Hosting on Airbnb and meeting people from around the world (while making some money!) is awesome. But it’s also a business, and many people don’t realize that.
The average Airbnb host has a lot of responsibilities. Hosts make sure guests have an enjoyable stay, but they also make sure the lodgings are clean when guests arrive. They’re the ones making sure bathrooms are stocked with toilet paper and there’s coffee to make in the morning. When guests leave, hosts make sure the space is clean for the next guests–and then, at the end of the year, they have to do taxes for their Airbnb. It’s a lot of work.
And Almost Millions wants to make sure you make as much money as possible from hosting on Airbnb.
Here are ten of the best tips for the business side of running an Airbnb:
Airbnb Host Tip: Calculate Your Hourly Rate
People talk about Airbnb being passive income–that is, income you make without actually working–but hosting an Airbnb requires a decent amount of work.
In order to maintain an Airbnb listing, you (or someone you hire) will have to clean the Airbnb before and after a stay, purchase supplies, wash linens, update a listing, talk to potential guests online, perform maintenance on the property, and possibly travel to and from the Airbnb to let guests in and out.
That’s a lot of work, and calculating your hourly rate from Airbnb will help you understand how much money you’re actually making from your Airbnb listing.
To find your hourly rate, do the following steps:
- Take the amount you make in an average month, and subtract the cost of supplies and other expenses (utilities, Netflix for guests, etc.) out of the cost.
- Divide that number by the average hours per month you are actively working on either your Airbnb property and your Airbnb listing.
Once you learn your hourly rate, use that to figure out how to make the most money from Airbnb. Think, as a host, about what you can spend less time on and how you can reduce expenses while still offering a great experience for guests.
Airbnb Host Tip: Know How Much Time You Can Commit
Unrealistic time expectations are one of the biggest things that trip up new Airbnb hosts. If you already have responsibilities like a day job or family members to look after, you might have less time to work on your Airbnb property than you expect.
Remember, you don’t want bad guest reviews! If time is a challenge, think about employing a part-time concierge or cleaner, using a local cleaning service, or using a service like Mopify or Turnkeyed.
Airbnb Host Tip: Take Furnishings & Necessities Into Account
Unless you’re converting an already furnished home or room into an Airbnb listing, you’ll have to purchase furniture and furnishings for your property. These will cost money. Make sure to take special care in what you’re buying! If your furnishings are too cheap, guests are more likely to leave poor reviews; if furniture is too expensive, it’ll significantly cut into your earnings.
Airbnb hosts also need to purchase staples including paper towels, toilet paper, paper towels, basic toiletries like soap and shampoo, coffee/tea, basic food supplies (condiments, milk, water filters, etc.), bug spray and lightbulbs for their units on a regular basis. These cost money too.
Airbnb Host Tip: Remember Hidden Expenses!
Electricity and heat cost money, so do internet access and cable television for guests. Washing linens after guests leaves costs money as well; there are lots of hidden expenses Airbnb hosts pay. Be mindful of those costs so you’re not shocked by costs (and so, being the crafty businessperson you are, you find ways to save money).
Airbnb Host Tip: Find Good Deals On Necessities
When you’re hosting on Airbnb, you will need to buy certain things like soap, shampoo, toilet paper, coffee and tea, linens, and lightbulbs frequently. These costs can add up if you’re not careful–finding an inexpensive source for supplies is essential for the savvy Airbnb host.
Airbnb Host Tip: Remember Tax Deductions
Home supplies, linens, and even new furniture exclusively for the use of guests are tax deductible, and can significantly reduce your tax bill come April 15. Speak with your accountant about the many Airbnb-related tax deductions available to you, and check out the links at the end of this article.
Airbnb Host Tip: …And Remember Taxes
If you are hosting an Airbnb, you need to pay taxes on your rental income. Airbnb has put together a very helpful guide to Airbnb and taxes that provides a good starting point for American readers. Your municipality may have additional tax requirements for Airbnb hosts; ask a certified public accountant about any local issues that may be of concern.
Airbnb Host Tip: Make A Penny Bank
One of the smartest things Airbnb hosts can do is to put together a “penny bank” of a few thousand dollars in a separate savings account. This is an emergency fund you only use if needed for Airbnb purposes, and only if you can afford it.
Your “penny bank” is only to go towards costs such as repairing property damage by guests or handling unexpected Airbnb-related costs; every time you receive money from Airbnb, deposit a small percentage in this emergency fund.
Airbnb Host Tip: Love Your Insurance Policy
Airbnb offers hosts robust Host Protection Insurance, but Airbnb hosts may also want to consider third party insurance to augment this policy. Speak with an insurance broker to find out about your options.
Airbnb Host Tip: Enjoy Being A Host!
Hosting on Airbnb means meeting guests from all over the world, and can be a fun part- or full-time job that helps with everything from paying off debt to putting kids through college. Enjoy being a host!
10 Money Tips For Airbnb Hosts: Additional Resources
If you’re looking for more information on the money and personal finance side of running an Airbnb listing, here are some additional resources.
H&R Block: Airbnb Host Reporting Guide
Laptop Landlord: Airbnb Tips for Hosts: The Definitive Guide
Washington Post/Jonnelle Marte: Thinking Of Renting Out Your Home On Airbnb? Consider These Costs First.