My Experience Hosting for Airbnb (and other short-term rental systems)
What do I know about Airbnb hosting? Well, I have stayed in several Airbnbs.
I’m joking, that doesn’t give me any credibility. My hosting journey actually goes back two years, and I've received 47 5-star reviews (and not a single review that wasn't 5-stars) while earning extra income through Airbnb!
I have been renting rooms out of my house on Airbnb ever since getting stationed in San Diego. I have become an experienced host in that time, but it always frustrated me that I had to know what questions to ask about beginning a hosting journey.
There weren’t any complete guides to Airbnb hosting when I started. For that reason, I decided to compile a list of everything I wish I’d known when I first started.
This guide will tell you everything you need to know to start out, even if you don’t know what you don’t know yet.
Oh yeah, and I own 13 long-term rental units at the moment, amongst many others that have come and gone.
Is Airbnb Hosting for you?
The first thing I need to let you know is that short-term rentals, such as Airbnb hosting, take more work than long-term rentals do.
You will be required to build systems and hire cleaners, managers, etc. if you want this to become a passive income source.
That being said, Airbnb hosting can be very lucrative!
I have made over $2,300 in a single month renting out a bedroom/bathroom and sharing the living room, kitchen, and garage.
Granted, I am renting this room out in north San Diego County. But I’ve only been doing it for a few months, and still, even have some kinks to work out!
Airbnb is not for you if:
- You aren’t willing to put in a little work, at least until the systems are in place.
- You can’t stand the idea of strangers in your home.
- If you can’t be a good host.
- You have little kids (if you’re renting a room, kids may get you poor reviews depending on noise levels).
Airbnb hosting might be for you if:
- You understand it may take a little work to get off the ground.
- You’re willing to learn/build new systems.
- If you want to turn a room or two of your home into an income machine.
- You don’t mind having strangers in your home.
- You’re okay with fluctuating monthly extra income.
There is a myriad of reasons why short-term rentals might be a great (or terrible) fit for you, but if you keep reading, I guarantee you’ll know by the end of this article!
Click here to register as an Airbnb host and earn $50 extra on your first hosting.
What Do You Want to Get Out of Hosting?
Basically, you need to sit down and figure out what you want to get out of hosting a short-term rental. That way you can ensure this first listing is a step in the right direction!
Airbnb Hosting Strategies
As with long-term rentals, there are many different strategies you can choose to utilize.
There is a way to make money with Airbnb no matter your living situation, and you can experiment with several of these to see which is the best fit for you.
Vacation Rental by Owner (VRBO) existed long before Airbnb and is actually where online short-term rentals began. They are a good platform too, and as you’ll see later, I recommend you utilize both for your rental.
Back in the day, it cost a fortune to own a vacation home. Now, you can rent it out 90% of the year and stay in it 10% of the year. Imagine owning a vacation home that literally pays for itself. The vacation rental strategy is a great method to turn your summer/winter vacation home into an asset. The days of empty vacation homes, when you're not staying there, are gone!
It might even be cash-flow positive when you’re not living there!
Spare Bedroom / Accessory Dwelling Unit (ADU)
This is what I’m doing at the moment! The best part is that you don’t even need to own the property for this.
I got my landlord to agree to me renting a room out on Airbnb while I rented their home. Now, I don’t want to make this sound easy—I emailed at least 30 (probably closer to 50) landlords before I found one who was okay with me doing this.
That being said, I pay $3,000/month for my home, and renting only one room has resulted in as much as $2,300/month!
I’m about to open a second listing for my property and rent an upstairs bedroom/bathroom as well…after that, I should be getting paid to rent a brand new home in San Diego County!
For this strategy, you need to be okay crossing paths with your guests and having conversations with strangers in your home. I have found that a lot of them enjoy talking with me and are actually pretty cool!
Rental arbitrage is the idea of renting a home and then renting the home on Airbnb. This is different from the above strategy because you’re renting the entire home rather than just one room in your home.
The beauty of this strategy is that your landlord is still on the hook for maintaining the property, so all you do is pay rent and operate the short-term rental!
Again, you need to be upfront and honest with your landlord about this. Some of them are cool with it and some aren’t, but it definitely isn’t worth hiding.
My friend and podcast guest, Julian Sage, is a master of this and has a platform full of educational content. He also has some wonderful investment opportunities you can check out!
Unique Destination / Experience
Airbnb hosting now allows you to guide experiences too. If you’re a skydiving instructor in the area, you could advertise a skydiving experience on Airbnb for people to buy. The best part is they don’t even have to be staying at your listing to take advantage of this…can't complain about more advertising!
There are some unique destinations on Airbnb as well. I have seen tiny-homes, RVs, houseboats, themed homes, treehouses, etc. You are only limited by your imagination, as long as the listing is safe.
