What to Consider When Buying a Property For Airbnb

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Today’s story is a guest post from our friends at Short Term Stays. Their goal is to keep your Airbnb calendar full while keeping things simple. What a novel idea! These people know what they’re talking about and here is some advice for anyone looking to purchase a property and turn it into an Airbnb rental unit.

What to Consider When Buying a Property for Airbnb

There’s no denying that the hospitality industry is rewarding and fun, and sometimes it can turn into a full-blown career. And although the home sharing business has become popular to the extent where people are even buying homes solely for the purpose of sharing it on Airbnb, this is a huge step, that requires a lot of strategizing and research.

It’s time to face the truth. No matter what you’ve read or heard about all the lovely sides of the short-term rental industry, it is a serious business and it requires a lot of sacrifice. Many of you will first jump to the conclusion that managing your finances is the main problem, when in fact, there are several other factors that influence your future success as an Airbnb host.

If you’ve really set your mind to it, here are a few pointers from Short Term Stays. With our experience and expertise, we know what it takes to start from the bottom and rise to the top. We present to you the MOST important factors you have to consider before investing in your first Airbnb property.

  1. Property Location

When it comes to becoming a successful Airbnb host, of course you have to know all the ins and outs of the business. This also includes predicting the right location for your Airbnb property. If you already have the luxury to choose your next location, put your ’guest goggles’ on and think. First off, think who you are targeting? What kind of guests do you want to attract? Business travelers, families, or tourists? And if you know which particular group you are targeting, think about what city and location would be appealing to them and why.

  • Which City?

Pick a city that is swarming with tourists and travelers. If you want your Airbnb to have a high occupancy rate, find a location near a successful business center or near a place of touristic value.

  • The Neighborhood Counts!

After you’ve chosen the ideal city, do some research about it. Particularly, do research on what kind of neighborhood is best for your business. Not every city offers tourist-friendly neighborhoods. Now, you may be thinking: ’I’m not targeting tourists only!’ Yes, you’re right, but what about families who are renting your property long-term? Will they opt for a busy and noisy neighborhood, or a quiet and peaceful environment?

  • And Finally, the Street

Don’t forget to think about the street. If you can buy a property on one of the main streets, or even close to it, that’s great! This will automatically attract more visitors. But also consider what the street is like and what your neighbors are like. Will it prevent your guests from having a relaxing and comfortable stay if you’re located on a busy street?

  1. Financial Situation

Before you even decide on the location, you need to make a budget. How much are you actually willing to spend on purchasing the property itself? Before investing your hard-earned money, you need to devise a financial plan, and do it with the help of an expert.

Your financial plan has to include every single expense you’re going to make, from buying the property, hiring professionals to manage it and inspect it, doing repairs, renovating, unexpected costs in the future etc.

Yes, it’s quite complex and you need to plan ahead. But, if you make a great plan you will know exactly what you can buy, and you’ll prevent yourself from going overboard with costs that will land you in debt.

  1. Management Team

This is something not many people take into consideration before making a huge business step like this. However, it’s as essential as having a financial plan. You go out, buy a property, but what’s next? Who is going to manage it?

If you’re relying on your friends or low-wage employees to do everything for you, you’re setting yourself up for disaster, because that’s not how it works in short-term renting.

Who is going to clean and prepare the unit?

Who is going to make the repairs?

If something unforeseeable happens, who is going to quickly jump in and solve the problem?

Who is going to meet and greet the guests?

Who will communicate with potential guests about bookings, reservations, or cancelations?

Who is going to manage the revenue?

These are just some of the major issues you have to solve before deciding to buy an Airbnb property. Once you have a trustworthy and reliable team at your disposal, you can start thinking about you dream property.

From our own experience, we’ve discovered that hosting on Airbnb can be successful only with careful organization and planning. There’s absolutely no winging it. And if you do things right from the start, you’ll see that buying, managing and owning a rental property is quite exciting! Before making one of the biggest business leaps ever, make sure to think hard and be wise.

Huge thanks to Short Term Stays for today’s post!

 

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The Top 5 Mistakes That Hosts Make When Pricing Their Airbnb Listing

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Today’s guest post comes from Ian McHenry of Beyond Pricing. Beyond Pricing is focused on developing pricing software to help hosts & owners maximize the performance of their vacation rental properties. Sounds pretty good right?

