Looking to bring in some extra cash this holiday season? With peer-to-peer housesharing sites like Airbnb, HomeAway, and Roomarama growing in popularity, renting out that spare bedroom or second home could be an attractive option.According to Collaborative Consumption, the average New Yorker makes $21,000 per year renting out their space on Airbnb.
Aeronautical engineer Jose Roberto Barros rents out his townhouse in Kissimmee, Fla., and apartment in São José dos Campos, Brazil, through Airbnb and says he’s thrilled with the service. Rental fees on the townhouse cover the mortgage, management company, and cleaning costs, so during peak travel months, he makes a profit.
But not all hosts are as happy as Barros. In fact, one Airbnb host in San Francisco blogged about guests trashing her apartment this summer, which prompted the company to announce a $50,000 guarantee to hosts and a 24-hour customer hotline.
If you’ve considered signing up for one of these services, then consider these tips on protecting your property and maximizing your earnings.
1. Check your local laws. Depending on your local zoning laws, charging money for a short-term stay could turn your home into an illegal hotel. “If you’re doing a short-term rental, there can be hotel taxes that are supposed to be charged,” says Jesse Holland, president of Sunrise Management & Consulting in Albany, N.Y. “You’re actually running a business.”
For renters, housesharing can get into even more grey areas. As a property manager, Holland says he’s concerned that guests aren’t vetted by landlords the way a tenant would be, and that extra guests increase his expenses for things like water, sewage, and trash removal. Depending on the terms of your lease, your landlord may have the right to evict you. “Our leases say you cannot have a guest for more than a certain number of days, and so you could be in default of your lease,” he explains.
Also note that the money you earn from housesharing is generally taxable.
2. Screen your guests. Housesharing sites offer features like linking to someone’s Facebook profile, messaging or calling prospective guests, and reading guest reviews or recommendations before you approve their reservation. Barros says he likes to call prospective guests using Airbnb’s Voice Connect feature before they book to ask how they plan to use his property. “Partying in our properties is the main fear that owners have,” he explains, adding that he’s denied a couple of reservations for this reason. Calling guests also eliminates any questions they might have about the property, so Barros finds that this is good way to seal the deal and put them at ease.
A few guests have asked Barros if they can communicate with him and make a reservation outside of the website to bypass booking fees, but Barros prefers letting the site manage his payments and communications with guests. “Airbnb charges the guests security deposits, so they don’t have to send checks,” he explains. “It gives me protections as a host. In case there’s ever a problem, they’re storing our messaging.”
3. Set some ground rules. Whether you’re renting out a property remotely like Barros or letting guests crash on your couch, you’ll want to set expectations for guests by posting the house rules on your listing. For instance, Barros charges a $250 fee for smoking in his property. In one instance, a guest complained that one of the bedrooms smelled like smoke, so Barros called Airbnb and they assessed the fee.
Barros’ house rules also state that he does not allow early check-in or late check-out because the cleaning service needs time to turn over the space. One guest wanted to check in at noon, so Barros suggested the guest hang out in the clubhouse until the cleaning crew finished. “I told him ‘it would be damaging to my image and it’s not a good experience for you,’ so he understood,” he adds.
4. Find the right price. These services let hosts determine the amount they charge, so you’ll want to do a little homework before you arrive at a price. Set it too high and guests may choose other options. But set it too low and they’ll think there’s something wrong with the property. Barros looked at what other properties in the other area charge and also factored in his expenses and the property’s amenities.
Depending on the location, seasonality may also play a role in pricing. “October and September are hard to book in Florida, because September is hurricane season,” says Barros. “But at Thanksgiving and Christmas, you can charge more.”
5. Promote your property. Housesharing sites are a competitive marketplace, so the more detailed your listing and the clearer your photos, the better. Barros initially shot his own photos and guests commented on how the property was nicer in person than expected. But after he tweaked his description and Airbnb sent a photographer to shoot verified photos (which the site uploads—the owner can’t PhotoShop or otherwise alter the images), his bookings improved. “The photographer gives me credibility,” he says.
Barros also makes an effort to quickly answer questions, which several guests noted in their reviews. “As soon as I have a message from a customer, I reply,” he says. “I have the flexibility now that you have cell phones with Internet. I always try to be polite and anticipate their needs.”