6 Steps to Getting Started with Airbnb [Video!]

by | BiggerPockets.com

When my wife and I talk to others who have hosted for any length of time on Airbnb, we hear the same thing over and over: Airbnb changed their lives. I’ve worked with several clients whose Airbnb money emboldened them to make new choices.

That’s our story as well. In addition to paying down credit-card debt and buying a car, our Airbnb money helped us buy our first home. Since then, we’ve leveraged that to buy other investment properties.

But for the uninitiated, Airbnb and short-term rentals can seem a little daunting. It doesn’t have to be. While perfecting the art of Airbnb takes some time, getting started is easy. Here are the first steps you need to take to become a successful Airbnb host.

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Check Your City and HOA Laws

Whether you choose to follow Airbnb rules is up to you, but you should at least know what they are and the consequences of breaking them.

To find your city laws, call your city’s planning or zoning department. There are three questions you need to ask your city planner:

  1. Are there any rules specific to short-term renting, Airbnb, or VRBO?
  2. Are there any rules restricting rentals that last for 30 days or less?
  3. Are short-term rentals recognized in the city use code? And if not, are uses not addressed in the use code considered illegal?

Asking these three questions should tell you what you need to know about the legality of short-term renting in your city.

Similarly, if you have an HOA, you’ll want to check the declarations or email your HOA board to ask if there are rules limiting rentals lasting 30 days or less. (Some condo communities are small enough that directly asking them may put you on their radar, so reviewing the governing documents may be your best option here.)

Related: 13 Mistakes New Vacation Rentals Always Make

Declutter Your Space

You don’t need to have a designer’s eye to build a good Airbnb space. (Though it certainly helps.) Just think less is more. Paring down your furnishings to the minimum is a sure-fire way to make your place more appealing in photographs. Some staging experts recommend getting rid of a third of your furniture for the best look. Even the frumpiest couch will look better if it’s not surrounded by junk.

If that doesn’t seem feasible, make sure your place is at least tidy: tuck chairs under the table, fold blankets, organize magazines and books, remove all the dishes from the sink (it may seem obvious, but it isn’t to everyone) so just remember: tidier is better.

Hire a Photographer

Here’s something to remember: Potential guests are looking at tens of listings and making snap judgments based on a quick glance. What draws them in? Photographs. And if yours are dark or not framed correctly, you may be missing out. Unless you have some expertise with photography, your iPhone’s not going to cut it.

Do one of two things: Take advantage of Airbnb’s free photography or hire your own. Many listings qualify for Airbnb’s free photography. Just Google “Airbnb free photography.” Unfortunately, some listings don’t qualify or the wait may be too long. In that case, I urge you to hire a professional real estate photographer. It may cost $100 or $150, but you’ll make that up in no time.  

List Your Space

When listing your space, think inside and out. What is most appealing about the inside of your space? And what is most appealing about your outside or location? When you have your answers, fold them into one headline. And when doing this, try to sell the experience, not just the amenities.

For instance: Live the Local’s Life – 1 Bedroom within Walking Distance to Downtown

OR

See the City: Urban Loft with Floor-to-Ceiling Windows

The listing is also a great place to discuss other important items: Are animals allowed? Is there laundry (and how much, if anything, does it cost?)? Remember this is public, so list the basics here but not the details (i.e., no wifi passwords, nothing about the neighbors, etc.).

One other note on your listing: Be transparent and honest about your space. People will forgive a leaky faucet or a not-quite-as-bright basement apartment if you’re upfront with them. Set accurate expectations, and you’ll prevent a lot of problems in the future.

Related: 6 Steps for Successfully Investing in Vacation Rentals

Pricing

Okay, you’ve decluttered your place, taken good photos, and set up your listing. Now, how much do you charge?

You’ve got a couple tools to figure this out.

  1. Airbnb Smart Pricing. Airbnb offers a tool that sets the price for you. This is great for those who don’t want to think too much. The problem is that they’re based on averages, and if your home is above average (and 50 percent of them will be), then Airbnb is pricing you too low. I’ve heard people get upset that somehow Airbnb allowed their 2-bedroom condo to get booked for $70/night for New Year’s Eve.
  2. Outside pricing tools. There’s a cottage industry of dynamic pricing tools tailored to short-term rentals. These have the same benefits of Airbnb’s Smart Pricing. And the drawbacks. They provide ease of use but are not that precise.
  3. Do your own research. The third option (and our personal favorite) is doing some good old fashioned market research. Act like you’re a guest and search for properties of similar size with similar furnishings in your immediate area. Be sure to check their reviews to see if they have some recent ones, which will indicate they’re getting booked.

(As a side note: One mistake people make is they rely on a host’s calendar to gauge occupancy. A host can block off dates for any number of reasons. They may be booked for the entire month of November, or they may have just blocked it off for their own use.)

Now that you know what comparable properties rent for, you’re set! Almost. First, you should cut 10%–20% off that price. Why would you do that? Because positive reviews are one of the best ways to move up in Airbnb’s search rankings.

If you’re priced at the same rate as similar properties with lots of reviews, guests are going to choose the listing with more reviews. You need to undercut your competition for awhile, grab a couple stellar reviews, and only then should you start to raise your prices.

4 Tips for Making Your Rental Kid-Friendly

Be nice!

I can’t emphasize this enough. Be enthusiastic and nice in your messages, in your face-to-face interactions, and in any phone calls or texts you make to your guests.