There are so many ways to piece these various short-term rental strategies together in order to come out on top. Have fun, be creative, and find the strategy that works best for you!
Before You Even List on Airbnb – Getting Started
Now that you have decided to give Airbnb hosting a shot and chosen the strategy that appeals to your situation most, let’s get started!
Are you Breaking the Law?
Before you do anything else, verify that your short-term rental is legal!!!
I cannot stress this enough. If you live in New York, I’m sorry but it most likely isn’t (as of this writing).
To discover this, I would talk to other investors in the area and see what the word on the street is. Then, you need to check with your city, county, homeowner’s association (HOA), your landlord (if renting), state, or anyone else who might have information on the matter and ensure you are in the clear.
In Hawaii, for example, there are several zoning codes that do not allow short-term rentals. If you’re caught Airbnb hosting in these areas, there is a hefty fine you will be forced to pay.
Honestly, that find may be worth it if you’re making enough money, but that is a decision you need to make.
Just do your homework and verify that you aren’t going to be penalized.
What's The Time Commitment?
The time commitment for managing your Airbnb can vary drastically based on several factors.
Are you managing your Airbnb yourself or hiring a property manager?
Is the Airbnb listing in your house or on the other side of town?
How long are your average stays, and how much time do you give yourself between stays to clean the rooms?
Do you have any desire to interact with guests while they are staying, or will you remain completely hands-off?
hosting a short-term rental is inevitably more work–and a larger time commitment–than managing long-term rentals is, but you can also make a lot more money doing it. That being said, you can still mitigate the amount of time you spend involved in the hosting process!
Basic Room Setup
Now you need to set up your rental space!
You want to make a good first impression, so you need to have a clean, picturesque room. I see pictures on Airbnb sometimes in which the room(s) appears cluttered, dimly lit, and just yucky. That is NOT how you want your rental to be represented.
If you aren’t a designer by nature, check out Modsy, which will design the layout of your space for as little as $79!
The basics for a room should be a bed, closet, bedside table, and some subtle decoration(s). For example, I have a simple art piece above the bed that is literally just a picture my wife got mounted on poster board. Then we put two old end tables in and some simple beach-themed stuff scattered around.
Having a television in the room is great too. But I have a really nice setup with 200+ channels in the living room, so I didn’t put a TV in the bedroom. A dresser isn’t necessary either because most of your potential guests are traveling with suitcases.
We got the mattress from a friend for free. All in, this setup was probably less than $300 because we already owned most of the stuff. We spent less than $150 to set this room up, and it is earning me over ten times that amount monthly!
Also, you need to keep all common areas clean and think of some ways to make them feel like home. For example, I like to provide coffee for my Keurig for my guests.
Here is a complete list of items I leave out for guests.
Don’t forget that simple and clean is the name of the game for most successful Airbnb rooms. There are some themed exceptions, but you need to know what you’re doing if you plan to do a themed listing.
Airbnb hosting is often like glue…less is more!
Click here to register as an Airbnb host and earn $50 extra on your first hosting.
You Are Inviting Strangers Into Your Home – Make Sure You Have A Compelling Profile
Do you want creepy, dirty, smelly people living in your house?
Neither do your guests!
Your profile needs to radiate great things about you! Post a professional headshot, short bio, and make sure you get verified.
Link your Airbnb account to your Facebook account to allow potential guests to see how many friends you have, confirming that you are a real person. You can (and should) also confirm your mobile number so that guests can reach you. Both of these simple tasks will help your ranking.
You may not think these things matter, but I promise you that perception is reality. If you have a clean, concise profile with a good-looking headshot, people will feel more comfortable booking your space.
Get Great Pictures for Your Airbnb Rental – Hire A Professional Photographer
If you don’t think it is worth the money to pay for a professional photographer, go look at some short-term rental listings in your area. I’ll wait.
I would show you my original pictures, but as soon as I saw them next to the professional photos, I deleted ALL of them…yes, there was that big of a difference.
I thought I had done a decent job taking pictures of my place, but after seeing the professional photos I would give myself a solid 4/10 haha.
Luckily, Airbnb has a brilliant program that takes care of this for you. When you begin Airbnb hosting, they will reach out to you and offer to hire a professional photographer on your behalf. They will pay for this photographer out of your next listing income, which is super convenient because you don’t even need to worry about billing!
The one downside to this is that Airbnb technically owns the rights to these photos. So it may be worth hiring a photographer outside of their platform, but I’m happy with the service they provided.
Bottom line: clean the house, open the windows and bring in a professional to photograph your listing for the world to see.
My friend has the most comprehensive Vacation Rental Machine (FRM) Formula course for making money with short-term rentals, check it out!
