One of today’s most exciting opportunities is to use the Airbnb platform to make residual income. Anyone can do it. You might rent your home while you’re away on vacation. You might have an extra room. Or you might buy a second home and rent it full-time.
Some might use Airbnb to make good supplemental income. And for those that are serious about this business model, it’s possible to building something lucrative over the platform.
I want to show you how. This article is a list of all the factors that lead to great business results from Airbnb. You don’t necessarily have to do ALL these things. But the more you maximize these items, the better you’re positioned for success.
This article is long. However, it’s meant to be a comprehensive resource for Airbnb hosts. I divide it into five sections:
I. The Obvious Things
II. A Little of This Goes A Long Way
III. The Things The BEST Hosts Do
IV. The Business Things You Have to Do
V. Get Professional Airbnb Help
I. The Obvious Things
These things are obvious. If you can’t get these seven things right, your business likely won’t do so well. Spending time perfecting these fundamentals will be the difference between profitable and not.
1 — The listing itself. It’s always a bit shocking when a host writes a small description and only includes a few pictures. If your listing is great, spend the extra 30 minutes to give adequate information to prospective guests. They are comparing you to hundreds of other listings. You don’t want them to eliminate consideration because your listing lacked important information. Get this right… it’s the easiest part!
Not sure what to write? Describe everything from this article as a starting point and then contact me and we’ll get it just right!
2 — The pictures. Pictures are the best representation of what a guest is getting involved with. This is another easy one. Get a professional to take good pictures with the right lighting. Put enough photos that a guest isn’t questioning something (what the shower looks like, whether you have a washing machine, etc). At the same time, don’t distract them with the smallest details.
Show that your unit is highly desirable, clean, and well equipped. Make them professional and you’re already ahead of many listings.
3 — A desirable place to live. What do guests look for in an Airbnb? Why would they choose you over other accommodation? Among the factors they are looking for…
- Furnished so they are comfortable
- Has all the equipment they need (AC/heating, washer/dryer, iron, kitchen supplies, etc)
- Well located
- A value for their money
- Hassle free (in terms of check-in and check-out, entry/exit, and repairing anything that goes wrong)
In fact, these are the things they will rate you upon when they leave. Finding an accommodation can be stressful. The more you can create an appealing living space, the better you’ll do with guests.
4 — Location or a location substitute. Most tourists want to be as close to tourist attractions as possible. Ideally your unit is in the city center or an equally attractive location. But don’t despair if you’re not. People will sacrifice location if a viable substitute exists. Is your unit cheaper than better located spots? Are you in a quieter part of town? Can they get more living space? Are you near something else that is appealing?
Remember that most guests aren’t intimately familiar with your city. People fear the unknown. Assuage that fear. Give your guests help when it comes to the location. It should be a prominent aspect of your listing so people know what to expect. When they arrive, you need to help them with where everything is located. Where is the public transit? Where is the nearest supermarket? How do they get to prominent places? These things help immensely!
5 — Great reviews. Everything you do should be aimed at getting 5 star reviews. Getting deducted 1 star is a big deal on Airbnb. Many guests would never consider staying in a place where the reviews aren’t perfect. And if you slip below 4.5 average, your business is in trouble.
In all honesty, you should start by vetting your guests. Are they making unreasonable requests at the beginning or do their reviews show any warning signs of trouble? Reject them if necessary. Then when they check-in, you should ask your guests what you can do to earn a 5 star review. This is especially important for early guests, as you establish your site reputation.
Good reviews will make your business thrive. Anything below 4.5 will cause it to fail. Reviews will determine whether you’re winning or losing in the Airbnb game.
6 — Confidence in your responsiveness. The biggest difference between Airbnb and hotels (for a guest) is that if they have a problem in your unit, you are the only person that can fix it. A hotel allows them to call the front desk to resolve any inconvenience. Worst case, they switch to a different room.
