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How to Start an Airbnb Business – Complete Guide

Do you have a spare room in your apartment or house? Do you want to earn high profits from your empty house or flat? If yes, then think no further. Start an Airbnb business in your spare space and earn high profits. Becoming an Airbnb host will make you financially stable and sustainable.

Airbnb business is more convenient and profitable than conventional rent. If you can get to share your room for 250-270 days a year, you can get more income than traditional rent.

The concept of space sharing is gradually gaining more importance and acceptability. Hence you can expect growth of revenues over time in your Airbnb business.

Your Airbnb business will need your attention, effective planning, and innovation to stand apart from and ahead of your competitors. These are the primary and most important requirements to achieve success in your Airbnb business.

According to the statistics provided by the Airbnb authorities, in 2021, Airbnb hosts’ income increased by 85% over 2019. Not only that, but new Airbnb Hosts in the US also got increased income in 2021, amounting to over $1.8 billion, 34% more than in 2019. It is evident from these figures that you have a bright future in the Airbnb business.

13 Steps to Start an Airbnb Business

1. Get the Right Knowledge

You must be aware of the formalities of the Airbnb business before you embark on it. First of all, get to know whether you need the permission of the homeowners’ association, or landlord (if you wish to sublet for Airbnb) to start your space-sharing business. You have to know the standard rates of rooms per night in your area.

Rents vary according to the types of rooms, their facilities, and their condition. You have to rate your property based on its location, standard rates, and the facilities you can offer. Also, get information regarding your competitors in the area. If you have several properties in different areas, you can make a comparative analysis of rents and income according to the area.

2. Planning and Preparation

In the next step, you have to make a well-structured plan regarding your Airbnb business. You need to prepare the space, build amenities, furnish them and arrange for regular cleaning and sanitization. Whether it is a room, a suite, a floor of your house, or your entire house or apartment, you need to make it well-furnished, and comfortable.

In addition, provide advanced features like keyless locks, a washing machine, a microwave, a TV area, clean linen, and cleaning and washing service for guests during their stay. Plan to provide extra care and special touches for your guests so that your Airbnb rating is higher. This will give you more guests around the year. Also, estimate the expenses that you have to make for these arrangements.

3. Create a Business Plan

Make a complete and detailed business plan for your Airbnb business. It must include points like

  • Mission and Vision
  • Why Airbnb
  • Comparative analysis of rent and Airbnb
  • Details of Properties
  • Details of Facilities
  • Initial Expenses
  • Manpower Needed
  • Marketing and Publicity Plan
  • Expected Profit from the Business

Be realistic and factual in discussing each point. That will give you a clear picture of your business covering all the aspects.

4. Select Services

Decide on the services you want to offer in your Airbnb business. If you have more than one property or plan to buy one, decide how much of your property you want to allocate for the Airbnb business. This decision is important because your cost and investment depend on this decision.

5. Name your Business

Find a suitable name for your Airbnb business. It need not be a serious name. Rather it can be a cool and intimate name that indicates fun, pleasure, and welcoming the guest. Getting the domain in the name of the business is important from the angle of the website. Therefore find an unusual name.

6. Register your Business

Legalize your Airbnb business in the available formats of Proprietorship, Partnership, LLC, C Corp, or S Corp. You can choose any one of them. However, if you are looking to protect your assets with that of the business, forming an LLC is advised.

7. Licenses and Permits

You will need certain licenses and permits for your Airbnb business. These include the business license to operate a business rental. It may be called a TOT certificate or a Lodgers Tax License. You have to register your small business with the local county agency that collects hotel tax.

8. Tax Registration

Register your Airbnb business for the taxes that apply to it. Since you have to hire employees for this business, you have to get the EIN.

9. Buy Insurance

A homeowners’ Policy is needed for your Airbnb business. Airbnb provides a $1 million Host damage protection in case your property is damaged in any way by the guest during your stay. Apart from that, General Liability Insurance and Workers’ Compensation Insurance are also required for your business.

10. Business Bank Account

A bank account in the name of your business is an essential step. Also, try to get a business credit card from the bank.

11. Start-Up Fund

You will need funds to equip your property for the Airbnb business. Along with that, funds are also needed for the maintenance of the property. The initial investment has to be made in the decoration and upliftment of the property with items like the following:

  • Furniture
  • Furnishing
  • Gadgets
  • Bed and Bath Linen
  • Toiletries
  • Decorative Pieces
  • Dining and Serving Utensils

Fixed costs include electricity, cable connection, tax, insurance premium, licenses and permit fees, salaries, cleaning costs, etc.

12. Hire Manpower Needed

You have to hire manpower to run your Airbnb business smoothly. The persons you need to hire are as follows:

  • Cleaner
  • Chef (if you serve food)
  • Handyman
  • Property Manager
  • Accountant
  • Marketing and Publicity team
  • Insurance and Tax consultants

13. Have a Marketing Plan

The first advantage of your Airbnb business is that Airbnb has a large marketing network both online and offline and you can use that network as part of the business. However, you have to make efforts to improve your ratings and get more guests for getting more profit.

a) Publicity

Make good publicity of your business with good photographs of your rooms and the facilities you offer. Use your website as well as create pages on social media to make publicity for your business. This will help you in getting more acquainted and get higher rankings.

b) Create a Website

It is essential to make a website for your Airbnb business. Nowadays, most travelers search for properties online. If you have an online presence and if the customers can see your property online with more details, chances are more that they will contact you.

c) Cleanliness

Keep your property fresh clean and good-looking all the time. Put extra effort into maintaining cleanliness. Use good room fresheners and change the linens every day.

d) Contact Bloggers and Journalists

Take photographs of your Airbnb business and get in touch with bloggers and journalists for good coverage of your business. This will make your services more popular and get you a higher ranking.

e) Join Vacation Rental Forums

Join Vacation Rental forums and interact with others to get informed on facilities and learn new ways to improve your service.

f) List your Business with Tourism Websites

Enlist the name of your Airbnb business on the local tourism websites to get noticed.

g) Create Business Cards

Design good business cards, flyers, and leaflets and distribute them to people to spread your name. Do not forget to create a catchy logo for your Airbnb company.

h) No False Claims

Don’t claim anything about yourself which is not true. Be very honest and transparent about your services, amenities, and other things regarding your Airbnb business. False claims to your guests will tarnish your image.

i) Offer Extra Services

Offer some extra services to your guests. It may be welcomed with a bouquet, flexibility on check-in and check-out time, a special chocolate for the kid, or a romantic touch for the newly married couple. Give some services beyond what is mentioned. A personal touch in your services will get you a higher ranking.

j) Offer Discounts

Give special offers and discounts to guests on their repeat visits, during festival times, or with honeymoon couples. Also, give a discount to referral clients.

Frequently Asked Questions

How Much Money is Needed to Start an Airbnb Business?

The average cost of starting an Airbnb business ranges between $7000 and $10,000. This includes your initial investment as well as the fixed cost and maintenance.

If you wish to have more than one property for the Airbnb business, your cost will be higher. You can get the money as a loan, a mortgage loan, or from investments.

Is Airbnb Business Profitable?

Airbnb business is a profitable one. Airbnb charges 3% of your billed amount (stay per night and other charges like cleaning, food, etc.) from you. The guest has to pay 14% of the billed amount as a service fee. Hence, the more guests you have, the more services you provide, more your income potential. Moreover, income depends on factors like demand, location, and competition. However, you can expect a profit of 8-10% in the beginning. With time and the right planning and publicity, it will increase up to 25-30%.