Best Listing Practices
Now that the basics are taken care of, let’s dig into some best practices to make your listing more appealing and successful.
Accurate Listing Details
Be honest about any downsides and price accordingly…you will still get guests!
All of the information, including your room type, features, hazards, and any habitability issues should be 100% accurate.
Don’t try and hide the negatives or you will get bad reviews.
Also, be honest about your availability. Don’t say you’ll be on the property if you won’t and vice versa.
The bottom line is this: be open and honest about EVERYthing on your listing!
I like to be transparent, so this is my current listing for you to look through.
There are a ton of options you can select for amenities in both the Airbnb and VRBO hosting sites. It may take a little while, but ensure you go through them thoroughly. You want to take advantage of advertising every single amenity you offer.
Some examples of great amenities to have are a Keurig (with K-cups provided), shampoo/conditioner, towels, dishes, internet, cable TV, HVAC, etc.
Anything you can think of that would make the stay feel more like a home, needs to be listed here.
Your goal should be to combine the best amenities from a hotel and the best from your home to create an unforgettable experience for your guests!
Please note that if you mention amenities on your listing, your guest expectations will be to have those amenities. Don't mention anything that you don't actually provide, or it could hurt your reviews later.
I recommend creating a guestbook for your visitors. Guestbook, in this case, is not the traditional book people sign, as much as a welcome booklet. Airbnb calls it a guestbook and has a way for you to do this on your listing, but I make a physical copy too.
My guestbook is just a laminated paper that showcases the best restaurants, tourist attractions, hikes, etc. in the area. I also list my Wifi name/password, amenities, instructions, and any other information that could make the guest stay more comfortable.
Verify the Map is Accurate
Do NOT forget this step!
My property is so new that the address doesn’t show up in Google Maps yet. For this reason, Airbnb and VRBO are unable to locate my listing on their maps.
After typing in the address, I had to manually move the “location dot” on the map to the proper location. Even still, I wasn’t confident people wouldn’t end up in the wrong neighborhood, which in my case is a 55+ retirement mobile home park 3 miles away, hahaha.
My easy solution is having a saved message I send immediately after any potential guest has booked with me.
This simple message gives them a direct link to my home, along with the code for them to access the property. By sending this right away, I know there shouldn’t be any issues locating or accessing my property.
Even still, I have had one guest go to the wrong location. But they quickly realized the mistake and admitted it was their error and not my fault…I still got my 5-star review!
Be diligent here and don’t assume people will know what you mean. Break down the directions as simple as humanly possible. If they don’t understand, they will not be happy, and ultimately your review could suffer.
There are so many ways to go about setting up an Airbnb. Here are my recommendations for this portion of your listing.
Duration of Stay
For starters, you need to decide the minimum/maximum number of days somebody can stay. I started with a three-day minimum stay but have since moved to a two-day minimum stay.
I've debated allowing people to stay for only one night, but that could get annoying since I clean the house myself. I would also worry about locals wanting to use my home for a quick hook-up, and that isn’t my idea of fun as a host.
Check-out / Check-in Policies
I set my check-out time at 1100 because that is standard for hotels and seems reasonable.
My check-in time was originally set at 1400 so that if I had a check-out/check-in on the same day I could clean during my lunch break.
This worked great until I had a guest still in the house cooking lunch when I got home at noon. They said “Oops, we missed the 11:00 check-out time, but we will be done soon,” like it was no big deal. This is after they asked if they could check out late the day prior, and I told them, no, giving them the reason.
The solution I came up with was adjusting my check-in time to 1800. An 1800 check-in time allows me to clean during lunch and/or after I get off work in the evening.
This may not matter as much if you hire a cleaner, but make sure your check-in and check-out times fit your schedule.
Also, you can put a “no later than” for check-in time. I personally don’t care if they check-in after midnight because I don’t have to be awake when they check in. However, if you advertise that you will be present at check-in, ensure you set a limit. That way if your guest is late for check-in, they won't expect you to be there greeting them.
Update Your Calendar
I recommend that you set a limit on how far out people can book a stay with you unless you are certain that you will still be hosting and that there will be no conflicts.
For example, I almost had somebody book a three-month stay for next summer (7 months out). That would not have worked for me because my extended family is planning to visit. We haven’t chosen dates yet or I would have blocked them off already.
Now I have my account(s) set up so that people can only book a room three months in advance. That gives me time to ensure I have dates blocked off and will also ensure I don’t have people book a stay after I plan on moving out of this rental.
If your rental is going to be unavailable, be sure you block the dates ASAP!
*Side note* If you block off November 23rd because you are out of town, a guest can still book through the 23rd as their check out date. I learned this the hard way and had somebody book my listing so that they checked out after I had already caught a flight that morning (oops)…so if you need an entire day blocked off, block off the day prior as well.