A guest wants to know you’re available 24/7. While that may sound unreasonable to you, the average guest won’t take you up on it. But accidents happen. They might lose their key, get sick, or have a plumbing problem. You’re their lifeline in a foreign city.
Give them confidence that you respond reliably. They should have your phone number and be confident in contacting you. This 1v1 relationship is a the biggest reason why bad reviews happen. And guests will overlook accommodation flaws if you’re overly kind and reliable for them.
7 — Safety perception. There are many components to safety. The first is obvious. You might know that your neighborhood is safe from violence, home invasion, theft, etc. However, the guest has no idea. It might seem silly to point this out but it’s important nonetheless.
Second, the guest wants to feel safe from anything else that may go wrong. Do you have a working fire alarm? Any health hazards (lead paint, asbestos)? Insect or other pest issues? Seriously, guests think about these things. It’s fear of the unknown! Don’t dismiss any concerns or issues they have. The best thing that can happen is their trip is uneventful.
Finally, they want to feel safe from the possibility of a bad thing happening. That’s where your responsiveness comes in. If they have a health issue, they want to know someone can direct them to a doctor. If they get lost, they want to know you can help them find their way. If they get pickpocketed, they want a friendly face to help them resolve their troubles. Being proactive in your responsiveness is great. And reacting decisively to any issues (real or perceived) is critical to a positive guest experience.
8 — Pricing (absolute and relative to peers). You really need to get pricing right. Remember that EVERY guest will be on Airbnb’s search site looking at your listing versus competitors. If you fail in competitive pricing, you’ll never book a guest.
There are many ways to do this right. First, make sure you are competitive to your peers. Find comparable listings (quality, location, etc) and ensure you’re pricing it within range. Second, you want the guest to feel like they are getting a good deal. Discounts and other promotions help! Same with comparing it to hotels (which are typically more expensive).
9 — Quality Control. The unit needs to be as close to perfect as possible. Don’t assume a quick clean will make the unit ready for your next guest. You need to be diligent in ensuring quality. What are some of the main things to focus on?
- Absolute cleanliness. The smallest imperfection can create disgust from a guest. Are there stains on your bed linens or towels? Don’t let guests assume where those came from. Are there spots in the corners of your bathroom? Did you fully clean all your dishes (so they shine)? Even a minor cleanliness issue can create mistrust among your guests and show up in your reviews. This has to be perfect.
- Does everything work properly? Wifi, water heating, laundry facilities, etc. It would help to do a quick test before the guest arrives.
- What are some common things that happen in a home? Drains get clogged. So test that ahead of time. Filters get dirty (AC, vacuum, dryer, etc). Light bulbs go out over time. Test them and replace all the missing ones. TV remote and other batteries go out. These things are easy.
- Be proactive. There are a few things that can easily go wrong (through no fault of your own). A good example of this is bed bugs. Travelers can unknowingly transport bed bugs through their luggage or clothes. Once they’re in your apartment, you have a big problem on your hands. So look into ways you can proactively avoid problems like this.
- Change the locks periodically. Past guests can easily copy your keys. Ditto for wifi security.
- Make sure your place is maintained. You don’t want to have a flood or heating issue because you didn’t do regular maintenance.
- Keep the fire and carbon monoxide monitors working
- If there’s anything that can cause a safety issue, check it out. For example, if you have any outdoor equipment, cooking machines, etc periodically make they are in good working order.
II. A Little of This Goes A Long Way
Most hosts de-emphasize or even ignore the things from this section. It takes a little extra time or money to do such things. But these are the aspects of your accommodation that linger in the guest’s mind and they write about in their reviews. This is going from good to great!
10 — Being especially well equipped. The rationale is this: spend a little more up front and have happy guests for years. That’s worth the investment.
A lot of hosts think it’s unnecessary to equip the apartment with anything beyond the bare minimum. But that’s flawed logic. Guests will inevitably want to use something they have at home and feel disappointment when you don’t have it. Disappointment isn’t an emotion you want from your guests. It leads to mediocre reviews.
