If you’re not hosting your entire family for the holidays, consider … hosting for the holidays. That is, look into listing your home, apartment, guest room or extra bed on Airbnb. The extra income can go a long way toward funding the most wonderful (and expensive) time of the year.
Host earnings vary by listing, seasonality and location, but, as an example, Airbnb’s suggested nightly price for my quaint ranch house in suburban Verona, N.J. ranged from $62 on off-peak evenings to $267 when accommodations are in high demand. (You can use Airbnb’s calculator to get a quick monthly income estimate for your space.)
So, assuming 12 days of Christmas, I could easily recoup most, if not all, of the $967 the average American spent on gifts last year.
If you’re looking for a creative way to fund your upcoming trip to Grandma’s house, here is a crib sheet to becoming an Airbnb host before the winter holidays.
1. Learn the local laws
Check your city or municipal website to learn what laws apply. The taxation and zoning departments are a good place to start. Why?
Many cities require a permit or license to list property and accept reservations from guests. Others have broader restrictions. There are also state tax laws in play. These laws affect what you owe the state, but they also dictate what you’ll have to charge your guest.
For instance, most cities require home-sharers to charge an occupancy tax on stays of 30 days or less. Airbnb hosts can collect this tax from guests through the marketplace in certain metros. In other locals, you’ll have to collect it in-person or through the Airbnb Resolution Center.
If you’re a renter, check with your landlord and, if you own a condominium or co-op, clear your new side hustle with the board before listing.
2. Do a cost-benefit analysis
Listing on Airbnb is free, but there are still expenses and fees associated with your new side gig. Airbnb charges most hosts 3% of each booking’s subtotal (the nightly rate, plus any cleaning and/or additional guest fees you’re charging).
You’ll need to pay taxes on your hosting income if your space is booked for more than 14 days during the year. There are exceptions and certain expenses are tax-deductible, so if you do start hosting, consider consulting with a professional come tax-time to maximize earnings.
Consider ancillary costs too. The aforementioned cleaning fee can cover basic supplies, but you’ll still need to provide and restock basic amenities. Plus, the most successful Airbnb hosts provide little “extras”, like free coffee, first aid kits and/or fresh flowers upon arrival.
Stack these costs against your earnings estimate to determine if hosting is right for you.
3. Update your homeowners or renters insurance policy
Airbnb offers some liability coverage via its Host Protection Insurance program, should a guest get injured while staying in your space. It also offers a Host Guarantee, which covers major damage a guest does to your property. But those policies are no substitute for renters or homeowners insurance — and, if you’re home-sharing, you’re probably going to need to upgrade.
Standard homeowners or renters insurance doesn’t cover commercial activities. We suggest calling your insurance agent. They can walk you through your current policy and let you know if you need additional coverage or riders as a result of your new side gig.
4. Make sure you can meet & maintain Airbnb’s requirements
To stay on Airbnb’s marketplace, you’ll need to:
Provide basic amenities, including toilet paper, soap, sheets, and at least one towel and pillow per guest.
Maintain a high response rate by replying to inquiries and reservation requests within 24 hours.
Accept reservation requests whenever you’re available.
Avoid cancellations. There are monetary penalties for upending a guest’s travel plans ($50, if you cancel more than seven days ahead of check-in; $100, if you cancel less than seven days ahead, with exceptions made in extreme circumstances). Airbnb reserves the right to suspend your account if you cancel three or more reservations in a year.
Maintain a high overall rating. Guests rate hosts on a scale of one-to-five stars for overall experience, cleanliness, accuracy, value, communication, check-in and location. Superhosts — who receive increased visibility in guest searches — maintain a 4.8 overall rating.
If all of the above sounds doable, go ahead and …
5. Create a listing
You can do this via the Airbnb homepage. The marketplace walks you through the major steps.
It’ll ask you a bunch of questions about the space you’re looking to list, including how many beds are available, what amenities you’re offering and special “House” rules you’d like to institute. It’ll also prompt you to upload images of the space, so have at least eight quality photos available when you’re ready to post. (Photos are instrumental to your overall success.)
Airbnb recommends prices for new hosts based on the going rates in the area. It also has a “Smart Pricing” feature, which will automatically adjust the price of your listing, up or down, based on changes in demand. But you can certainly do some supplemental research.
Once your listing is ready for primetime, set your calendar. It lets guests know when the space is available. Hit submit and wait for your listing to post. It usually takes about six hours. Once it’s live, await those reservations.
Happy hosting (and holidays)!
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