Sync Your Calendars
If you list your rental on multiple platforms (which you should), you need to ensure the calendars are synced. Imagine if you had to block off dates on Airbnb every time somebody booked a stay on VRBO…that would be a mess, and inevitably two people would book overlapping dates at some point.
Thankfully, both Airbnb and VRBO allow you to sync their calendars together!
For VRBO hosting, log in to your listing, click on “Reservations” under the calendar dropdown box. Here you will see an import/export dropbox. You need to import the Airbnb link (see next step) here, and then copy the export link.
Log in to your Airbnb hosting calendar and click on “Availability Settings”.
Here you will need to import the link you copied from the VRBO calendar and then copy the Airbnb export link in order to paste it in the VRBO calendar.
At this point, you should have copied the “export calendar” link from each hosting service and pasted it into the “import calendar” section of the other hosting service. Congratulations, your calendars will now talk to each other.
When somebody books a room through Airbnb, it will automatically block those dates off in VRBO and vice versa!
If you want to step into the big leagues, you will need to upgrade to a full-fledged channel manager like Lodgify.
I recommend Lodgify because it is very affordable and allows you to sync Airbnb, VRBO, Expedia, Booking.com, and several other platforms. You can also integrate Mailchimp, Google Analytics, Zapier, and more! Not to mention that Lodgify gives you templates for creating a direct booking website for your rental, which is much more professional and SEO-friendly.
I recommend Lodgify to anybody who is planning to utilize the short-term rental game long term.
Get a free 7-day trial of Lodgify today!
There are several house rules that Airbnb standardizes, such as suitability for children, infants, or pets, smoking, or hosting events (parties). For these five rules, you can simply check the yes (or no) box.
Other than that, there is an “Additional Rules” section, where you can essentially make up any rule you wish. Here are the house rules I recommend you consider the setting.
- Proof of ID is required for booking.
- Please remove shoes when entering the property.
- This is a self-check-in property. You agree that you are willing and able to follow the directions messaged to you and will not contact the host without first referring to these messages.
- No extra guests or pets without prior consent (modify if you allow pets).
- No parties or events without prior consent (maybe you’re cool with this).
- Excessive noise is subject to cancellation (probably not an issue if your home is in a private area).
- Quiet hours are enforced from 10 pm-6:30 am.
- Zero smoking or drugs in the unit.
- Guest is responsible for cleaning up biohazards.
- Any cleaning guidelines/rules you would like to enforce.
- Locals must contact me before booking (Thanks for the recommendation, Julian).
- Anything else about your property you deem necessary for the guest to know.
It is important to note that if your potential guest doesn’t adhere to the rules and you cancel on them, it could still hurt your rating/review, but at least you can annotate why it happened.
Let’s use rule 11 from above as an example: a local, books a room without contacting me and it appears they are trying to play hanky-spanky with a date in my house. I can cancel the booking, which will still count as a cancellation, but I can leave a comment on the event that allows others to see why it happened.
Don’t get TOO crazy or restrictive on these rules, but make sure you are covering your A$$ too. Take a common-sense but thorough approach to your house rules, and you’ll be good to go.
I find that these rules help to set your guest expectations when they are looking at your property. It is much better to manage these up front, than it is to send a message with additional rules after they have already booked their stay.
Get Pricing Right from The Beginning
Start with a low price in order to get some quick stays and 5-star reviews!
When you first start, Airbnb will recommend that you discount your nightly rate in order to encourage more bookings. I recommend that you do this, because the faster you can get some guests in your home and gain (hopefully) 5-star reviews, the better your rental will perform.
You want to become a “superhost” as quickly as possible (more on that to follow).
Know Who You're Competing With
You need to know what the other Airbnb's in your area look like. What are the essential amenities you need to be competitive? What is their price point? Are they full homes, or shared spaces?
In order to become a competitive listing you need to know what your competition is doing!
I highly recommend using a dynamic pricing company like Beyond Pricing.
Dynamic pricing is the model hotels, airlines, and every professional travel company uses…so why wouldn’t you?
When I first became an Airbnb host, I didn’t know the first thing about pricing. I listed my home at $10 less than the places around mine because I was afraid of missing out on guests.
I was leaving HUNDREDS of dollars on the table!!!
Then my friend told me (chastised) about using dynamic pricing to control the price of my rental space. Dynamic pricing adjusts the price of your unit based on holidays, events, trends, and occupancy to find the perfect balance between high-occupancy and high-dollar guest stays.
That means if there is a vacancy a week out, they will lower the price in order to find a guest. But a guest booking two months in advance will pay a higher price. It also means holiday guests will bring you more revenue.
As I write this, I have a guest staying at my house through Thanksgiving. They paid me $55/night because I didn’t have a dynamic pricing setup when they booked. Dynamic pricing recommended over $100/night through Thanksgiving, and I missed out on that money.
