how to airbnb your house?

Whether you already manage a vacation rental business or are considering leasing your second home, it’s highly likely you’re considering listing on Airbnb. As of 2022, there are 2.9 million Airbnb hosts worldwide, with 14,000 new hosts joining every month. It’s quite literally the place to be.

In November, Airbnb announced its Winter Update, which included the release of Airbnb Set Up. With this latest initiative, new hosts are matched with an experienced Superhost to help them get started. Joining Airbnb has never been easier! This simple yet comprehensive guide gives you step-by-step instructions on how to turn your house into an Airbnb – and succeed!

Like any successful entrepreneur, it’s essential to understand what you’re getting into. Putting your house on Airbnb is the easy part, but earning a sustainable income depends on various other factors. Let’s take a look at the most important ones!

In many areas, hosts will need to meet specific criteria to operate a legal Airbnb rental. You may be required to register your property or obtain a license from your regional government. Get in touch with your local city hall to see how feasible it is and what you need to do to proceed.

In addition, you may have to collect taxes from guests, in which case, they should be aware of the exact amount prior to booking. In specific jurisdictions, Airbnb will calculate and collect occupancy taxes on the host’s behalf, however, if your area is excluded from this feature, you will be required to collect them manually.

Homeowners in the U.S. are obliged to pay property tax, which varies from state to state. Your property tax rate may also fluctuate depending on your average rental term, your proximity to public services, and the potential for development on your land. This will be calculated by a tax assessor who is likely a local government official.

Moreover, you could be legally obliged to pay taxes on any earnings from your short-term rental business. Make sure you know all of your required taxes in advance of listing your property as this will help you budget and avoid any fines.

Bonus tip: Wondering how to make your home an Airbnb in California, Florida or Texas? Check out our in-depth guides about the laws and regulations of those U.S. states (and their main counties and cities!).

Ideally, your property is based in a popular location with an array of attractions or natural wonders like national parks or beaches. Most of your marketing will take care of itself in this case. Try including the name of a top attraction in your listing title and add the distances to each one in the text. This will help potential guests find your accommodation more easily when doing Google and Airbnb searches.

If your property is in a lesser-known part of the world, you should be prepared to invest more in your accommodation to ensure guests want to stay because of what you offer, as opposed to the location. Consider upgrading your vacation rental’s home entertainment system or investing in popular amenities like a ping pong table, hot tub, or basketball hoop.

To give yourself a leg up over other hosts in your area, why not offer a transfer service to your guests free of charge or at a reduced rate? Offering to take them to airports, train stations, and recommended attractions may be the difference between booking with you and choosing a closer accommodation.

One of the best ways to get a good head start is to check out what your would-be competitors are doing. Search for rentals in your area on Airbnb, sort by rating, and find a property that is considered similar to yours. Take note of everything they do well and try to copy or improve those aspects when adapting them to your rental.

You can also see how much they charge for their nightly rates, extras, cleaning fees, and damage deposits. This will give you a better idea when setting up your rates.

Bonus tip: Read the guest reviews and see what they pick out as the main highlights of the rental. If something frequently pops up, then add that to your inventory.

Once you’ve identified why guests would want to book your vacation rental, you should adapt your marketing strategy and your home to meet their needs. For example, are you more likely to attract active younger guests who want to hike, older guests on business, or families visiting the local amusement park?

If you’re beside popular ski resorts, your target customer is probably young professionals and groups. Mention how close the slopes are and consider furnishing your vacation rental to include a mud room, where guests can take off their outdoor clothing and clean their pets.

If you’ve invested in a beach property, you’ll want to figure out the age of the average beachgoer and identify their desired amenities. Providing an outdoor shower, beach toys, and towels will make your guests feel that your property has been designed especially for them.

Bonus tip: Find out what’s on in your area throughout the year and create an events calendar with all the key dates and details. This will help you to understand the booking trends and demographics of your area.

Your home is now ready to welcome guests, and it’s time to get your property online!

Firstly, head to airbnb.com and click on the “Airbnb your home” button in the top right of the home page. You’ll see a quick snapshot of your potential earnings as a host in your area. If you like what you see, click “Airbnb Set Up” and follow the instructions.

If you have any doubts, you can choose to match with a Superhost who can guide you through the initial process and answer any questions. They can personalize your onboarding experience by suggesting ideas, offering advice, and even giving tips for your listing.

This is one of the most important parts of the setup, as it will be how you sell your vacation rental to potential customers. Remember, these are guests looking for a different experience than just a hotel getaway. They want to know why it’s unique, its story, and what the hosts are like.

