13 Things to know before you start an Airbnb
Most people who list on Airbnb have what we call STRs.
STR (Short Term Rental) – based on where I live, it’s when you rent out your place for 28 days or less.
Before you start an Airbnb, please ensure you have done your background work:
Background: Regulation, licences, HOA etc
Please check regulations around STRs in your city, community, condo, estate etc. Make sure you qualify then apply for any licences you need to apply for.
Additionally, what does your Home Owner Association (HOA) say? Some communities have HOA that do not support STRs. Please check in with your HOA before you invest.
Also, consider condo fees. For some condominium, condo fess goes up if you decided to STR. Also, some condos don’t accept STRs.
Furthermore, there are many places you can put your STRs on. You can put it on Airbnb, VRBO, booking.com etc. Please research on these places before you list your STR. There are people who have their rentals on all of the above places. You can do so and link your calendars together.
Do not Communicate Outside the Airbnb Platform
Unless you have a well-established website that you use for direct bookings or a solid insurance for your STR outside of the platform you are listed on, please do not communicate outside the platform. This is because
1. It can lead to fraud, scam and theft, I explain this in the point below
2. Aircover or Airbnb insurance will not cover if you transact business outside the platform.
Be aware of Scam, fraud and theft in STR
I have heard of fraud, theft and scam happening in STRs. The scam can happen when hosts communicate with guests off the platform. The guests may ask to pay directly and send the host a cheque. This pans out in two ways:
a. They send a cheque that will bounce but it bounces after they have had their stay. So they have their stay for free.
b. They send a cheque that is more than their booking fee, They then reach out to you and ask if you can send the extra since they
Theft -
If you do not have insurance coverage outside airbnb, do not get reservations off that platform. Airbnb does cover third party booking and bookings made of the platform. There are guests that will book on the platform for let's say, 5 days. after 5 days, they will reach out to you and ask if they can extend their stay and book of the platform. please do not accept unless you have a solid insurance outside the platform.
As soon as their first 5 days is up, they are no longer under air cover and so if they steal or damage your place, airbnb will not cover it. No insurance from the platform.
Beware of Squatters – depending on where you leave you should have a rental agreement
when someone books for more than what is required for a STR.
Where I live, an STR is 28 days or less, so anyone who books 29 days or above is a tenant. Thus, if they decide not to leave after their 30 days, I will need a court order to evict them.
Be aware of third party booking
Airbnb does not cover liabilities and damages caused by a third party booking. Please always ensure the one that is booking is the one that is staying.
If someone mentions that, they are booking for a friend or a relative, ask them to have that person book for themselves especially if they will not be staying in the home with them.
Instant Booking
I recommend instant booking. This is because it helps with your proprietary Airbnb search algorithm. There are risks to it because it does not give you control of interviewing and choosing who stays in your space. But when it’s turned oof, it impacts your ranking in Airbnb’s search.
Also, when you choose to have instant booking on, you can decide on requirements guests need to meet before they book. I currently have instant booking and guest need to have a good track record which means no negative review from host and agree to my message before they can book.
Join STRs Groups on social media
Please look for local and international STR groups on social media especially Facebook and join. You will learn a lot from these groups. I am part of two of such groups and I have learned immensely from them. I am also a contributor and share my knowledge on there.
Market Research and Smart pricing
You can plan a trip (pretend or real)
1. To see how much people are charging for a space like yours in your community. That will help you gauge your pricing or set a minimum for smart pricing.
2. To know where your listing is in Airbnb search. If you want to know this, don’t use your app, Use a friend’s app or a different browser. If you use your app, Airbnb will always show your listings first.
Use Smart Pricing, but choose a minimum price that works for you.
Be firm with your Cancelation Policies
Choose a cancelation policy and stick with it. When you are setting up on Airbnb, you will be asked to choose a cancellation policy. Please always stick to your cancellation policy. Airbnb will try and bully you out of not sticking with it.
It has happened to me. A guest booked and at check in time, he wanted to cancel and get full refund. I asked the Airbnb customer service what they think (big mistake!), I should have just stuck with my cancellation plan and not refunded. Airbnb persuaded me to refund and I did. They told me, I shouldn’t worry and I can get it booked, I did not get it booked. Never again!
Additional Charges
On Airbnb, you don’t only charge for your nightly rate, you can charge extra for
a. Cleaning fee – for short stay (1 or 2 nights) and longer than 2 nights.
b. Pet fee
c. Extra guest fee
Most people charge cleaning fees and pay their cleaners that amount. Because you are able to charge an additional fee for cleaning, you do not have to take the cleaning fee from your nightly rent.
Payments
Airbnb handles payment. They take the money on behalf of the property owner before the guest/renter moves in and then they pay the host/property owner. Thus, the property owner does not handle payment.
Regardless of Airbnb handling payments, there have been issues where guests will leave at your Airbnb and use
a. fake credit cards
b. charge back their credit cards or
c. audio payments
Thus, there have been payments issues with Airbnb where hosts did not get payment from Airbnb because of the aforementioned.
You will usually get your payment the next day but it may arrive in your account a couple of days later.
You have the option to put it in your account or in a PayPal.
Caution: If you use Airbnb, please do not take payment outside the platform. That could result in fraud issues and you having squatters.
Property Managers
You can give your home to-property managers to manage at a fee. For STRs, you can be charged per booking or per month.
Many property managers charge per month which can be anywhere from 20% to 33% per month on everything you have made. For example, if you make $4,500 a month in your STR, the managers can take $900- $1485 for managing your place.
Do a video recording before and after check ins
I just got to know my tin opener was stolen because my current guests could not find the tin opener. I had to buy and send them a new one. Lesson learned, moving on, I will inspect everything. I will even plug in all the appliances and see if it works.
If you use a property manager, they need to have an inventory of everything in the home. They need to check if everything is still intact after a guest leaves.
I do a video before a guest checks in and after a guest checks out. Then I compare both videos to see what is missing.
I didn’t think I needed to do that till a guest damaged my suite.
Also, I don’t do my reviews till after I have done my laundry. I had guests destroy a pillow case with stains then hid it in the bedding. I was surprised they had undone the bed because I don’t ask guests to do that. I only realized it after I reviewed them and was doing laundry. People know how to hide things by quickly leaving a review.
Leave an honest review
Other hosts depend on it. If a guest is not great, let other hosts know. Please do not decide not to leave a review. You would want to know if a guest is not great so that you can decide whether to host them or not, right? So please leave an honest review for other hosts.
There are so many people with 5 stars reviews that end up being 1 Star guests.
Need support with Airbnb?
If you are a new host, you can make $100 if you use my airbnb link. I am a superhost, so you can make more using my link. Link is https://abnb.me/e/GZS7LfoYzyb
*All terms and conditions apply.
If you are thinking of starting and have no idea about set up, connect with us at this email and we will be able to help you.
We are also here to help if you want someone to co-host for your or manage your property at a good rate.
We are Superhosts for a reason!
Comments
Post a Comment