Airbnb | Are You Ready to Start Your Business?
Step-by-step guide from an Airbnb Super Host
I’m going to share with you how to get to the part where you are ready to start a STL (Short Term Let) on Airbnb or as some call it a vacation rental business as a beginner.
There are opportunities in a down cycle
Some of the considerations you may have given, due to the current economic climate, are the uncertainties in the present housing market. You might be thinking it isn’t even the right time to start, and that’s okay. However, there are always opportunities even in turbulent times. The late, great Winston Churchill once said, “A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty.”
What I’m going to share is pretty much the same framework that I used as I have a listing on Airbnb. I am an Airbnb host and recently, after hosting some 230+ guests and a year of hard work, I achieved “Super Host” status.
Where to begin
The first step is to just learn some of the basics for free from YouTube and immediately try to put these into action. Take those small actionable steps as you’re still learning.
Get paid $40 for hosting your first guest
If you wish, you can use my link below to sign up to host this is at no cost to you and Airbnb actually pays you $40 to do this. Click here
Next, pick a location and a target demographic that reflects your lifestyle. I’m an advocate for picking something that you like. It might be because it’s a destination that you would want to travel to or live there.
Research your local market
You want to look up local regulations. Do they allow short-term rentals and if so, is there a cap on the number of days per year you can host, and the number of bookings per year?
Use analytic websites for your research
You should research other Airbnbs in the area too. What do they look like? Has the supply been going up? What’s the average daily rate? How many bookings do they have? This kind of information you can find on Airbnb analytic websites like Price Labs or AirDNA.
The next step is to get a pre-approval letter from a lender if you’re planning to purchase a property. You’ll probably be looking at a vacation home loan, which is very similar to the standard mortgage process where you need to have a good credit score, pay stubs and a deposit.
Secure finance for your project
Now of course there are more creative ways to finance the property. You could go into rental arbitrage, where you rent out a place as a long-term renter and then you list it on Airbnb as a short-term rental and you pocket the difference. There is seller financing and DSCR (Debt Service Coverage Ratio) loans. All of them have risks. And I’d encourage you to thoroughly research each of them.
Start viewing lots of properties
Next, get yourself a realtor who can narrow down the kind of property you want, based on your budget and your target demographic. Let the realtor know if you are looking for a big family house or if you are targeting more business travellers or couples that need a smaller space. In my case, I target university students, lecturers and people visiting the city to see a show or concert.
Don’t procrastinate any longer
So, the next step is to make offers and keep repeating the process until an offer is accepted. This might take some time depending on how competitive your market is and how good a deal you want. But I would encourage you not to wait for that perfect property to come along because I don’t believe that there is such a thing. If you do take this approach, you might get discouraged from making a purchase.
Gain some general knowledge about home maintenance costs, property taxes, monthly mortgage repayments and mortgage fees to figure out what your monthly or yearly expenditure will look like. Keep a track of these in an Excel spreadsheet as a reference point to work from.
Do your due diligence
The final part of the process is to get an inspection, complete the mortgage process, check the title, that kind of thing. This part usually takes about a month or two and it’s also a really good time to start thinking about the interior design.
Begin your listing description
As soon as you get your keys start writing the description for your listing. Fill in as much as you can. Take photos. Make sure you go through all the amenities boxes and check everything that’s relevant. Fill in all the blanks about your space and about how to contact you. Finally, let your listing go live, sit back, and wait for those bookings to roll in.
Good luck on your path to a more secure financial future.
I am an Airbnb host and recently, after hosting some 230+ guests and a year of hard work, I achieved “Super Host” status. I now write about my own personal experiences as a host giving my readers my insight into the Airbnb community.
