How To Start Airbnb As A Beginner? – A Few Things To Understand
Once you become an Airbnb host, you will need to be less involved than starting some other types of business from scratch. However, you will also need to put more time, investment, and effort into your business if you want to start making regular income. You will need to learn how to make your Airbnb location better in all aspects so that your location gets more good reviews. If you want to learn how to start Airbnb as a beginner, read on.
In this article, you will learn some of the general components of Airbnb businesses. Furthermore, we will discuss how to start an Airbnb business and what steps you will need to take as you start your business. Furthermore, we will also give you details regarding how much you can make from an Airbnb business and what taxes you will need to pay to Airbnb to run your business properly.
Starting An Airbnb Business – An Overview
According to Business.com,
“Hundreds of thousands of Americans now earn money renting out vacation properties through Airbnb and other platforms. Many do it as a side hustle to increase their income, but a small and growing number are turning Airbnb hosting into a full-time job – and earning six-figure incomes through doing so. The opportunity to make more than you do now and build up a money-making property portfolio is intriguing.”
Before Airbnb, tourists used to look for hotels for their overnight stays. Nowadays, in the United States, almost sixty percent of travelers prefer to book Airbnb places as compared to hotels. Currently, the Airbnb platform has more than six million listings in more than one hundred cities throughout the world.
Airbnb is basically a platform where travelers can connect with hosts to stay temporarily in one place. Starting an Airbnb by renting your place is a useful and profitable choice if you are figuring out how to start a business. This will further allow you to capitalize more in the booming market.
On the platform, the hosts can post pictures of their entire apartments, houses, hotel rooms, private rooms, shared rooms, etc. Based on preferences, locations, prices, and ratings, customers can choose what they are looking for. Many people prefer Airbnb since they get a more personalized experience at lower costs than conventional hotels.
How To Start Airbnb Business? – Steps To Follow
Before starting your business, always check whether there are restrictions from the local government or not.
According to Hubspot,
“Regulators often restrict Airbnbs to safeguard against landlords evicting tenants in favor of operating short-term rentals or to ensure neighborhoods stay quiet and residential. Depending on the location, this means you may have to register your Airbnb with the city, pay additional taxes and fees, or even modify the minimum number of nights required for each guest.”
The following are the steps to follow if you want to start an Airbnb business:
Check whether you need permission to open Airbnb or not. You can ask your landlord (if any), co-op board, or homeowners association in the area. This will allow you to find out whether there are restrictions or not.
Prepare the place that you want to post as your Airbnb space. You will also likely need to invest in the place to make it more attractive for travelers and more comfortable. Check throughout the place what you can improve to enhance the experience of your guests.
Set the price of your place by looking after all the charges as well as your profits. Airbnb charges 3% for the booking amount. However, if you host your place through Airbnb Plus, the charge is higher in that case. Furthermore, if your cancellation policy is stricter, then you will need to pay Airbnb more.
List your space on the Airbnb platform. While listing, do not exaggerate things, and list only those stuff that are actually in the place. This will help you in getting better ratings.
Host your Airbnb space once a traveler chooses your space. You should be aware of your potential tenants based on age, demographics, financial capability, etc.
How Much Can You Make Through An Airbnb Business?
According to Airbnb’s official website,
“To get a sense of your potential profits, estimate your upfront costs – for expenses like decor, wifi and other basics to get your space ready for bookings – as well as ongoing or recurring costs, such as linen, toiletries, cleaning services or mortgage payments. Be sure to note maintenance expenses too, such as needed repairs or annual chimney inspections.”
On average, in the United States, according to Airbnb, a host makes more than $9000 per year. However, those numbers vary from time to time and from place to place. Some hosts even purchase or lease apartments and homes so as to rent them out full-time. Hence, if you are starting out on Airbnb, and want to rent your space for a few days, do not expect to earn this amount.
Taxes To Pay For Airbnb Business
The following are the types of tax applicable to Airbnb businesses:
- Sales Tax: The local government might require you to collect sales tax for your guests. Hence, include this charge on bills.
- Income Tax: As a small business owner, you will need to file your income taxes through Form 1099-K.
There are tax deduction options as well on Airbnb. You will be able to deduct certain expenses with your Airbnb business, like mortgage/rent on the property, insurance, repairs, cleaning, etc.
Hope this article was helpful for you in getting a better idea of how to start Airbnb business as a beginner. If you want to start your business by renting your place, follow the steps presented in the previous sections. You can see from the article that since places on Airbnb are more affordable than hotels, travelers tend to prefer Airbnb.
These factors make starting an Airbnb business more profitable. However, you must work on the place to make it more attractive to travelers. If more travelers like your place, you will have the option to increase prices, thereby earning more profits in return. Do you have some suggestions regarding how to start Airbnb business as a beginner? Consider sharing them in the comments.
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