If it sounds like something you may be interested in trying out for your Airbnb listing go ahead and signup here!

And now on to Ian’s post….

At Beyond Pricing, we look at a lot of Airbnb listings and we talk to a lot of hosts. We thought we would summarize the top 5 mistakes we see people make when pricing their place on their own.

  • Overbooked and underpriced

This is by far the biggest mistake experienced hosts make. They are easy to spot, because their next 3 months are almost entirely booked. In most cities, especially on Airbnb, a large percentage of bookings happen in the last month and in places like San Francisco, almost half of all bookings are made in the last 30 days. By booking up too fast, you are leaving money on the table. Sure, increasing your price and not having your calendar fill up until closer to the stay date might seem scary, but the alternative is losing lots of money. We provide our users with an easy to understand Health Score to let them know if they are overbooked and can increase their average price. Check out some of our blogs on why your overbooked Airbnb is costing you money and how to figure out the right average price for your Airbnb.

  • Not increasing prices for events

The second thing we look for when someone says they do just fine with their pricing is whether they have increased prices for the top events in the city. There are usually 3-4 events where prices will nearly double in a city and they are often recurring. Good examples are holidays, large conferences, and large concerts (Lollapalooza, Outsidelands, etc.). The way we can tell that someone underpriced for those events is that 6 months out they will have no bookings for any days in that month except the day of the event. We see this every years in San Francisco with Dreamforce, an event that causes Airbnb prices to increase 2-3x.

  • Increasing prices for non-events

We call this the Thanksgiving effect. In some cities, especially ski or beach destinations, families will celebrate this holiday away from home at a vacation rental. However, in most cities like San Francisco, people are leaving the city to visit family in the suburbs and moreover, they are listing their place on Airbnb that week, driving up supply. Christmas and Thanksgiving are actually too of the slowest days for bookings and we typically advise people to lower rates on these days. However, Christmas in London – huge day! So either use Beyond Pricing to know what kind of city yours is or at least take a peak at hotel prices relative to a normal day and see if they are up.

  • Not increasing prices for weekends enough

In some cities, like Madrid, Portland, Amsterdam, San Diego, and others, weekends have much, much greater demand than weekdays. Occupancy can swing by 30% from weekdays to weekends. The best indicator that your weekends aren’t priced high enough (or your weekdays aren’t discounted enough) is that all your weekends are booked and very few of your weekdays. Again, you can always check out hotels as a decent proxy but knowing the differences in Airbnb and vacation rental demand for weekends is much better – which you can see on your Beyond Pricing calendar.

  • Not discounting for slow season

Most experienced hosts have at least some difference in their seasonal rates because they’ve learned from experience that they might not get any bookings in the low season if they don’t decrease their rates. If you live in Chicago or London and wonder why in January you aren’t getting any bookings, it often has nothing to do with Airbnb changing its search algorithm or some bad review you didn’t realize you received and everything to do with needing to drop your prices. Hotels will often set prices at half off peak rates for the low season.

Take a look at your rates and see if you’re making any of these common mistakes. If you are but you don’t want to have to think about what to do, check out our price recommendations and automatically sync them to your Airbnb or other listing site here: www.beyondpricing.com

Huge thanks to Ian for the guest post! Remember you can test out Beyond Pricing for yourself right here

Posted in Uncategorized

Top 5 Tax Deductions for Airbnb Hosts

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With tax season now upon us it’s time for Airbnb hosts (at least in the U.S.) to start thinking about how they’ll file their taxes and what deductions they may be eligible for.

Having personally gone through this last year, I’m familiar with the pain and uncertainty but I am by no means an expert. So that’s why I called upon Derek Davis of Shared Economy CPA to contribute this guest post.

Top 5 Tax Deductions for Airbnb Hosts

There are some great tax deductions available if you’re an Airbnb Host that can help you mitigate your tax liability.  Below provides a list of some of the top tax deductions that can save you money.

1. Rent – Rent can be one of your biggest personal expenses on a monthly basis and if you’re renting your home and hosting it for Airbnb, it can be one of the best tax deductions available to you. To figure out how much rent you can deduct for tax purposes, use the following equation:

a. [Monthly Rent Expense] x [Days rented out/Days in Month] = Amount you can deduct for Tax Purposes

2. Cleaning – The expenses can range from hiring a professional cleaning service to buying toilet bowl cleaner, windex, and vacuum. There are many day-to-day cleaning expenses that you can incur to keep you place clean for guests which are deductible!