This is both an offensive and a defensive tactic. It’s offensive because your kindness may spill into the good review they’ll leave. That’s a good thing! It’s defensive because I’ve found that even if a guest has a bad time at your place, if they like you and think you’ve tried hard, they are less likely to leave a bad review. I’ve hosted tens of people who I know had something go wrong during their stay, and they either didn’t leave a review or left a review that simply said the host was super attentive and nice.

As we said before, to become a rockstar Airbnb host takes some time, and there are certainly more advanced tips to follow when operating a short-term rental. Don’t let that stop you. Take the steps we talked about and give it a go.

What tips did you find helpful when getting your vacation rental up and running? Let me know below!

About Author

James Carlson

James Carlson loves the city of Denver, a good IPA, real estate, and Airbnb.

He is co-owner of James Carlson Real Estate and works with buyers, sellers and investors. He is also Denver’s Airbnb expert. He has hosted more than 150 guests and teaches classes on short-term rentals and hosts seminars on the current state of Airbnb laws in Colorado.

8 Comments

  1. Thomas Phelan

    James makes many good points but his endorsing AirB2B as a “cash cow” isn’t unique. I must have been hit by at least five other Gurus this month on the same subject, get rich with AirB2B.

    I became quite interested in AirB2B for the Miami area where I live. In doing my “Due Diligence” I discovered that the Miami/Dade City Council had on the table ready for a vote a draconian set of new Rules and Regulations about AirB2B business conducted in the Miami/Dade area. When I say “Draconian” I mean just that, some of the proposed rules and regs were outrageous, e.g. if you offer a AirB2B you must be the owner of the property and live at the address at least six months a year. The voting had been postponed until September and then along came IRMA and I am waiting to see when the vote will again be on the City Council’s calendar.

    My point, don’t be naive and think that the Hotel Industry is going too sit on it duff and do nothing. It is fighting AirB2B across the nation and in some cases has been successful in prompting a compliant City Council to just about outright ban AirB2B. In Keywest, Florida for example fines can be run into the thousands of dollars.

    • AirBnB is the name. There are sometimes ways around some of these ordinances and laws. They are absurd, btw, and people should fight them as much as possible. In a city where we want to move and potentially have an Airbnb apt, they have forbidden less than 30 days rentals as well although I see many, many listings nonetheless. What they DO allow are bed and breakfasts. Getting a bed and breakfast license is a work around to keep the Airbnb.

      • James Carlson

        Interesting point about the B&B license. I know a few people who have bought a commercial property for this reason as they can do Airbnb-style hotel like rentals.

        Erin and I can’t emphasize this enough, though. Call the planning department to learn your city’s laws. There are some dubious reports out there that incorrectly report on the legality of Airbnb in certain cities. For instance, I know there’s a report floating around somewhere that says Airbnb is outlawed here in Denver. That’s simply not the case. You can Airbnb a place if it’s your primary residence. You can also allow your tenant to Airbnb their space. This latter provision allows for an interesting workaround for investors. If you bought a home with a basement apartment, put a long-term renter in the basement, then they could get the license and rent out the top portion of the house — their “primary residence,” which you, as landlord, have given them permission to do. How you split those profits is up to you.

    • James Carlson

      Thanks for the thoughtful comments, Thomas. While I would loathe to be labeled a “guru,” I would stand by the idea that Airbnb CAN be a good money-making venture. It’s not a sure thing, but it’s a possibility if you’re in the right place.

      You’re spot on about ensuring your laws are open to this model. That’s why we talk about it first.

      You’re also right about the hotel industry, but my sense is that is only true in certain cities. Here in Denver, for instance, the hotels have had record profits for years now. It’s actually the neighborhood associations that are up in arms about Airbnb. The buzz phrase here is “changing the character of a neighborhood.”

      I wish you luck if you decide to pursue this model. And while Erin and I are no “gurus,” we are always open to questions, so reach out anytime. We love talking about this stuff.

    • There are a few airbnb host boards with interesting comments and observations worth noting by hosts. My biggest advice is don’t ever reduce your price if someone asks. Even if they agree to full price, they’ll be primed for disappointment and WILL find something to complain about, been there done that. And if you agree to a discount, you’ll be resentful to have settled for less. My new policy (and I’ve already implemented it on a guest) is to just outright decline anyone who asks for a discount.

      This is my job, my only income. Would I ask you to perform your job for less money? Nope, I wouldn’t. I’d rather have a vacant night. But in general, we do have pretty decent occupancy.

      • James Carlson

        Lisa, Thanks for commenting here. I love to hear everyone’s perspective. First off, congrats on doing well with this model. I agree with your sentiment, but not completely. My first response is to always decline. I usually tell guests who ask for a discount that I can appreciate them asking but that I know from experience that I can get the rate I’m asking for so I can’t offer a discount right now.

        But here’s the thing: There’s no right answer on this. Every decision made regarding Airbnb should be made according to YOUR comfort level. For me, despite what I just said above, if it’s getting close to last-minute, and I want to fill that spot, I might be more inclined to agree to a discount. I try to keep my ego out of it. It’s a business for me, and if I have the choice between making $75 a night or not getting filled, I’m going to take that $75.

        But that’s me. Everyone’s got to decide what their goals are and then operate accordingly.

    • James Carlson

      Jerry, thanks for the kind words. I’ve definitely seen you around the forums. How’s your vacation rental going? I hope well. Airbnb, VRBO and short-term rentals have been around for a bit, but their appearance on the radar of mass culture has only just begun so there’s definitely a need for more education and information.

      I wish you well.

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