When setting out to start your Airbnb business it’s tempting to just run out and grab the first property you find and list it online. Though I respect the speed of execution, this isn’t the way to go about starting a business—no matter what the industry is.
My personal rule is that when I have about 70 percent of the plan, that’s when I execute. It’s a fine balance between being too impulsive and being too cautious.
Have a Business Plan
In addition to that, take a day or so to sit down and come up with your long-term business plan. Ask yourself simple questions about your future business like:
- How many properties do you want to have in your portfolio?
- How many do you want to acquire each year?
- What are your income goals?
- And so on
I’ve found in my life that the more clear I am about what my objective is, the more likely I am to achieve it.
It actually makes perfect sense when you think about it. For example, if you set a goal to make $10,000 per month and each property makes about $1,000 per month, then all you need to do is acquire 10 properties. From that point, you just need to figure out the best way of going about doing that in your market.
Keep Prices Lower in the Beginning
When you’re first getting started with your rental business, your first objective is to make money as quickly as possible. Every day that goes by without earning revenue is a day you get behind the curve—and potentially in trouble. But if you price your property lower than the market, you are likely to get more business early on, which will help you cover your monthly expenses.
Being over-ambitious in the beginning might cause you to not get enough business to justify the cost of controlling the property. By doing this, you guarantee that you’re at least going to be earning some revenue (which is far better than nothing).
Once you’re up and running, you can start to raise your daily rate to increase your cash flow. At this point your next goal is to focus on how to maximize your profit each month.
Provide Parking Accommodations
One of the biggest nuisances to your guests will be not having ample parking once they arrive. The last thing you want is your guests driving around the block, trying to find a parking space. You want to grease the wheels of your business operations as much as possible to make things enjoyable for your guests.
If you have available parking spaces on or near your property that you own or control, then make sure they are empty when your guests arrive. If you live in the property, then moving your car down the street to accommodate your guests is a good idea. Or if you have the option to purchase a parking space near your property, then this might be a wise decision, as well.
At the very least, make sure you provide foolproof instructions on where to park for your guests once they arrive.
Keep Good Financial Records
Many new business owners fail to realize that just because their property is earning money every month doesn’t mean it’s profitable. As an entrepreneur, you must track your business income and expenses every month to keep track of where your business stands. In addition to this, you also have to pay regular income tax on your business profits so putting a portion of the cash flow aside each month is important.
Plus, if you ever want to get business credit or maybe even sell your portfolio later on, then you’re going to need good financial records to accomplish this.
In the beginning, you can do this yourself easily with just a spreadsheet. Later on, however—say, once you have more than three properties—it’s a good idea to hire out your bookkeeping with a professional service.
Provide More Amenities
In the short-term rental business, you never know who’s going to rent your property on a weekly basis. You’ll have business people, vacationers, and those visiting family. Each of your guests is going to have different wants, needs, and preferences. The more amenities you provide, the more enjoyable the experience will be for your guests.
For example, if you have a guest who’s staying for business, then having an ironing board and hangers for dress clothes is a good idea. Or if you live on the beach, providing surfboards and bicycles will enhance the guest experience.
Different amenities will fit better with each of your properties depending on the market, location, and surrounding attractions. However, the more the better is usually a good rule—as long as it fits your budget.
Can you think of other helpful Airbnb tips to add to this list?
Share in the comment section below.