What should you have?
- Iron/ironing board
- Washer and either a dryer or drying rack
- Hair dryer
- Soap, shampoo, etc
- Plenty of towels
- Extra bedding supplies
- Garbage bags
- Cleaning supplies (vacuum, dish soap, bathroom cleaners)
- Well equipped kitchen (pots/pans, silverware, plates, cups, and anything else used for cooking)
- Napkins, paper towels, toilet paper
- Coffee and tea makers
- Basic condiments and spices
- Something to drink for the first night or two (water, milk)
- Extra supplies (batteries, light bulbs, tape, tin foil, plastic bags)
- First aid kit
- Air quality (plants, fan, air conditioning, heating, etc)
- Clothing space (closet, hangers, drawers, coat hooks, laundry basket)
- Parking access
- Children equipment (if you are targeting families)
Some of these things are expensive but necessary (a washer). Others like extra towels are incredibly cheap. But all of these things will be desired by a future guest. Why not provide each for them and give them the convenient experience they seek!
11 — Something unique. One of the bad things about a hotel is that they are all the same. Some might decorate a little better or have special luxuries but usually it’s a simple room without much variation.
This is why Airbnb is so nice! You can do something unique and memorable. It might be a special decoration or room theme. Maybe you have a special in-unit activity. Or perhaps you want to show guests a unique aspect of your building, neighborhood, or city.
The idea is to leave something memorable in their mind. Make their stay emotional rather than soulless (like many hotels). They are more likely to leave great reviews, tell friends, and repeat their stay.
12 — Instructions for your unit. Most hosts will give their new guests a tour at check-in and explain any nuances of the unit. However, written instructions are very helpful as a supplement. How do you work the washing machine? How do you work the tv/cable? How do you work the coffee machine?
Every setup is slightly different. Don’t assume your guests will just figure everything out. The last thing they want to do is break something by doing the wrong thing. So make it nice and easy on them. Instructions will take you 5 minutes to write down.
13 — Guiding your guests. This action doesn’t take very long or cost any money. Spend 30 minutes guiding your guest around the unit, building, and neighborhood. Show them where the nearest coffee shop is located or where the local public transit stop is. It’s such a simple thing to do and helps guests develop comfort. You can also get to know your guests and develop rapport with them. That helps when it comes time for reviews!
14 — Specific (not general) check-ins. While you don’t want to linger forever (your guest is probably tired from traveling), you want to be comprehensive in checking them in. Make sure they know what everything is in the apartment. Help them learn to work your appliances and equipment. What other things can you do?
- Make sure they can connect to wifi and it is working correctly
- Show them how to work the tv remote
- Show them how to work the washing machine
- Where do you throw away garbage?
- Where are they located on the map? Which direction do they walk for common things?
- What is the closest supermarket, restaurant, coffee shop, mall, transit station, etc
- Any building amenities they need to know about (gym, common spaces, pool, etc)?
- Make sure they can work the lock
- Show them your parking spot and any rules
- Any other special nuances about the apartment
- Leave contact details
Consider making this a checklist! That way you don’t forget anything.
15 — Flexibility. Travel plans change regularly. They might want to extend, shorten, or alter their reservation. They might have more or less guests than the reservation. They might have a delayed flight. Their flight might arrive at inconvenient hours.
You don’t have to be flexible. Airbnb has a policy on all these things. However, a good host will accommodate their guests. Even if they lose some money on it. It’s better than sending your guests away unhappy. This is part of running a business, even if you are inconvenienced.
16 — Backup options. What happens if something catastrophic happens while your guest is staying there? For example, the electricity goes out for >24 hours. Or your home is flooded by a bad storm. You need to plan contingencies for such emergencies.