Beyond Pricing charges, 1% of any guest stays that occur while using their platform. This is wonderful because I’m making at least 10% more per month since I started using them. That isn’t including a Christmas booking that is double the price I would have had it listed at!
Seriously, don’t be silly. Start using dynamic pricing today!
Guest Interaction Before Arrival
The guest interaction is HUGE! In fact, if you are unable to respond quickly to messages, then you need to look into a platform like Hospitable in order to automate messaging as much as possible.
First Impressions Matter!
You need to ensure that all of your interactions with potential guests before they arrive (and throughout their stay too) are professional. First impressions matter with everything in life, and that is especially true in the hospitality world–and Airbnb hosting is no exception!
I cannot tell you how important this is. If you fail to respond to messages quickly, they will book with somebody who does. When I first started hosting for Airbnb, there were several times that the potential guest had already booked with somebody else by the time I responded.
I have also had people book with me and one of the first things they say is “Thank you for getting back to me so quickly.” To me, that says I got the listing before somebody else simply by responding fast!
Currently, I work in a secure vault, so there are no cellphones allowed inside. I now make a conscious effort to check my phone every hour or two just to ensure that I’m not missing potential bookings.
Systems are the name of the efficiency game. I have a rule of thumb that if I find myself sending an email for the second time, I save it as a template in my Google Drive.
Similarly, if I have to answer the same question more than once in Airbnb/VRBO, I save it as a messaging template.
Remember the welcome message I posted above with directions to my house? That was the first messaging template I ever created.
Hospitable allows you to fully automate messaging and even has artificial intelligence (AI) to answer new questions without needing your assistance. I will absolutely utilize them when I am managing more than one listing.
Guest Interaction During their Stay
This will vary based on your personality and the type of short-term rental you’re hosting. For example, I wouldn’t expect you to greet your guests at home if you do not live on-site, but some people do.
Sometimes I greet my guests upon arrival, but other times I stay out of their way unless we cross paths in the kitchen. For me, this really depends on the vibe I get from them while messaging.
Some guests really enjoy talking to the localhost and getting the “inside scoop” about what to do in the area, while other guests would prefer not to even see you.
Feel your guests out and interact as much as makes you (and your guests) comfortable. Ultimately, you want your guests to feel as welcomed and “at home” as humanly possible.
Live by the golden rule “Do unto others as you would have them do unto you” and focus on being a good person. If you do these two things, I’m confident that your guest interaction will be top-notch!
How Do I Become A 5-Star Airbnb Host?
5-star reviews are extremely important to the success of your listing. For that reason, you should go the extra mile to earn a 5-star review, even when it isn’t convenient.
For example, I mentioned above that I had a guest book a stay at the house that ended on a date I thought had been blocked off. That guest was going to check out after I had already left on a flight, and I wasn’t going to be home in time to clean prior to the next guest arriving.
I explained what had happened and asked if he would be okay staying in the upstairs bedroom, which only has my kid’s twin mattress on the floor, as opposed to the queen bed downstairs. I explained the reason behind this, that I wouldn’t have time to clean the queen bed after he left. Luckily, he was cool with this and pretty understanding.
Understandably, this was not the way I wanted this listing to start off. To ensure I still got a decent review, I left him a thank you card with $20 inside of it when I left that morning. That “~20% discount” was the icing on the cake that allowed me to keep my perfect 5-star record!
Remember that in the short-term rental hosting business, it is better to be kind and helpful when arguments/issues arise than it is to be “right.”
Here is a full article about how I have managed to receive nothing but 5-star reviews over the last two years, hopefully, this will help your hosting journey start on the right foot!
Be a Good Person
You want to be an unforgettable host. Every guest will have a different perception of what the “perfect host” looks like, so put your best networking skills to work.
Build rapport with your guest(s) by finding common ground to talk about. That could be as simple as the clothes they are wearing or the electronics they’re using. It could also come from conversation. Maybe you have been to the city they came from. Whatever it is, just find something in common with your guests and make light conversation with them about it.
Match and mirror your guests by subtly mimicking their gestures when talking. If they fold their arms, subtly fold your arms within 30-60 seconds after noticing it. This will subconsciously help them to like you more.
Be a good person. I say this all the time because it is so important. Put your needs aside and focus on being nice to your guests, no matter what.
Here are a few ideas of things you can set out for your guests upon their arrival in order to start their visit on a great note!
- Snacks and a nice note
- Metro card
- Map of the area
- You can also ask your guests to have breakfast or a meal with you
A little bit goes a long way in terms of making your guests happy.
All of the above advice is great, but it doesn’t negate the fact that Airbnb requires more work than a traditional long-term rental does.