3. Furniture – This is a great tax deduction, especially if you purchased furniture for your purposes of Airbnb. Such expenses can include: Beds, Desks, Drawers, and other household items. There may be special rules that are applied to furniture so please be sure to speak with a competent professional regarding this. Mention “Darebnb” when booking at Shared Economy CPA for special pricing.

4. Electricity/Cable TV/Water and Sewer – This is often the most overlooked tax deduction but it can save you a pretty penny when it comes around to tax season time. To figure out the amount you can deduct for these expenses, use the following formula:

a. [Amount spent on Electricity, Cable, etc] x Days rented out/Days in Month] = Amount you can deduct for Tax Purposes

5. Food – This is a great little tax deduction if you provide food for your guests and it’s an ordinary and necessary part of running your Airbnb listing. Make sure to keep track of every expense that’s related to business as opposed to personal food.

Overall, there are some great tax deductions that are available to you. It is important to provide adequate records of your expenses if they ever get called into questioning. To receive $50 off your tax return this upcoming season, please mention “Darebnb” when signing up for The Shared Economy CPA services. Happy Savings!

Posted in Guest Post, Taxes, Uncategorized Tagged with: ,

6 Reasons Why The Airbnb Magazine Will Fail Miserably

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You may have heard that Airbnb is starting a new quarterly magazine called Pineapple. Yes, it’s a magazine…and it’s called Pineapple. Why are they doing this? Airbnb has made no secret that they’re trying to establish a brand rather than being a fly-by-night operation that use you use to find a place to stay. This is a natural continuation of the logo and website overhaul. It’s meant to act as another vehicle for them to portray what their company means to its customers. I understand all of that and it’s well and good, but let me play devil’s advocate for a minute. Here are 6 reasons why I think the Airbnb Magazine will Fail Miserably:


1. Magazine readership is down
You can’t deny the fact that people aren’t reading long-form content as much as they used to. And they’re certainly not reading as much of it in paper form. Airbnb may see this as a way to reach an older audience but you have to question that logic. Perhaps some print ads in older-targeted magazines could achieve that, but establishing a magazine yourself may be overkill.


2. Pineapple is a confusing name
They say that Pineapple is a symbol of hospitality and that makes sense. Hospitality has been the biggest buzz word that Airbnb has been throwing around for the past couple of years. With Chip Conley as the Head of Hospitality he’s tried to bring these subtle aspects of the hotel industry over to the sharing economy. Be that as it may, what’s wrong with just calling it Airbnb magazine? The average person won’t make the Pineapple/hospitality connection. But Airbnb already has fantastic name recognition and the title alone would generate interest.


3. Lots of Competition
We have no shortage of travel/lifestyle magazines out there. It doesn’t appear that Airbnb is filling an existing niche. It seems like they’re coming into an overcrowded marketplace where they have no experience or expertise. That typically is a recipe for disaster. I suppose you could argue that the company has minimal expectations for Pineapple and are ok with low readership but that’s really no excuse.


4. Airbnb is a digital service
One of the things that people love so much about Airbnb is that it is a digital service. It’s magical when you book a place to stay from your phone without having to call anyone or sign any actual paper. Why lose that magic by creating something that isn’t in digital form? Even if the magazine has a tablet format it seems counterintuitive to the brand’s mission.


5. Price
Pineapple sells for $12 on the Airbnb website for 128 pages. That’s a decent number of pages, but it it really worth the cost? $12 will book you a solid dorm-room style accommodation in Bangkok. Maybe save that money and use it for your next booking!


6. Unrealistic portrayal of average listing
This is a fine line for Airbnb to straddle. Yes, you want to portray an image of beautiful listings around the world that are worthy of being in a magazine. But not every listing will meet this criteria. With a publication like this you risk creating an unrealistic standard of listing for people to achieve. There are obvious ways to make your listing look better. But it’s hard to preach the accessibility of anyone being able to list a space and then also push beautiful, luxurious spaces that can be found around the world.


Good luck Airbnb, you’ll need it with Pineapple.
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Tap To Pay, Tap To Stay – Airbnb Accepts Apple Pay

Apple Pay
Just when you thought that Airbnb payments couldn’t be any more seamless, the latest version of the app has added a new feature.  Now users will be able to pay for their Airbnb rentals using Apple’s new Apple Pay service.

