Increasingly more people are starting some type of side hustle either simply to supplement their income or in the hopes of ultimately replacing their nine-to-five job.
One sector that many are exploring is the short-term rental industry. Even amid the global pandemic, the gross booking value of Airbnb bookings in 2020 was reported as just shy of 18 billion US dollars (according to Statista).
With regards to profit from this business per month on average, data collected by Earnest reveal that Airbnb hosts can make almost $1,000 per month. So, starting an Airbnb business can make a lot of sense from a financial point of view.
If you’re searching for more information on how to run an Airbnb, here are 5 key steps to help you start your Airbnb business from scratch (and you don’t even have to own any property).
1. Choose a Vacation Rental Business Format for Airbnb
It might come as a pleasant surprise to you, but you don’t necessarily have to own property when opening an Airbnb business. In addition to renting out your own vacation rental, you can also manage properties on behalf of other owners or try your hand at rental arbitrage. Make sure to use an Airbnb host calculator to estimate the income potential of a property before you list it on any vacation rental platform.
2. Prepare a Business Plan
An Airbnb business, like all other ventures, needs a comprehensive business plan. By taking the time to identify practices, objectives, strategies, and frameworks, decision-making will be easier and you’ll be better prepared for potential risks. All in all, an Airbnb business plan is an indispensable resource to ensure that you remain on the right path to increase the likelihood that your venture will be successful.
To help you prepare your business plan, you can use the following subheadings to create an Airbnb business plan template:
- Business goals
- Executive summary
- Value proposition
- Management structure
- Operations plan
- Financial plan
- Target audience analysis
- Competitor analysis
- Marketing strategy
3. Get Your Paperwork in Order
Before you commit to becoming an Airbnb host, first ensure that you are completely familiar with the different laws and regulations pertaining to short-term rentals in your area. You most likely already have this information in a document after you have written your business plan. So, if you first need to get permission or an Airbnb business license, get your paperwork in order before you turn to the more fun side of getting your property guest-ready.
4. Set Up Your Vacation Rental for Guests
After you have sorted out the legal aspects, you can turn your focus to other technical details like check-in instructions, deciding on a style, and sourcing the necessary amenities and furniture. You will also need to write house rules and create a welcome book.
5. Promote Your Property
While social media can be a great tool to promote your property, your first focus should be on creating a listing on Airbnb that will help you to stand out from similar properties. The best Airbnb listings have high-quality photos, a captivating title, and an engaging description. To help guests find your listing, you can also focus on SEO. Once you have a solid listing that you can refer interested travelers to, you can expand your promotional activities to Facebook, Instagram, and local tourist forums.
6. Manage Your Airbnb Business
Getting your property guest-ready and marketing it is only half the battle. Now, the real work starts. To assure that every single guest will enjoy a high standard of service and hospitality, there are still several repetitive tasks like guest communication and cleanings that have to be completed always on time.
Moreover, depending on the type of traveler that you are trying to target, you might also consider listing your property on Vrbo and other popular vacation rental platforms. This can help you to boost your reach significantly.
To streamline these time-consuming daily tasks and stay on top of your availability, it’s best to use vacation rental software. Some of these software solutions are, in fact, free, and can help you to reduce human errors. If you’re serious about scaling your Airbnb business, investing in vacation rental software is the most cost-effective approach.