6 Things to Consider Before Hosting on Airbnb
After managing my Tucson, AZ short term rental on Airbnb and VRBO for a full year, I’ve accumulated enough experience to take a step back and think through how my expectations have stacked up against reality. And as both a Superhost on Airbnb and Premiere Host on VRBO, I know what it takes to provide an exceptional experience for guests, and understand what that quality of hospitality requires of hosts too.
Here are six things to keep in mind before you begin hosting your home on Airbnb, VRBO, or another short-term rental site:
You should have some money set aside incase you make nothing.
For some time it felt like every video that popped up on my YouTube home page was about how lucrative and easy it is to make money by hosting on Airbnb. But the truth is far more complicated than those creators lead you to believe.
Hosting on a short term rental site can make you lots of money, but you need to consider the cost of your mortgage, in addition to all of the work and expenses that go into hosting. If you’re starting from scratch you’ll have to furnish and decorate an entire home, as well as buy multiple sets of bedding, towels, etc. You’re replenishing toilet paper, paper towels, and soap non-stop, as well as paying for the utilities and maybe Netflix and Hulu too. In addition to cleaners, you’ll likely need to pay landscapers and a pest company to keep your property in tip top shape. Things will break and repairs stack up. The costs of running an Airbnb or VRBO are not insignificant, yet this seems to be glossed over in YouTube videos and blogs about hosting.
My advice is to go into this new business venture cautiously and not count on making tons of money. To be safe, you may expect around a 50% occupancy rate to base your projections on until you see how it actually performs. Either way, it would be safe to have an emergency fund incase you don’t get as many bookings as you expected, or a major repair is needed.
Understand that it’s a major time commitment.
Even if you’re paying cleaners and a landscaper to maintain the property, as a host you will be tasked with managing your bookings, answering guest questions, and essentially being on call incase the AC breaks or the internet goes out. And if you decide to clean the house yourself, you’ll be adding hours and and hours a week of cleaning and laundry, which is a part time job in and of itself. When my rental is busy and there’s significant turnover, I’m putting in a ton of work, which is only possible because my full time job as a realtor has flexible hours. Keep this in mind if you’re working a strict 9 to 5 and want to take on this responsibility.
Risk and liabilities should not be ignored.
Both Airbnb and VRBO provide liability insurance for hosts, but the risks inherent with hosting people in your home should not be understated. Especially if you have a pool, allow small children, or your home has stairs — it’s important to understand and respect the risks that come with this business. Prior to hosting guests you may want to talk to a lawyer and insurance representative to understand your liabilites and do your best to minimize them.
Good marketing and pricing are key.
Although you don’t have to market your property outside of the Airbnb or VRBO platforms, within those websites it’s vital to showcase your home as best as you can! This means sharing great photos, writing an accurate, yet exciting blurb about your property, and being very descriptive about the amenities, as well as the location.
The importance of good pricing can also not be overstated. I personally use PriceLabs to automate my listing’s prices and make adjustments based on the time of the week, length of stay, and the current demand in my area. Otherwise, you are left to manage pricing yourself, which can get very complicated and may impact your occupancy rate if you’re not consistently making adjustments. Automated pricing means that you can also set up last minute booking discounts and incentives for longer stays, which is another great marketing tool.
Understand that you are opening your home up to strangers.
When you start an Airbnb or VRBO, you already know that there will be complete strangers staying in your home — but it’s essential to truly understand the implications of this. More often than not guests are respectful of house rules, but occasionally you may have a guest who is difficult to communicate with and doesn’t take care of your space. Naturally, these strangers come with an entirely different set of experiences and expectations than you do, and that will impact your interactions with them, even if just over the platform and never in person. While Airbnb and VRBO do their best to vet your guests, you do open yourself to a number of risks by hosting strangers and this is something you may want to discuss with a lawyer.
Never forget that this is a hospitality business.
If dealing with people — whether they have questions or issues arise — sounds like a nightmare, hosting might not be for you. The hosts who really thrive in this business are detail oriented and love going above and beyond for their guests; whether that means gifting a bottle of wine for a romantic weekend stay, or filling guests in on the best restaurants in town and where to go see a beautiful sunset. Airbnb’s have recently gotten a bad wrap for not always living up to basic standards, so when a host goes the extra mile for their guests, it’s usually very appreciated.
Hosting can be a very rewarding experience that pays off, but it takes significant work and has ramifications that should not be overlooked. If you have any questions about hosting on Airbnb or VRBO, feel free to reach out to me at julia@buyselltucsonhomes.com. And if you want to buy an investment property and start a short term rental in Tucson, you can start your search here.
Julia Van Valkenburg, Realtor
OMNI Homes International
julia@buyselltucsonhomes.com
520-275-3514
