Are you interested in hosting on Airbnb, but not sure how to get started? This blog post is for you! In this article, we will take a look at 4 steps that will help lead the way to hosting success. We’ll cover things like assessing demographics of potential clients, pricing your listings correctly and even hiring a rental management company to take care of all the hard work so you can focus on hosting!
Why You Need a Business Plan
Airbnb hosting is a great way to make some extra money in your spare time (or full time if you’re up for it). If you’ve ever hosted, then you know that running an Airbnb business requires more than just opening up your home and waiting for guests to arrive. Just like any profitable venture, you need a solid plan! There are many factors that come into play when hosting on Airbnb. Understanding these factors can help you launch a successful airbnb business!
Before hosting on Airbnb, it is important to create a business plan. This includes setting up your mission statement and getting an idea of who you want to cater your rental to. If you already have an established host account with good reviews from guests, then hosting can be extremely profitable! However, if you are new to hosting or would like some insight into what type of guest will most likely book with you, then the following 4 steps will help you gain clarity.
This article mostly caters to those new to AirBnB hosting. However, even a seasoned pro could learn a thing or two from having a better plan in place. This will help you maximize your income potential and feel good about the process.
Step 1: Determine Your Why (Mission Statement)
Like any venture worth doing, knowing why you want to start an Airbnb business is an important first step. This is what will keep you motivated to provide high quality services while enjoying the process along the way. Ask yourself these important questions to figure out what your exact mission is for becoming an AirBnB host:
- What does hosting on Airbnb mean to you?
- Why are you hosting on Airbnb in the first place?
- What do you hope to accomplish by hosting guests on AirBnB?
- What are you going to do with the extra income?
- Do you look forward to the opportunity to interact with new people from around the world?
- Can being a host simplify life and reduce stress for you?
- And more…
Whatever your motivation is, make sure that hosting on AirBnB with a short term rental is something you are passionate about. Now that you know your “why” for hosting on Airbnb, it’s time to look at the specific details for reaching your income goals and beyond.
Step 2: Determine Your Who (Demographics)
Next in designing the best possible plan is coming up with a general idea of who you will serve. This will help you cater specifically to these people. Ultimately, you will then be able to optimize your listing using the right words and language that appeal to them. Plus, you can appropriate decorate and stock your short term rental listing. This equates to happy customers that keep coming back, refer others to you, and keeps your listing maxed out on bookings. Here’s how to get started:
- Describe who you plan to host (think about age groups, interests, profession, family vs. friends vs. work, etc.)
- Why will someone choose your listing over others? How is what you offer better than any others?
- Why is your listing different? What offerings make your listing special?
- Talk honestly with friends and family that are familiar with the area and your rental
- Reach out to anyone that fits your target group and ask them what they are looking for (and maybe more importantly- what they aren’t looking for)
- Search online forums and social media groups that fit your potential niche to get inspired for appropriate marketing, furnishings, etc.
Having some insight about your ideal client is very valuable when it comes to a successful Airbnb business. Overall, it will help you make the right decisions for pricing, setup, and beyond.
Step 3: Determine Your Pricing and Budget
The third step of figuring out your prices and budget is perhaps the most important part of this process. After all, if you underestimate the costs involved with your rental you may end up with less income or even loss of money. On the other hand, overestimating may result in fewer rental bookings. The trick is to find that sweet spot.
When it comes to pricing your rental, there are a lot of factors that influence your rates which you’ll need to consider. For example, Airbnb hosting can be as profitable as full-time rentals (or often more), when prices are appropriate. Thus, it’s important for hosts to understand the average rental income and expenses in their area before determining price points.
Once you have an idea about how much money you want or can make each month, then keep these factors in mind to determine a final number:
- Rental price range in your area- what’s a competitive rate?
- What type of people you are catering to (refer to step #2!)?
- How many people can comfortably stay in your home?
- The season you are hosting (i.e., during the weekends, holidays)
- Time of year for hosting (i.e., summer is usually busier than winter months)
- Your average costs per month to run the rental, including Airbnb fees or other expenses associated with hosting. These expenses may include: hosting fees, cleaning charges, laundry charges, utilities (electricity and water), insurance premiums, etc.
Step 4: Determine Your How
By now, you should have a pretty good idea of how to start a successful short term rental. Yet, there is one more important factor to figure out: how you will actually keep your business running smoothly. Consider these questions:
- Do you have the time to run everything on your own? This includes answering inquiries, keeping in touch with guests, bookings, cleaning, upkeep, and more.
- Do you want to run the business on your own?
- Do you want to hire someone to run part, or all, of your business?
Your hosting business can often be more successful if you can invest as little time as possible into it (aka less stressful while still generating income). For this reason, it can be majorly beneficial to figure out how to automate your hosting process so that everything runs on its own with minimal input from you. This is why you should consider hiring a rental management company.
If you want to save yourself a lot of time and effort, you should very seriously consider hiring a rental management company or virtual assistant. Either option can help build your listings and deal with inquiries from guests, bookings, and more. Plus, a management company can pick up as much of the work as you would like- from getting started with writing a high quality listing to keeping your rental clean and well stocked.
Ultimately, you can be as involved or hands off as you would like with a management company (like our team at Skye Management). It’s up to you to determine what option will allow you to achieve your goals and numbers that you determined in the first three steps.
What Are You Waiting For?
With people itching to get out and travel (both for vacation and remote work) and borders slowly opening, there has never been a better time to get started with your short term rental. With the right business plan in place, you can feel confident in your ability to be successful. Once you have figured out your why, who, what, and how, if you know you need help to launch your Airbnb business then consider a rental management company like Skye Management. We are here to help make the process as seamless as possible!