Airbnb hosting is completely manageable in your spare time, but you need to prepare ahead of time for the worst-case scenarios…be proactive versus reactive.
If you have a third-party website that you use for booking, have some friends leave great reviews about you when first starting out. Even if they didn’t stay with you, it will build credibility for people on your site. Then, as you get more authentic reviews, replace the original ones.
The Rule of Three
One is none, and two is one. Have extra sets of bedding and towels on hand. I have a washer/dryer on-site and still maintain two sets of bedding for each bed, as well as two sets of towels for every guest. If you do not have a washer/dryer on-site, I would recommend that you maintain three sets of everything. That way you have one for use, one for backup, and one at the cleaners or on standby.
You ALWAYS want to have a clean, backup set of sheets and bedding…just in case.
Prepping for Arrival
In preparation for your guest’s arrival, ensure the listing is clean (including shared spaces), illuminated, and smells good. The first things your guest will notice are how the listing looks and smells, so make sure you have candles or Febreze on hand to freshen up the area.
If you are going to layout a snack, bottle of wine, note, or some other gift for your guest, make sure you have done it prior to their arrival.
Verify once again that you sent the welcome message/directions to your guest in order to avoid confusion.
Don’t forget to layout your guestbook either!
I don’t use professional cleaning services (yet) for my Airbnb. I haven’t needed to yet, because my check-out and check-in times are set around my work schedule so I have time to clean.
However, I am still able to charge a cleaning fee, which is great because I’m effectively paying myself to clean the listing.
I haven’t discovered the magic wand that allows me to find a great cleaner yet. I’ve had some luck finding affordable cleaners through Craigslist, but they were not extremely reliable. On the other hand, finding professional cleaners online isn’t difficult, but they are not cheap enough for me.
Another option could be a service like Turnoverbnb which is a website that syncs to your calendar and automatically schedules cleaning for your guest’s check-out window. I haven’t used them yet because the cleaners they recommended were more expensive than I wanted to pay. That being said, those prices were reasonable if I were renting out the entire home.
If you have time to clean the place yourself, it is a great way to make some extra money from every listing and simultaneously cut your expenses.
Creating Airbnb Hosting Systems
You need to create systems as quickly as possible in order to streamline your Airbnb hosting adventure.
The first thing you need to do is set up is the booking settings in order to ensure there is time for you to complete the turnover between stays.
In the military, every billet has a turnover binder. This binder is meant as a guide that you could hand the new guy, and they would be able to execute the job correctly, with only the guide as a reference. You don’t necessarily need to create a turnover binder for yourself, but document what you are doing well. That way you can use it as a training material for an assistant one day.
Create an Airbnb host checklist for repetitive tasks. Airline pilots use a checklist for everything they do. This ensures there will be no overlooked steps in their processes. I have a checklist I use prior to every podcast recording, YouTube video recording, and many other seemingly simple things. You would be amazed how many times that checklist has saved me from recording without turning on my external microphone.
Every month you will feel a new friction point or think of another way to streamline things. When that happens, put it into place immediately. Don’t put off an hour of work now if it will save you a half-hour every month going forward.
The ability to systemize will save you a lot of time going forward in life.
Labels are wonderful.
I used labels on the key(s) for my listing, laundry room organization, cleaning supplies, which remote goes to which device, etc. You could even go so far as to label your drawers/cabinets in the kitchen if you wanted to.
The beauty of labels is that they will answer your guest’s questions even when you’re unavailable to do so yourself.
You need to systemize messaging as much as possible to ensure guests don’t get lost or confused during check-in. A good rule of thumb is to create a template anytime you send a message more than once.
If, for example, your guest asks about the parking situation and you’ve got the same question before, create a template. That way when you get asked in the future, you already have the templated answer saved.
As mentioned before, communication is the most important thing for you to do prior to your guest’s arrival. It is critical that you are able to communicate quickly and accurately in order to make their check-in as smooth as possible.
What Does Airbnb Expect of Hosts?
There are a few things Airbnb expects their hosts to provide for their guests. These include safety, security, and reliability. If you adhere to these guidelines, you will be well on your way to Superhost status! All of these can be boiled down to my favorite phrase, “Be a good person.”
- Do not harm yourself or others.
- Don’t threaten anyone.
- You shouldn’t be creating hazardous situations.
- Keep a first-aid kit on hand.
- Keep a fire extinguisher on hand.
- Maintain functioning smoke/carbon monoxide detectors and ensure your property meets government safety guidelines.
- Make sure the listing is safe for children or declare that children are not welcome.
- No theft, vandalism, or extortion.
- No spam, phishing, or fraud.
- Don’t violate others’ privacy or intellectual property rights.
- You must disclose cameras, and they cannot be in private areas like a bedroom/bathroom.
