Airbnb business successful. For instance, the costs of starting your own Airbnb business would depend largely on the arrangement you choose. You’ll need to take plenty of things into consideration: Will you be managing the property yourself or will you need a landlord onsite? Is there a year-round demand for your property? What do tourists require from their accommodation during the pandemic? And while we’re still dealing with COVID-19, there are additional costs that go into maintaining an Airbnb, such as:
Updating your property
Your property could be perfect for you, but maybe not for any potential guests. The Airbnb market is highly competitive and you may find that in order to compete with other rentals, you will have to shell out a hefty sum to update some fixtures and fittings. Airbnb Hell founder Dan Weber estimates renovation costs will be about $1,500 for each bedroom and an additional $2,000 to $3,000 for the rest of the house. So give your guests things to write about in their reviews by investing in some basic equipment in your home:
Keyless entry system
This makes it easy for guests to access the rental, and also eliminates the need for you to be onsite to hand over the keys. Speaking of keys, this entry system saves you the trouble of worrying about guests losing your keys and you need to have multiple spares. Depending on the system you use, most systems cost about $100, not including installation fees if you can’t do it yourself. If you own multiple properties, this is something that could end up being an unforeseen expense.
Air-conditioning and heating
With the threat of acquiring COVID-19 in crowded areas, a lot of time is spent indoors. Ensure a comfortable stay for your guests by making sure you have fully functioning air conditioning units. For properties with guests all-year-round, it’s just as important to have a heating system for the chilly seasons. Keep an eye out for energy-efficient units as these could help you lower your electricity bills. Still, you can expect your guests to keep these appliances on throughout the entire day, which could cost you upwards of $5 per day. So make sure you account for this when you set a price for your Airbnb.
A strong Wi-Fi connection is also key to a great stay, especially now that everyone has become more dependent on the internet. Depending on the size of your property, you may also want to consider getting Wi-Fi network extenders so the entire house has internet coverage. The costs of installing Wi-Fi throughout an entire property vary based on your chosen internet service provider (ISP) and location, with some providers offering it for as little as $100, and others offering it for as much as $1,000! Make sure you do your research and shop around for good ISPs before committing to one.
Professional Cleaning Services
There’s a premium on hygiene and cleanliness right now. Airbnb has required hosts to use a list of approved products. However, this isn’t a mandatory protocol. You can opt to use a booking buffer wherein bookings have to be spaced 72 hours apart, to make time for thorough cleaning. If you do decide to hire professional cleaning services, it will cost you around $50 to $70 for a small one-bedroom property. For bigger properties, however, professional cleaners may charge you upwards of $150 to $350. These figures are an average estimate since cleaning fees vary across different areas, and for added costs, you can even get extra services like carpet cleaning and power washing exterior surfaces—what’s important is that you find a company that offers consistent and thorough cleaning.
You’ll have to make the executive decision to choose between complying with Airbnb’s cleaning protocols or losing three days of occupancy.
Being an Airbnb host, you’re responsible for handling both the booking process and handling the property itself. It can get pretty hectic sometimes, so having a management tool that helps you streamline your Airbnb business could be a lifesaver.
We’ve put together our top picks in our ‘The Best Tools to Help Manage and Optimize Your Property’ post, where you can find systems that provide automated messaging and support co-hosting—which makes managing your rental property remotely much more convenient. You can also look through the same write up to find services that help your listing stand out through using SEO optimization. Subscription to these types of services starts from around $18 to $25 a month for one property, but some platforms also offer payment terms on a per collection basis. Once you find out what type of support you need, it’ll be a breeze to look for the right service.
Just like any other business, setting up an Airbnb rental requires you to obtain licenses and permits before you can start operating. There are different laws and regulations in place from city to city. For key tourist destinations like San Francisco and New York, Airbnbs need to be registered at the Office of Short-Term Rentals for $450. Rentals are also capped at 90 occupied days for every calendar year. On the other hand, some cities like Santa Monica require hosts to register to the city’s home-share directory and acquire business permits and licenses, paying the city $2 for each night booked.
So before setting up shop, it’s a good idea to check with your city’s regulations to avoid roadblocks along the way.
At the end of the day, it’s easy to stretch yourself thin when you’re starting a business. And after all your hard work towards revamping your property, you can’t afford to have it just sitting around, so you might want to invest in Airbnb property management service. With a reliable co-host, you can get concierge services, marketing work, guest communication, and management, and even help with running day-to-day operations. We at Cohostmarket share your goals in providing excellent short-term rental accommodations. Our platform is a great way for Airbnb owners like yourself to connect with verified property managers and other co-hosts to help you manage your properties and market your listings This will help you boost occupancy!
There are a lot of things to consider when setting up an Airbnb business, so learn to prioritize and set realistic budgets and timelines. Like any other technology-driven business, smart work, paired with the right digital tools, will help you get your Airbnb business off the ground.
Authored by Riva Julia