So you are all set to go on your beach vacation. Tickets booked, itinerary planned, and bags (almost) packed. But while you’re gone, making some extra cash to help cover the cost of your trip? Might not be a bad idea…
The rise of direct peer-to-peer sharing companies like Airbnb makes renting out your place easier than ever. The director of Public Affairs at Airbnb says the average host makes around $7,200 a year. So what are some important things to keep in mind when you’re ready to start cashing in on your vacations?
Laws And Order
The idea of making money right off the bat is appealing. But it’s worth slowing down to find out exactly how to not break any rules while doing it. Some homeowners associations put very strict rules on renting, including the ability to use your house as an Airbnb. Always be sure to look through your contract to make sure you’re not breaking any rules.
While not the most exciting of things to consider when getting ready to Airbnb, it’s never a good idea to avoid Uncle Sam when it comes to extra income. Thankfully, taxes are not too much of a hurdle if you only plan on renting for the short term. In the US, a short-term rental is anything less than 15 days. And for 15 rental days or fewer, you won’t have to report your earnings as income. But if you rent your home out for more than 15 days in a year, you’ll have to start reporting the income when filing your taxes. Check with your tax professional. Stay organized and keep your documents handy for when tax season comes around.
Making sure your guests are happy and comfortable is one of the most important things when it comes to being a successful Airbnb host. Guests can leave reviews of the host. Your reputation on the Airbnb site is the ultimate money maker… or deal breaker. Easy ways to help make your guests more comfortable are easy to do. Stock up on toilet paper. Have plenty of good, clean towels and freshly washed sheets. Consider leaving a small book for your guests with important information. Include the WIFI password, any house rules (ex: no smoking), and important phone numbers like 911. (Remember, not everyone visiting will be from the US). As always, being polite to your guests during your interactions will always get you far.
Having strangers stay in your home can be a bit scary. But trusting someone they’ve never met to not totally ruin their house is something Millennials seem to have adjusted to quickly.
Nevertheless, it’s important to be prepared. Airbnb does offer to screen for potential renters and even offers insurance in case someone gets hurt or damages your property. However, you may want to check in with your homeowner’s insurance to make sure that you’re totally covered. Some insurance plans are fine with covering short rental periods. But others may not be so flexible and might require you to upgrade to a business insurance plan. Make sure all your boxes are checked ahead of time, and you won’t have to deal with an expensive oversight later.
It may be tempting to charge the most that you feel you can charge right away. But first, take a little time to do some research before setting your prices. You don’t want to end up underselling yourself, and you also don’t want to price too high and have no customers. See what the other Airbnb’s in your area are charging for their spaces. It also doesn’t hurt to see what hotels and hostels are charging per night in your area, and set your prices accordingly. Also, keep in mind the location that you have. Are you in the middle of the city with lots of bustling nightlife? Or are you out in the woods with gorgeous views of the countryside? With the right location, you may be able to get away with charging a little extra.
Welcoming guests into your home can be a great way to make extra cash while you’re away. But first, you’ll need a home! If you’re ready to take that step into homeownership, head over to Morty and see how you can make your dreams come true.