- Absolutely no discriminatory behavior or hate speech
- This host didn’t pay attention and got fined heavily.
- No bullying or harassing others
- Don’t disturb the surrounding community.
- A. GOOD. PERSON!
- No misrepresenting yourself
- Don’t misrepresent your spaces (as discussed above).
- Don’t treat experiences as just a transaction, but a place for others to belong.
- Provide inhabitable spaces.
- Clean, maintained, and with all necessary utilities
- Don’t cancel on your guests.
- Respond to messages for your guests (communicate).
- Consistently low ratings can result in your listing being removed.
Become a Superhost
A much sought-after reward for any Airbnb host, the Superhost badge is a privilege granted to those who go beyond simply offering a space for people to stay and fully take on the role of being a host. There are four boxes you need to tick, which are evaluated at four intervals during the calendar year:
- At least 80% of your reviews have to be five stars. This translates to a 4.8-star average review.
- You must never cancel a reservation made by a guest (less than 1% of the time).
- Must respond quickly to questions (within 24 hours), and you must have a response rate of more than 90%.
- You must host at least 10 Airbnb Trips, which includes offering Airbnb Experiences.
There is no minimum tenure to become a Superhost. You must simply meet all the criteria by the assessment period (every 3 months). Do this, and you can earn Superhost status.
Every quarter, Airbnb checks whether or not you’ve met the Superhost criteria. They will look over your last year as an Airbnb host to review your performance.
Cancellations That Won’t Disqualify
The Airbnb host requirement for no more than 1% cancellation rate is pretty strict. Luckily, there are situations where Airbnb will not count a cancellation against your percentage. All of these will require proof (documentation) in order to verify that you aren’t just making excuses.
- Death of the host, guest, co-host, additional guest, immediate family member, or caregiver
- They will require a death certificate, obituary, or police report naming the individual.
- Unexpected illness or injury (affecting a host or member of the traveling party)
- They will require a physician’s note, confirming the illness/injury (dated after the trip was booked).
- Government-mandated obligations: jury duty, travel restrictions, court appearances, MILITARY DEPLOYMENT!
- Yes, that means you can cancel all of your books if you are suddenly deployed (with official orders).
- Unforeseen property damage, maintenance, and amenity issues to the Airbnb listing that make it unsafe or prevent guests from accessing basic amenities like running water
- These cannot be planned renovations.
- Transportation disruptions that make it impossible to travel to your destination
- Train, bus, or ferry cancellations where no alternate trips were available on the same day
There are also some circumstances that require special review in order to confirm that you were directly affected and are therefore excused from the cancellation penalty.
- Open Homes reservations
- Natural disasters, terrorist activity, and civil/political unrest
- Endemic disease or illness
- Travel restrictions
- Safety and security threat advisories
- Essential utility outages
- Changes to visa or passport requirements
Here is more information on these extenuating circumstances.
The Airbnb Plus program has eligibility requirements for hosts and their homes. Superhosts will automatically meet the Airbnb host requirements. Airbnb Plus gives you a higher placement, and better visibility so that you will receive more bookings. It also helps build trust with your guests, and allows for a virtual tour of the property!
Each Plus home must meet standards for being thoughtfully designed, well-equipped, and well-maintained. Airbnb Plus is available to private rooms and entire homes, provided they meet the program standards.
If you’re a Superhost and Airbnb Plus is available in your city, they might send you an invitation to the program. If you accept the invitation, there will be an in-person home visit to go through a checklist in order to ensure you meet the standard for Airbnb Plus.
What If There Is Property Damage?
As with all real estate investments, it is better to protect against the downside with insurance. Airbnb provides insurance for every host, but I believe it is worth getting some additional insurance too.
Homeowners' insurance policies generally carry a “business activity exclusion”. In other words, any claim involving a “business activity” could rightfully be denied. Since Airbnb hosting is considered a business activity, homeowners' insurance isn’t going to cut it for you!
The Airbnb host protection insurance program provides primary liability coverage of up to $1 million USD per occurrence, in the event of third-party claims of bodily injury or property damage.
The program covers certain property damage in common areas. Landlords are also covered in certain cases when claims are filed against them due to a guest suffering an injury during a stay or if a guest damages building property.
Things Airbnb doesn’t cover include but are not limited to:
- Property damage due to things like pollution or mold
- Damage or injury from something done intentionally (not an accident)
- Loss of earnings
- Loss (theft) of items in your home
Proper Insurance is a company specifically designed to insure your short-term rental. It will replace your homeowner or landlord policy and includes personal liability insurance, which covers issues that you inadvertently cause.
They also carry $1 million/$2 million commercial general liability, which would suffice as the underlying policy for a commercial umbrella policy. Proper sells commercial umbrella policies too if that interests you.
