The unprecedented growth of the company Airbnb for 12 years of existence attracts even more people who want to make money on short-term rental of real estate. Almost anyone who is able to rent even one room can make progress by renting it to Airbnb. Here can earn not only property owners, but people who have some ability to do business.
The main types of entrepreneurs on Airbnb
- The opportunist. An entrepreneur who becomes the owner only in high season. This is a temporary job for additional earnings.
- The extrovert. This is a person who has a bedroom with little conditions. Such people are attracted to communication with ordinary people. It is important for them to make new friends, and earn a little money at the same time.
- Traditional host. Such an entrepreneur tries to make business safe. He owns one property and tries to establish long-term ties with guests.
- Staff owner of Airbnb. This is an owner of several properties. The business is his life’s work. The entrepreneur does everything to ensure that the work brings income all year round. He approaches all business issues professionally.
- Real Estate Manager. The presence of several real estate objects force the entrepreneur to look for a reliable assistant. This role is assumed by the real estate manager. A businessman hires such an employee for a while.
Tips for setting up a business on Airbnb
The long-term successful activity of the company Airbnb indicates that investing in the rental of real estate is a profitable business. Travelers increasingly prefer home atmosphere to the exquisite comfort of hotels. People want more warmth and attention. And if the entrepreneur manages to create conditions for guests, his business will be successful. Not everyone succeeds. Here are some tips to help make your business thrive.
Detailed business plan
You can’t treat working with tourists irresponsibly. A good business plan is the beginning of a successful start. It should reflect the main solutions for building a reliable business. If you start without a plan, you’ll still have to make one. But then it will be too late. Look for information on the Internet. Consult with friends and acquaintances who have experience in the field of tourism. Highlight important points and write a plan. Show it to knowledgeable people to be sure of its effectiveness.
Knowledge of local laws and taxation
If you decide to find a property for short-term rental in a country or city with which you are not yet familiar, do not rush. Before you start a business, familiarize yourself with local laws and tax procedures. There are cities that have strict bans on the reception of guests of Airbnb. In some places, entrepreneurs are required to obtain a license to do business even for a short time. In some cities, you may be forbidden to leave the place of business. Tax rules vary from country to country.
Choose a favourable location for investment
Once you’ve made a business plan, it’s time to start looking for a suitable place to purchase rental properties. The location of your properties is of paramount importance to get a return on investment. There are places where tourists come all year round. There are conditions for the reception of business travellers. In such areas, the level of demand for real estate is high. Accordingly, the prices are much higher. But practice shows that investing in real estate in such places always justifies itself.
It is not enough to choose a prestigious city. It is important to buy property in a prestigious area. Once you’ve chosen a city, you can use the Real Estate Heat Map to do an analysis of the benefits.
Find a profitable property in Airbnb for sale
You have found a suitable area for investment. Now you have another task: to find a profitable rental property. It should fit your budget. If you are in the UNITED States, use Mashviser’s Property Finder. With it, you will find a suitable object in minutes. After setting the filters, you will have access to ads with the most profitable investments on Airbnb.
Mashviser’s calculator shows several parameters for estimating Airbnb’s profitability:
- cash flow;
- marginal rate;
- employment rate per Airbnb;
- payback period.
To buy a property, hire an experienced agent. This is especially important for aspiring entrepreneurs. It is desirable that the specialist has experience in Airbnb and is familiar with the laws of the area where the property is bought.
Automation of business processes, outsourcing
Airbnb cooperates with the best software providers. They create unique conditions for travellers to get acquainted with the advantages of the company. The hosts regulate most business processes with the help of the software (read more here).
Beginning entrepreneurs to save money try to take on the functions of cleaning, washing and maintenance of rental housing. Subsequently, most of them come to the conclusion that it is impossible to solve all the problems of the rental business on their own. Arrogance in these matters can lead to loss of business. To prevent this from happening, you should find a suitable company to entrust it the maintenance of your facility.
The effectiveness of the business depends on the qualifications of employees. If you have multiple properties, you need to hire an experienced manager. The scope of his activities includes many tasks:
- reception and accommodation of guests;
- booking tickets for events;
- organization of excursions and trips;
- control of service personnel;
- seeing off the guests.
The manager always needs to be aware of all the events taking place at the facility. The future fate of the business depends on the effectiveness of his work.