Your guest doesn’t need to know about any backup options. 99% of the time you won’t use them. However, if you do need them, you’ll look like a great host by helping them out. Leaving them stranded is not an option. So prepare to book a hotel or alternate unit if the worst happens. Prepare to cancel the booking and refund their money. Prepare for any and all emergencies ahead of time. That 1% of the time it actually happens, you’ll be glad you were ready for it.
17 — Local flavor. This is another differentiating factor versus hotels. Most of the Airbnb guests cite “living like a local” as a chief reason for choosing this accommodation type. So let them live like a local. That doesn’t just mean having a kitchen and living room furniture. It means they have some connection to the location they are traveling to. How can you do this?
- Planned activities
- Local tours
- Other customs or cultural items within the unit or building
You can also get creative and treat your guests to something you would do as a local. Let them join you or experience something based on your recommendation or referral. Give your guests an experience beyond the main tourist areas.
18 — Rules but not obsessiveness. Being transparent about your guest expectations is a good thing. For example, asking them not to wear shoes in the house or make noise between 10pm — 7am are good house rules. It ensures you’ll feel comfortable with guests and they’ll feel comfortable in your home.
However, avoid being obsessive. Some listings have a 15 point list of all the rules of the home. That’s excessive. Your guest shouldn’t feel burdened; they should feel like they’re at home. A mutually respectful home!
19 — Honesty. This one may seem counter-intuitive. However, it can work in your favor.
Let’s start with the listing. Not every unit is perfect. If it’s located centrally and has luxurious features, it will be more expensive. If it’s priced more reasonably, there will be flaws. Be up-front about them. No apartment is ever perfect. While you don’t need to highlight imperfections, it doesn’t hurt to mention trade-offs. Better than disappointment or missed expectations.
Once the guest arrives, make sure they know if something doesn’t work well. If the wifi loses signal and you need to reset the router often, TELL THEM! Better than assuming you have faulty internet. If your neighbors tend to throw loud parties, tell them to contact you if they are out of line. These things help!
And finally, if a guest encounters an inevitable problem, you can apologize but also make sure they know it’s just part of having a home. They are probably used to problems in their own house or apartment. They happen. Nothing is perfect. Make sure they remember that sometimes things go wrong and are beyond control. Most will be understanding and not dock you on reviews.
20 — Recommendations. This one is simple. You should have a packet filled with recommendations for your guests. Sure, they can go on Tripadvisor and see what other travelers say. But sometimes a local knows best. Write down your favorites so your can guests can enjoy them. What things should you recommend?
- Coffee shops
- Logistical items or services (the best cell phone carrier, taxi service, dry cleaner, etc)
III. The Things The BEST Hosts Do
These are entirely unnecessary. You can run an ultra-profitable and well-rated business without doing any of these things. But if you decide you want to be “The Best”, it’s surprisingly easy. 99% of other hosts won’t do these things, which makes your listing stand above anything else in your city.
21 - Food and drinks. The best hosts welcome you with some basic food/drinks. Coffee/tea. A bottle of wine. Bottled water in the refrigerator. Baked goods. Chocolate. Fresh fruit. It’s a really nice gesture and helps you feel at home. It does cost money so make sure it’s worth the investment. But remember that many of the top hosts do such things.
22 - A special offer in the city. As a local, you probably have connections around your city. Friends/family operate businesses and you probably frequent certain establishments. Top hosts will share these connections with guests. You might even make some referral revenue. If you know a great restaurant, try to get a 10% referral fee or get discounts for your guests. Everyone loves special deals!
23 - Guiding guests around personally. Some of the best hosts will spend time with their guests. Not every guest wants it. But many guests would love to spend time with a local. You can guide them to local hangouts or things off the beaten path. Or you might just have a beer with them and talk about your city, provide recommendations, etc.
If guests wanted to spend all their time alone and surrounded by strangers, they would probably choose a hotel. Many would love to interact with a local. This is especially true of solo travelers, long-term guests, and foreigners that don’t have an easy avenue to meet people.