VRBO recommends Proper insurance as its preferred vendor for comprehensive vacation rental insurance in the U.S.
Proper has an A+ rating with the Better Business Bureau (BBB), with only one complaint on file in the past three years. (source)
Renter’s insurance is the missing link to cover your personal property against things like fire and theft. I have held a renter’s insurance policy from USAA for years. Honestly, you should have one no matter where you live. I even had one when I lived in the barracks just in case somebody had stolen my crap.
There is an inherent risk with letting strangers stay in your home. Make sure you have renter’s insurance to cover your valuable possessions in case they “disappear.”
Tax Implications from Airbnb Hosting
You must pay taxes on the income earned through Airbnb. I know it’s a drag, but that is the way life works. That also means you get to write off business expenses to offset your income!
According to Taxact, “You must report income and expenses from Airbnb rentals on your tax return if you do the following:
- Rent your house out more than 14 days in a year
- Live in the house for more than the greater of 14 days or 10 percent of the number of days you rent the home.” (source)
Airbnb will report gross earnings for all US hosts who earn over $20,000 and have 200+ transactions in the calendar year. If you exceed both IRS thresholds in a calendar year, Airbnb will issue you a Form 1099-K.
Apportion mortgage interest and taxes if you only rent out rooms of your house. If you only rent a room out of your house, you can still deduct business expenses. You cannot, however, deduct 100% of your interest/taxes because you still live there.
You need to figure out what percentage of your home is Airbnb hosting space, and what portion is your living quarters. For example, a 2,000 square foot home that rents out 500 square feet to guests would be able to deduct 25% of their expenses such as interest, taxes, utilities, etc., that are billed for the entire home.
You can deduct 100% of your host fees from Airbnb, Beyond Pricing, and other support services related to your hosting business.
Don’t forget to verify your state and local government-imposed taxes for short-term rentals. I know Hawaii has a transient accommodations tax of 10.25%, for example. You need to ensure you do some homework on your area and confirm what tax requirements you will need to meet in addition to the federal tax requirements.
The Cost of Doing Business
Airbnb hosting requires a decent amount of upkeep. You must continuously restock toilet paper, paper towels, shampoo/conditioner, coffee, and other amenities. That being said, the cost of upkeep, once your listing is furnished, is fairly negligible compared to the income generated by guests.
When someone books your room, Airbnb charges a standard host service fee of 3% of the listed price. This can increase up to 5% depending on the cancellation policy you choose. For example, if you set a cost of $100 for a room per night and someone stays a single night, you will receive $97 and Airbnb will receive $3.
Airbnb also charges a guest service fee to the person who rents the space. This is between 5% and 15% depending on several variables, such as listing details and duration of their stay. This fee only affects the guest and not the Airbnb host.
How Do I Earn Money On Airbnb?
For a new host, there is a 30-day buffer in place before the first payment can be made. This means you will have to wait 30 days to get paid. However, after 30 days, you will only have to wait the standard 24 hours for payments to hit your account.
However, even after Airbnb has made the payment, other elements can delay the process (such as weekends or public holidays, or other processing delays). Processing delays will occur for:
- ACH/direct deposit: up to 3 business days
- Bank transfers or international wires: 3-7 business days
- PayPal: 1 business day
- Western Union: 1 business day (US Pacific Time)
Pro Tip – Stay at a Few Airbnbs
Every host is different, and staying at a few Airbnbs could help you come up with creative ways to improve your listing. For example, I stayed somewhere once that left a bottle of wine next to the bed for us.
You may also learn a few things not to do.
You’ll probably save money too! It is pretty easy to find Airbnbs that are more affordable than local hotels. And, you can have multiple people crash at the Airbnb with you, due to it being a full house.
When I attended the 10X Growth Conference in January 2019, we had nine people crash in a 3/2 house.
For the record, I didn’t book this listing, so I don’t know if we went over the host’s allowable occupancy. I definitely don’t recommend violating the hosts’ policies, as they have the right to ask you to vacate the property.
That being said, we all saved a FORTUNE on Miami-priced hotel rooms and had way more fun crashing together.
We drank beer, talked about real estate, and networked late into the night. I even recorded three or four podcast episodes in the backyard!
Personally, I prefer to stay in a local short term rental whenever I travel somewhere. I also prefer Airbnb hosting to just having roommates for several different reasons. I absolutely recommend you try hosting a short term rental, whether that is Airbnb hosting, VRBO hosting, or any other platform!
My friend Julian has finally launched his Airbnb Mastery course! Julian is a young, enlisted Coastie, who is absolutely crushing it hosting for Airbnb, and teaching others to as well!
If you liked this breakdown of Airbnb Hosting be sure you check out our other popular investment strategy breakdowns like: Wholesaling real estate!