Here's what you need to know on how to run an airbnb successfully and maximize your investment properties potential.
To figure out how to run an Airbnb successfully, you’ll first need to establish what success looks like for you.
Do you dedicate all of your time to the management of your short-term rentals (STR) or is it something you do on the side? Are you in it for the financial returns or do you just want others to enjoy your own vacation home when you aren’t using it?
Either way, there are several things you can do to ensure that your listing stands out, your guests have a great stay, and they leave happy (giving you a glowing review). If this sounds good to you, keep reading for our top tips for how to run an Airbnb successfully.
Before you even think about how to run an Airbnb, you should check your local and state law to find out whether it is legal to do so and if there are any other regulations in place.
Different cities and states have varying laws regarding zoning, taxes and housing standards so it pays to do your research.
If you are not a landlord but are renting a property which you wish to then rent out to someone else (perhaps you are going on vacation or will be away for work for a prolonged period of time), this is known as rental arbitrage.
While this may seem like an easy way to make quick money, you should thoroughly check your lease first. The landlord may have explicitly stated that rental arbitrage is not permitted or is only allowed on a case-by-case basis. Check that you are within your rights to list on Airbnb, or you may risk being evicted.
Once you have established that you are legally allowed to list your property on Airbnb, or any other short-term rental listing platform, you should consider the location it’s in and why it matters.
Location, location, location is an old adage for a reason. If guests are shelling out a premium to stay at your property, it needs to have a good selling point.
It should be noted that there is of course a difference between investing in a new property with the intention of running it as an Airbnb and transforming an existing property that you already own into a vacation rental.
If you are investing in a short-term rental that is new to you, there is even more reason to consider the location carefully. It may be that a place local to your primary residence is the best fit for you, as you can manage it personally. Or, perhaps you want to look further afield, out of state, to invest in somewhere with high demand and high returns. Think touristy areas, city centres and places near beaches, lakes, forests, etc.
On the other hand, if you are working with a property that you already own, while you can’t change the location, you can highlight the perks of the location and any additional perks or amenities that the property has eg. a pool, hot tub, access to communal tennis courts etc.
Research similar listings in the same market to ensure that you are keeping your rates reasonable and competitive. Ignoring the location altogether could lead you to miss out on higher occupancy rates.
With approximately 5.6 million listings on Airbnb, it can be hard to capture attention for yours. Having a great listing that includes attractive photography and compelling yet accurate copy will help you draw the attention of browsing guests.
Your copy should be descriptive and inviting, yet authentic. Claiming that your property has aircon when it doesn’t will not go unnoticed and can lead to refund requests and negative reviews. Instead, be honest so your guests know what to expect.
In terms of photography, it’s worth hiring a professional photographer, as your listing will most likely be up all year round. Even if you decide not to accept bookings for a couple of months a year, your listing will still be available to view for guests booking at other times. A good photographer will be able to capture your property in the right light, making it seem like a welcoming place.
From calendars that will sync across platforms (so you don’t end up double booking the same property on Airbnb and VRBO at the same time), to real estate accounting software, there’s enough tech out there to help you successfully automate and streamline your STR property management.
Although the right tech often comes at an expense, it can be worth it in the long run for the time and money that it may save you.
As well as software, think about smart home technology, such as water-saving showers, smart thermostats and economical appliances to help benefit you, your guests and the environment. This is especially worth considering for a short-term rental landlord or property manager as you will be paying the bills.
When thinking about how to run your Airbnb getting your pricing right is essential. Make sure you take host fees into consideration, as well as cleaning fees and deposits, as these can vary. If guests feel that there are too many additional costs associated with their stay, they may choose to look elsewhere.
Unlike a long-term rental where the rent is fixed for the duration of the lease, your Airbnb pricing strategy should be dynamic and reflect the changing seasons, holidays, and events. Don’t be afraid to drop your nightly rate during the week if you are struggling to attract bookings then. As landlords with long-term rentals should check the market when setting their rent rate, short-term rental property managers should also check comparable properties in the area to ensure they are offering a competitive deal.
Pricing can also vary depending on whether you are offering short stays or longer stays. If you are offering stays of over a month, discounts can be added to attract guests. While offering discounts may seem counterintuitive, if they are used to secure guests who are staying for longer, it can lead to a more steady income for a longer period of time.
Most property managers will agree that while accounting is not the most glamorous part of being a vacation rental host, it is important nonetheless. Through thorough and efficient bookkeeping, you may be able to take advantage of deductions come tax season. Therefore, it’s imperative that you track your income and expenses throughout the course of the year, not just when you’re in a rush at the end of the tax year.
To help you do this, make the most of software, whether that’s in the form of a spreadsheet or purpose-built, industry-specific software. Software like Landlord Studio will allow you to track income and expenses with ease, and run industry-specific reports as and when required.
There are key differences between managing a rental that is near you and one that is out of state.
If your Airbnb is in close proximity to your primary residence or even if it’s a room in your home, you’ll be able to keep a close eye on everything and deal with guest turnover easily. You may even wish to clean the property yourself to save money that way. If, however, you are running your airbnb remotely, you’ll likely need a team of trusted people to help you with things like maintenance and repairs and cleaning.
This is especially true if you have a high tenant turnover. Driving long distances every time a new guest arrives or leaves can distract from other important tasks associated with managing your short-term rental portfolio.
On a platform like Airbnb, reviews are integral to building and maintaining momentum and bookings for your property. Therefore, providing extra value for your guests can go a long way.
In fact, while people will often mistake the vacation rental game for being in the realm of the real estate industry, it’s more akin to the hospitality industry. Personal touches are often appreciated and valued.
This could be in the form of a welcome hamper, a well thought out local guide with details of places to eat and fun things to do or additional amenities (aside from the obvious and expected basics like toilet paper and towels).
While the Airbnb platform is oversaturated and hosts are frequently hit with changing regulations, there are ways to build and grow your short-term rental portfolio in a way that is successful.
From researching local laws and taking advantage of your location to using the right tech and setting reasonable yet competitive rates, you can tailor your strategy to make it work for you. This can lead to high occupancy rates, high returns, happy guests and great reviews.