24 - Handling logistics (transportation, communication, etc). Traveling is tough and can be overwhelming when you’re in a new city. Hotels are much easier. They are easier to locate and you don’t have to coordinate a check-in. They have room service, a concierge, and other services.
With Airbnb, sometimes the travel is a huge hassle. Which is why the top hosts help alleviate some of the difficulty. What can they do? A few examples:
- Pickups from the airport
- Getting a SIM card (for foreigners)
- Getting a public transit card in advance
- Providing transportation like a bike or even a car
- Helping them with delivery services (food delivery, grocery delivery, etc)
These are some really nice features. It does require going above and beyond. But it helps the guest a lot and almost guarantees they will like you.
25 - Extra security. Continuing with the theme of safety, sometimes great hosts will take that to another level. Maybe they provide a safe for your most valuable items. Maybe they have an in-home alarm system. These things really give comfort of mind!
26 - Supreme comfort. Some hosts take comfort to the next level. This the guest’s temporary home after all! What might they do?
- Soft blankets
- Tempurpedic mattress
- An ergonomic business setup (monitor, chair, desk, etc)
- Extra heating or cooling systems
- Handheld or chair massage devices
- Elaborate showers or baths
You get the point. These aren’t difficult things to provide and yet they’re well appreciated by guests.
27 - In-room entertainment or novelties. While travelers will typically spend most of their time exploring the city, not all do. Some just want a quiet place to live and work. Some are staying long-term and using the Airbnb unit as a temporary living situation. So how can you keep them entertained while in the unit? Some examples from top hosts…
- Musical devices like guitars, keyboards, etc
- Streaming services like Netflix, Hulu, and Spotify
- An advanced cable or satellite subscription
- Books, board games, card games, DVDs
- A gaming system (Xbox, Playstation, etc)
Alternatively, you just get creative! Make the guest’s association with your unit one of fun and games! You’ll stand out from all the other simplistic units.
28 - A memorable experience. Something about the experience at your apartment should be memorable. This is what guests should rave about in their reviews. The best hosts stand out from the reviews where guests aren’t describing the unit but some other magical part of their stay. You want them to tell a story that other prospective guests will read when seeing your listing!
How you get there is up to you. But you want guests to have pictures from their stay at your place. Stories. Memories. Invoke positive emotions and you’ll do really well on Airbnb.
29 - Anticipating travel needs. When guests travel, they often have to buy a bunch of things. Maybe it’s because they forgot to pack simple things. Or maybe it’s just a non-customary thing to pack. Some examples…
- Insect repellent
- Sun lotion
- Bandages or other first aid products
- Bathroom cosmetics (Q-tips, tissues, etc)
- Phone chargers
The best hosts anticipate what you’re going to need and provide it in advance. Ultra helpful!
30 - Allergen care. We all have different allergies and studies show that many allergens come from inside your home. A really considerate host will address this situation. They’ll clean out air filters. They’ll have their carpets cleaned. They’ll have different pillow types. They’ll buy hypoallergenic laundry detergent.
This is a great example of thinking in advance. The last thing you need is a guest leaving early (or angry) because their allergies flare up. Make sure the air quality is good in your home!
31 - Special Care. Every guest is coming to your home for a specific reason. And they all have different needs/wants. A business traveler might prioritize wifi, which may prompt you to upgrade the internet. Or you might help them with professional events in your city. A long-term stay (>1 month) might want you to replace linens or offer complementary cleaning. Families may need activities or a recommended babysitter for their kids. The best hosts go above and beyond for whatever guests need most!
IV. The Business Things You Have to Do
You might have a great listing. You get great reviews and have many happy customers. However, you’re running a business. You want to maximize your profits. So how can you do this? HINT- it’s more than just attractive properties and good reviews! Let’s explore the things a great host will do on the business end…
32 - A Price Optimization strategy. Every Airbnb business needs to optimize their pricing. And this one can pay off in huge ways! The average host will look at the competitors and arbitrarily choose pricing. But this is a very amateur way of conducting your business. Instead, you should run comprehensive pricing models. What will those models show you?