To save time, you can use Lodgify’s Airbnb Description Generator, which creates personalized titles and descriptions for your Airbnb listings in just a few clicks.

To boost your listing further, you can use SEO keywords in the text, helping your vacation rental appear higher in the Airbnb search results.

Many potential customers will check out your listing’s photos before reading the text, so they must be high quality. You might consider hiring a photographer; however, it’s likely this won’t come cheap. Alternatively, you can check out our tips on how to take professional photos of your vacation rental.

Bonus tip: Learn the art of vacation rental photography in more detail with this free course through the Lodgify Academy. Enroll today and drastically improve your property’s photos!

You’ve done your market research, and now it’s time to apply your rates. The next step is to go to your listings page on Airbnb, click on “Pricing and availability,” and go to “Pricing.” You’ll then click “Nightly price” and “edit” to input your rates.

Remember to customize your pricing for specific dates like Thanksgiving and New Year. Think about how to boost off-season bookings for your vacation rental and implement cheaper rates, special discounts, or lower your minimum night stay.

To make this process easier, you can always rely on dynamic pricing tools, such as PriceLabs or Beyond, to optimize your rates to help you maximize your profits. Using algorithms based on industry data such as seasonality, local demand, and day of the week, your prices are flexible and automatically updated when necessary.

Once completed, press “Save,” and you’re good to go!

Are there specific dates you don’t want guests to book? Perhaps you plan on staying there yourself over the holidays and need to block those dates? No problem. Go to the “Calendar” section, select a listing, and select the desired dates. Under “Availability,” you can select “Available” or “Blocked” before clicking “Save”.

As a new host, you’ll probably want to list your property on several OTAs, not just Airbnb, to reach as many potential customers as possible. It’s highly recommended you use an Airbnb channel manager. A channel manager allows you to effectively manage your bookings and other information, such as pricing, customer data, calendars etc., across multiple platforms.

This automation means you avoid double bookings because it ensures all your listings are connected and all your calendars are synced up. Lodgify’s all-in-one vacation rental software is notoriously simple and great value for money – especially compared to alternative solutions. Also, hosts can access valuable resources, including free courses with Lodgify Academy, a Knowledge Base, and vacation rental guides.

Sounds good? Try Lodgify’s 7-day free trial to see for yourself!

You’re finally ready to welcome your first guests, and you want to make an excellent first impression. Make sure check-in is as stress-free and flawless as possible for you and them. You can do this with good communication straight from the start. Give them a quick message to say thank you for booking and offer to provide them with directions to your property.

You can invest in a digital keyless entry or a portable key lock box for a smooth and secure contactless check-in. Lodgify’s integration partner Jervis Systems is an access management platform that enables you to remotely manage and automate rental property access from your cell phone.

As arrival day approaches, you can contact your guests again with instructions for entry and emergency contact details. It’s also a good idea to reassure them that you are around in case they need anything, but without making them feel like you’re supervising them.

Top tip: Consider leaving a handwritten note and a small welcome gift, such as a bottle of wine or a cheese board. This will immediately impress your guests and make them feel valued.

Reviews are proven to be the third most decisive factor when guests decide on booking a vacation rental. An enjoyable check-in experience is important, but so is a thoughtful check-out. Follow up with your guests on departure day, thanking them again for their stay and encouraging them to leave a review. Recent studies show that only 22% of guests write reviews without being asked.

Having great reviews on your listing will ensure guests continue booking your property in the future, sustaining your vacation rental business. For more guest experience tips to increase five-star reviews, check out this free webinar with Matt Landau, founder of VRMB, and Christophe Salmon, co-Founder of Revyoos.

Although running a vacation rental can be demanding, it’s a very rewarding experience when done right. In 2021, the average annual host earnings on Airbnb was $41,026 in North America and $44,235 in the United States alone. So, now that you know how to turn a property into an Airbnb, it’s time to put what you’ve learned into action.

Guests want everything to be well communicated, they want to feel assured in their choice, and, above all, they want to feel welcome. Let your personality shine through and always keep one eye on the future, whether it’s further investment opportunities, market trends, or simply striving for continuous improvement.

Final bonus tip: Success doesn’t just depend on how nice your vacation rental is but also on how well it is managed. Try Lodgify with a 7-day free trial and see how we can save you time, and effort, so you can focus on your guests.

Offering flexibility and an added revenue stream, Airbnb hosting can be a tempting opportunity for homeowners. Make money off space you’re not using? It seems like an obvious way to get the most from your home buying investment.