 

 Of course, to take advantage of this new feature the guest will need to be sporting an iPhone 6 or 6 Plus, but more and more of these devices are being activated everyday.


 This does leave current Android users (like yours truly) out in the cold but that’s a situation we’ve come to expect.  But hey, it’s not all bad for Android users, Airbnb was quick to accept Google Wallet as a payment option a while back.  Guess this evens up the mobile payment debate through Airbnb.


 Other Sharing Economy services like Lyft, Uber, and OpenTable have already jumped on the Apple Pay bandwagon so Airbnb was wise to follow suit.  But what do you think?  Will simplified mobile payment options make you more likely to rent on Airbnb?


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Airbnb Seeks The Truth

Tell Truth

Airbnb’s review process has remained largely unchanged since its inception. It’s quite simple really. You receive an e-mail telling you to review your host (or guest) right around the end of the stay. Both parties leave their review and the reviews are visible in their respective profiles.

The goal here is honesty!

Recently Airbnb tweaked its review process in an effort to be more honest. Their concern was that some reviewers may be holding back their opinions in fear of retribution from the host or guest that they criticized. This could be a valid concern, especially when we know how important that first review can be.

Now, I’ll admit that you are more likely to leave a positive review after you’ve received a positive review. Does reading a negative (or even neutral) review influence people to be more negative in their subsequent reviews? Airbnb seems to think so.

The new system will allow reviews to be revealed to host and guest simultaneously. But Airbnb didn’t stop there. In the always quickening pace of the mobile world they’ve shortened the review window from 30 to 14 days. This comes after the company revealed that 90 percent of reviews are completed within 2 weeks.

While I understand the logic here, I’m curious about the review window. Certainly some people travel on extended trips where they may not have time or be in front of a computer for 14 days after leaving their latest Airbnb rental. But these people are in the minority and Airbnb has decided the pace needs to quicken!

What do you think? Are these positive changes to the review process or just tinkering too much on Airbnb’s part?

Photo Credit: https://www.flickr.com/photos/arimoore/195456356/

Posted in News, The Power of Reviews Tagged with: , ,

Why is Airbnb Sponsoring the NYC Marathon?

Airbnb Marathon Sponsorship

Airbnb Marathon Sponsorship

Airbnb recently announced that they will be a sponsor for the NYC Marathon taking place in November. One of the most prestigious road races in the world, the marathon brings thousands of runners and their families to the Big Apple each year.

Why is this noteworthy? Airbnb is entangled in a fierce battle with the city and state of NY on the legality of home sharing. Associating its brand with one of the city’s marquee events sends a clear message to legislators. Airbnb does’t plan to back down from the spotlight anytime soon.

According to Airbnb, last year more than 10,000 runners stayed in Airbnb rentals when traveling to New York for the race. Despite the legal issues, Airbnb plans on blowing that number out of the water this Fall. This all comes on the heels of an aggressive subway marketing campaign throughout the 5 boroughs.

“We know Airbnb hosts will open their doors and welcome runners who can’t wait to have an authentic New York experience during this incredible event,” the company wrote in an email to its New York members.

Time will tell if this is a worthwhile monetary investment for the company. No word on exactly how much Airbnb spent for the deal but previous marquee sponsors have paid upwards of $3 million for top billing.

But the real value here is in keeping “top of mind” awareness in a city where home sharing is a hot-button topic. Airbnb made similar moves with their South By Southwest initiatives in Austin, and their headlining sponsorship of San Francisco’s pride event last month.

Perhaps all press is good press but we’ll see if a few signs along the marathon course will drive any change from legislators. Let’s revisit this one in November…

Photo Credit: https://www.flickr.com/photos/vobios/60575987

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The Top 5 Services Every Airbnb Host Needs To Use

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We’ve already talked about ways to automate your Airbnb listing to simplify your life. But there is one particular part of that equation that requires further investigation. In the past year there has been an influx of new companies that have formed for the sole reason of making the lives of Airbnb hosts easier. Today let’s look at the top 5 services you should be using if you’re an Airbnb host.