- Exactly how much you should charge
- Surcharge for weekends, seasonality, etc
- How your price drives different occupancy levels
- What should you set your weekly and monthly discount at?
- How to grow your price over time
I understand, most hosts don’t have financial modeling expertise. So let me help you! It’s a low fee service and an investment that will repay itself many times over. See Section V below for details.
33 - Profitability model. This goes hand in hand with the pricing model but takes it to the next level. How much should you invest in all the things we discuss here? How much can you expect to profit when you deduct fees and operating costs? How can you lower those costs? How can you get the best mix of occupancy and price?
I can help you make your Airbnb business really sophisticated. See Section V below for details.
34 - Insurance. A lot of Airbnb hosts neglect insurance despite its vital importance. So what kind of insurance do you need? Definitely all the insurances for owning a property (homeowners, flood, etc). And you need to look at the policy and ensure it covers you for properties used commercially. Likewise, you also need a good liability insurance.
Insurance varies by location so I can’t help you with specific recommendations. But it’s something to do appropriate research on and cover yourself. The last thing you want is to have personal liability for any issues. This can not only sink your business but affect your entire life.
35 - Taxes. In many jurisdictions, Airbnb collects a city tax for accommodation. This helps a lot. But what about other taxes? You’re generating profits. That belongs on your income taxes. You might owe other sales or VAT taxes. And depending on the jurisdiction, you might have to take care of other taxes/fees.
This varies with every city in the world. So we’ll recommend talking to local tax accountants or attorneys to get your situation in order.
36 - Abiding by Terms of Service. Airbnb recently came under fire for discrimination among hosts. They now have a strict policy to ensure you aren’t discriminating against prospective guests. Definitely abide by this, as consequences can be severe. However, also be reasonable. If you don’t want to host bachelor/bachelorette parties, children, pets, etc then you’re free to make such choices.
37 - Multi-platform and external ads. Airbnb is great and the best platform for your accommodation listing. However, it’s silly to restrict yourself to this alone. There are many accommodation booking sites that you can use. And a really sophisticated operation will even advertise via other methods (travel partnerships, your own website, etc). You need to keep your calendar synced and updated among all the booking platforms. However, diversify which ones you use to maximize profits. It’s as simple as copy/pasting your listing.
38 - Regulatory risk mitigation. Airbnb is coming under increasing regulation. Many studies show that most listings aren’t compliant with regulations (or the city hasn’t yet specified their regulations yet). This is at multiple levels. Countries, states, and cities have accommodation regulations. There are zoning and land use laws. There are commerce laws. Taxes. Required permits. Reporting. Unfortunately, governments regulations are the burden of doing business.
That doesn’t even count the other risks you have. There are neighborhood associations, building codes, and leasing agreements to contend with.
You’re putting yourself at legal risk here. Learn what your requirements are and try your best to follow them. If not, you have to plan for any consequences.
Understand that there’s also a great outcry against Airbnb and other short-term rental sites. Residents are angry about rising real estate and rent costs and blame Airbnb (despite realistically only being a small contributor to this problem). Others are upset about tourists invading their neighborhood or buildings. Regulations will only amplify. It’s up to you to keep track and comply with them.
39 - Willingness to invest, buy, sell. You might be reading this and only contemplating starting an Airbnb business. Or maybe you’re looking to invest more in your current Airbnb property and want some ideas of how to do it. Or maybe you’ve done it before and are considering a second or third property.
A great businessperson will always be willing to expand as market conditions dictate. If you’re doing really well, consider further investment. If you aren’t doing well, consider how to turn that investment around. If you’re not yet in the game, now’s the time to start!
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