Currently, more than 2.5 million people have listed their properties—or portions of them—on the site, making an average of $20,000-plus a year (or more, depending on the location), according to research by Smart Asset. For Americans specifically, Airbnb director of public affairs Nick Papas says the average host makes about $7,200 a year sharing their home on the site.

But as enticing as that extra cash can be, hosting isn’t right for everyone. And for homeowners with mortgages in tow, there are some serious implications to consider before jumping on the bandwagon.

The Legal Considerations

Fortunately, it’s not likely that Airbnb hosting can put a homeowner in breach of their current mortgage contract. At least, “not that I’ve seen,” said Peter Klose, an attorney at Klose & Associates. Klose’s firm specializes in business, real estate and insurance law, and Klose himself has covered Airbnb legal issues on his blog.

Still, that doesn’t mean there aren’t potential legal ramifications to think about. With many cities pushing back against Airbnb and other short-term rental platforms, as well as potential violations of homeowner association policies or even a homeowner’s insurance agency, there are many ways hosting could equal liability. Some cities even require specific licenses and registration to operate an Airbnb.

Essentially, homeowners just need to do their due diligence, Klose said.

“Check that there’s no short-term occupancy rules or licensing requirements in the city,” he cautioned. “Check that your insurance covers what you’re trying to do, and consider incorporating to add another layer of protection from some sort of crazy situation.”

That might be wise, too. Though Airbnb does offer $1 million “Host Protection Insurance,” according to Airbnb host Alexander Ortiz, relying on only this is a ”grave mistake.” “The Airbnb policy is sometimes hard to get a reimbursement from,” Ortiz said.

Typically, hosts need to take out additional coverage from their existing homeowner’s insurer—and the effort can get pricey. “My home insurance has increased substantially,” Ortiz said. “The cost per month has nearly doubled.”

Future Refinances

Legal issues and insurance costs aside, potential Airbnb hosts also need to consider their future financial situation. Though hosting on Airbnb couldn’t preclude someone from refinancing their mortgage loan down the line, it would certainly have an impact on the interest rate they could qualify for—and depending on their lender, that could be good or bad.

For one, not all lenders accept Airbnb-generated income on applications. That means all that extra cash might not count toward a homeowner’s total annual income (or debt to income ratio), and their mortgage rate may be higher as a result.

There’s also the chance that renting out the property—even just a few days a month—could cause a lender to classify it as an investment property, and those, too, equal higher interest rates.

Luckily, thanks to a new initiative from Fannie Mae, three lenders will now count Airbnb income toward refinance applications—Better Mortgage, Citizens Bank and Quicken Loans. According to Vishal Garg, CEO and founder of Better Mortgage, the program has seen big results since launching in February.

“It’s on fire,” Garg said. “We have approved something north of $30 million of loans to Airbnb hosts just since we launched this about a month ago. As more and more Airbnb hosts are understanding that this is possible, we think this thing is gonna become really big.”

Refinancing can have serious benefits for homeowners—Airbnb hosts or not. Not only can it cut down on a loan’s interest rate (and subsequently, the homeowner’s monthly payments), but it can also provide cash to cover tuition, medical bills or, in many cases, renovations and home upgrades.

And for Airbnb hosts, Garg said, renovations are typically the most popular reason for refinancing.

“That's the No. 1 use case,” Garg said. “They’re actually able to do more with their homes, so they can rent out an even bigger part of their home on Airbnb. “

Though you can’t use Airbnb income to qualify on a new home purchase just yet—and the refi initiative is only available with three lenders—that could change, according to Nathan Blecharczyk, co-founder and chief strategy officer at Airbnb. "We’re always looking for new and better ways to empower our hosts and we are hopeful that this initiative could lead to adoption by additional lenders in the future," Blecharczyk said.

Using Airbnb Hosting To Pay Off Your Mortgage Early

Refinancing isn’t the only way homeowners can lower their mortgage payments via Airbnb. Many hosts are also using their income to pay down their loans faster and with less interest.

According to Ortiz, who hosts an Airbnb out of his home in Houston, his property brings in anywhere from $1,100 to $2,000 a month, depending on the season.

“The money generated from our spare bedroom will help us pay down the mortgage substantially faster,” Ortiz said. “Airbnb has essentially allowed us to live for free and then some. Our Airbnb generates one to two times our mortgage.”

The income has also helped Ortiz improve his property—and he didn’t even have to refinance.

“Not only does it cover our mortgage and related expenses, it provides us money to improve the house,” Ortiz said. “We’ve just had new tiles put in our entryway that were paid for completely by Airbnb revenue.”

Ortiz’s story won’t ring true for all homeowners, of course. Total Airbnb income depends on a long list of factors, including market demand, local property valuations and even just the appeal of the city it’s located in.

