Airbnb is an extremely successful platform in the field of short-term rental and vacation rental business, which helps property owners and guests connect with at mutually beneficial terms.
The marketplace was built in the niche of hotel alternatives and quite soon gained millions of listings and millions of users. The service is available for single-property owners, small and medium-sized rental businesses, and large companies dealing with hundreds of properties.
Hosts can easily earn some additional money or make this business the main source of income. The service plays the role of a mediator by protecting both parties from risks: hosts feel safe when the guests are verified, and the deal is insured. Guests can familiarize themselves with detailed reviews and find experienced hosts to make sure their stay will not bring unexpected disappointments and plan their lodging in the desired price category.
Pros and cons of investing in the Airbnb business
If you are up to deciding whether to invest in the Airbnb business, here is the list of pros and cons for you to keep in mind:
Pros of becoming a Host on Airbnb:
- You can list almost any property: single rooms, part of a house, or an apartment or rent them out in full, houseboats, yachts, and even castles (yes, such listings also exist!);
- The listing is free of charge. Hosts pay nothing to add their properties to the catalog. To improve the booking rate host can add attractive SEO-optimized descriptions, multiple pictures with captions, and fill out the user profile to make it more informative and trustworthy for users;
- What’s more: hosts are to decide what the price for a night is going to be. The rates can be flexible depending on the season, events, and so on. Listings with flexible and timely adjusted prices are more popular among guests;
- Hosts can benefit from the precise search results: for example, your property has a stunning view of the Eiffel Tower. You can specify that in the listing title, and receive requests from tourists, who are willing to pay for this competitive advantage;
- Additional services are a great upsell opportunity for hosts: not so long ago, the Airbnb website started offering restaurants and experiences from hosts. It is an obvious opportunity to expand the horizons of the Airbnb business for hosts;
- Host Protection is a valuable argument to back up the idea of launching your short-term rental business on Airbnb. The platform is a mediator for secure payments and the protection of your property and your rights.
Cons of starting the Airbnb business:
- Perhaps, one of the most significant risks for hosts is potential damage to their property. Although the statistics say that most of the guests’ stays result in zero damages, there are certain stories of trashed properties after loud parties. The Host Guarantee program will cover the losses if this is supported by the host’s local legislation. However, some things like cash, artwork, or jewelry are almost impossible to refund;
- Additional fees. Like in hotels, Airbnb hosts will have to face certain added fees. Some of them are paid by the guests in addition to the reservation fee, but hosts may bear expenses from their banks for transactions. The listings are free, but the site charges a minimum of 3% to cover the expenses of payment processing;
- Depending on the country, a value-added tax or an income tax should be considered;
- Problems with matching local legislation. Airbnb services may not be legal in some countries. Before creating your first listing, make sure you check out the local zoning ordinances.
Factors to consider before launching an Airbnb business
As you plan to rent out properties for a short stay and get your own Airbnb business up and running, here are a few things to keep in mind:
- You may need to read more about Airbnb compliance with the laws in different countries or consult a lawyer to explain to you the details;
- Consider if you have enough time to be a landlord or consider using the professional assistance of an Airbnb management company (e.g. MasterHost): they are ready to deal with keys management, check-ins, and check-outs, cleaning, maintenance, managing reviews, and communication with guests – tasks that eat up most of the host’s time;
- You may need to write a comprehensive business plan, depending on your goals;
- Consider using professional help for a detailed description, nice-looking pictures, and assistance in creating an attractive listing in general. Sometimes, tiny details decide how many bookings you are going to have.
The Bottom Line
Like other businesses, Airbnb vacation rental business has its pros and cons, takes a lot of time and effort, and implies certain risks. Nevertheless, millions of hosts around the world have already tried the platform, started earning money and creating new experiences for their guests. You can join their team right now.
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