Airbnb has revolutionized the tourism industry, both for travelers and for hosts. While your perspective of it will depend on how you have used it, the reality is that it is more like a dating app than a service delivery app. It matches visitors and hosts in what becomes a mutually rewarding relationship.
If you have a vacation home, or even just a spare room in your own home, you may be tempted to list your place on Airbnb. It is a great way to make passive income using an asset you already possess. But you should be prepared for the process.
To make sure you’re ready, carry out these 5 simple checks.
1. The right insurance
The first check you need to make is whether you have the right insurance or not. Chances are you have homeowners insurance. Homeowners insurance is necessary for every person who owns a residential property. But it is not the right insurance for the owner of an Airbnb property.
Landlord insurance covers rented homes, including the property and everything you own within it. It covers you for liability, but does not cover your tenant’s possessions. Most Airbnb hosts require landlords insurance, although it may depend on where in the world your property is.
Check that you have the right insurance before listing it to avoid conflicts with your insurer.
2. Structural integrity
The next check you need to make is to ensure that your property is in good order. The structure needs to be strong – there cannot be any compromised parts of the home. You also need to check the electrical system for faults and the plumbing for leaks or clogs.
If your home has issues that you miss because of negligence, you can cause major damage to your visitors. Your insurer may not pay these claims if it comes out that you failed to do the necessary checks.
3. Features
In order to make money from your listed property, you need to market it correctly. For this reason, you must check that you have assessed all the features. The more features you can list, the more value your listing takes on.
Look at other listings to see what they have included. If you have a sofa bed, you can increase the number of guests that you can accommodate. If you have fast WiFi, entrepreneurs will feel comfortable running their business from your place. If you have a full kitchen, people will be able to stay on a more long-term basis without having to eat only takeout.
Select all the features that you have on the list provided by Airbnb and speak them up in your writeup. Sometimes, people need to be told just how they will benefit from a feature.
4. Reviews
Before listing your place, check the reviews of similar places in the area. You need to take note of what people liked and what they disliked. Take particular note of any common complaints so that you can iron out similar issues before people come to stay at your home.
Bad reviews can tank your ability to make money from your place. Since you are just starting out, a couple of bad reviews can leave you with an extremely low average rating, which will deter most people from even looking at your home.
5. Off-seasons
Airbnb can provide great passive income, but every area has its peak season. At other times, you may get few to no bookings. This will differ from place to place. For example, in a city which is popular with both tourists and businesspeople, the off-season may still bring in a consistent flow of income. After all, people can use your place for a different purpose, although you will probably have to lower your regular price.
A tourist town which no one visits during winter, however, will bring in no income no matter how low you price it at these times. You need to determine how much it will cost to maintain your place during the off-season and what to do in response.
Do the above 5 checks before making your final decision to list your place on Airbnb. It can be an incredibly fruitful source of income, but can also cause you trouble.