Plus, even on successful rentals, hosts should be careful not to count on their income for the long haul. Many cities have moved to limit short-term rentals in recent months, and many more have policies in the works.

Buying a Home with Airbnb in Mind

It’s one thing to start renting your extra room years into your mortgage, but buying a home with the intent to rent it from the start? That’s also an option in today’s market.

• Apply to Become an Airbnb Host.
• Get the Proper Paperwork.
• Make Sure You Are Insured.
• Establish Your Prices.
• Solidify Your Cancelation Policy.
• Write a Descriptive Listing.

Using the Airbnb platform—or a competitor such as VRBO or HomeAway—to rent properties can be a lucrative real estate investment strategy, but it also has challenges. In some cases, it may be easier and more profitable to simply rent a property to a single tenant or to forgo real estate investing altogether.

Here are some of the key pros and cons of using Airbnb and short-term rentals as an investment strategy.

A solidly booked Airbnb rental may be more profitable than renting the same property to a long-term single tenant. That’s because you’re usually able to charge more on a nightly basis.

In Seattle, for example, the average apartment rents for $2,197 a month, according to October 2021 data. That represents $24,000 gross income if the tenant signed a 12-month lease.

But what if you were to go the Airbnb route? According to vacation home rental agency AirDNA, the average daily rate for an Airbnb rental in Seattle is about $157, with an occupancy rate of 77%. If you were to rent out your Airbnb for $150 per night for a total of 270 nights per year, for example, it’s possible to rake in $40,500 in gross revenue from the rental. That’s $16,000 more than you’d make through traditional renting.

With traditional renting, you are putting your eggs in a single basket with one tenant. That can work out fine if the tenant is financially reliable and stays for a long time. But if they ever miss rent payments or simply vanish in the night, your income takes an immediate hit that’s hard to replace immediately.

With an Airbnb rental, you are collecting income from different tenants on a regular basis. Each renter represents a very small percentage of your total income, so if any of them cancels at the last minute or otherwise balks on paying, it might not have much impact.

In San Francisco, for example, you can’t rent out any part of a property unless it is your primary residence, defined as your staying there at least 275 nights a year. And it is illegal to have more than 90 nights of “unhosted” rentals, meaning that you aren’t present while guests are there.

In many cases, these restrictions were put in place to ensure an adequate housing supply for residents, but they likely cut down the potential earnings for someone who is looking to make money through Airbnb.

If you own a property and rent it to a single tenant, your involvement in managing the property could be minimal. A conscientious tenant will pay bills regularly, keep the place clean, and mow the lawn. You’ll only need to step in to perform property maintenance or handle the occasional emergency.

An Airbnb property is likely to be more work-intensive, because it will fall on you, the owner, to ensure that it is in tip-top shape all the time. There are also things you will likely need to provide that you wouldn’t normally provide to a single tenant, such as:

You may be able to save yourself time and work by hiring a cleaning service and property management firm to handle all of these tasks, but that would also add to your operating costs.

It’s unlikely you’ll be able to keep an Airbnb unit booked nearly every night right from the start. Bookings through Airbnb come largely from your reputation as an owner. The higher your ratings from past renters, the more likely you are to attract new ones. In the beginning, you may have very few reviews, so you may need to keep rent prices low or offer incentives to get people to stay. Even if you have a great unit in a prime location, don’t assume that you’ll be rolling in rental income immediately.

If you own a property and rent to a single tenant, you may be able to keep that tenant on a long-term lease and collect rent each month, which can provide you with a steady income stream. Airbnb rentals may be far more inconsistent. While in theory, you can rent out a property 365 days a year, you are likely to have many vacant dates on your calendar. You may even prefer to have a vacant day or two between bookings in order to prepare the property for the next guest.

In a 2016 post on Airbnb’s community message board, an owner named Michelle wrote that her properties are booked about 60% of the time, depending on the season. During the humid season in New Orleans, she said, bookings drop to 40%, but her Massachusetts rentals are full 75% of the time during the busiest tourist seasons.

As an owner, you may be able to offset these empty dates by charging more than you would for a typical rental unit, but there’s no guarantee that you’ll come out ahead. Generally, your occupancy rate as an Airbnb host will depend on several factors, including the weather, time of year, and location.

Airbnb and other short-term rental platforms can be very lucrative, especially if you are patient and willing to do the work to attract renters and keep them happy. However, your operating costs will likely be higher than for a traditional rental property, and regulations have made investing in Airbnb hard or even illegal in many places. Be sure to do your homework before taking the plunge into Airbnb investing.