1. Superhost
2. Urban Bellhop
3. HomeJoy
4. Proprly
5. GuestHop

1. Superhost
Superhost bills itself as your personal Airbnb assistant. Now this encompasses many things. First, you give Superhost access to your Airbnb account. Then sit back and let them handle the rest. Need someone to respond to a reservation inquiry that comes in at 3 am? Too busy to leave a review for the lovely guest you had last weekend? Relax, Superhost has you covered. These guys are ambitious, they’re looking to provide 360 degree coverage for your guests so you can get more bookings, better reviews, and more money, all with less hassle.

2. UrbanBellhop
UrbanBellhop seeks to cover one major problem that nearly all Airbnb hosts have seen. Who will greet my guest and let them into my place if I’m not around? UrbanBellhop will do it, that’s who! Each bellhop has been trained in the ways of hospitality and will show up at your door prepared to greet your guest with a smile and answer any questions they may have. Where is the laundry room? How do I take out the garbage? Which remote turns on the stereo? Brief your bellhop on the ins and outs of your place (even easier if you already have a foolproof house manual) and rest assured that they’ll make your guest feel right at home. Need your place tidied up before a guest arrives or do you want that bottle of wine to be waiting for your guest’s romantic weekend, UrbanBellhops can do that too!

3. HomeJoy
HomeJoy has grown quickly to become THE cleaning solution for Airbnb hosts. So much so that Airbnb has begun beta testing it as a built in option for some of its hosts. Homejoy focusses on getting your place spotlessly clean before your guests leave those all important reviews. With easy online booking, a 100% satisfaction guarantee, and cleaners who bring all their own professional equipment, you can see why Homejoy has risen to the top of this crowded field. The added convenience of being built into the Airbnb interface will only add to the impressive user-base Homejoy has built up.

4. Proprly
Not to be outdone, Proprly offers cleaning and key exchange services throughout New York City. Proprly takes pride in its commitment to quality and adheres to the strictest guidelines for its cleaners and their work. By focusing on the NYC market, they’ve been able to hone the business model in one of the hotbeds of the sharing economy. Proprly doesn’t limit itself to Airbnb hosts and explicitly calls out VRBO and HomeAway guests as well.

5. GuestHop
Rounding out the top 5 is GuestHop a service that also specializes in check-in and key management services. What sets GuestHop apart is its simple, clean interface and ambitious travel services for guests. This has been a hot-button topic as Airbnb has made its intentions clear to offer more tailored guest experiences beyond just accommodations. GuestHop offers babysitting, local tickets to shows and ball games, even coupons to local restaurants.

There you have it, 5 services that every Airbnb host should familiarize themselves with. Have you used any of these? Any other big ones out there?

Photo Credit: http://www.flickr.com/photos/sludgeulper/3887246453/

Posted in Automation & Efficiency, Services Tagged with: , ,

Airbnb OpenAir 2014

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For those of you Airbnb hosts who want to learn more directly from the source, Airbnb has you covered!

Today they’ve announced OpenAir 2014 taking place Thursday, April 24, 2014 at their San Francisco Headquarters.  This event aims to bridge the gap between offline and online commerce and community building.  With a slew of scheduled speakers ranging from Ben Horowitz of VC firm AndreesenHorowitz to Y Combinator founder Paul Graham, it will be a veritable who’s who of the Silicon Valley elite.

Now why should this interest the average Airbnb host or guest?  This signals a new era for Airbnb.  They are now looking to become an authority in these industries that they have shaped over the past few years.  Many tech companies try to start successful conferences in order to establish their credibility within the space.  What makes Airbnb’s event so unique is that it brings together luminaries from the world of investing, commerce, data science, and mobile payments.  This goes beyond the scope of just connection users with places to stay.  OpenAir 2014 will give a glimpse into Airbnb’s powerful future.  They’re no longer content to just be a quirky success story where people rent tree houses and make some money off an extra bedroom.  In case there was any doubt, this event cements Airbnb’s place as an affirmative leader in a revolutionary new economy and digital landscape.

So are you interested in OpenAir 2014?  Eager to hear what insights Airbnb have gathered over the years?OpenAir

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The Definitive Guide To Automating Airbnb

Automate

One of the things that makes Airbnb so special is the human connection that each guest has with their host.  There is nothing like the feeling of connecting with a potential guest and enhancing the quality of their stay.  But sometimes hosts are just too busy to give guests that much individual attention.  And other times guests just don’t want to be bothered with a lot of face time with their hosts.

For these reasons, we provide you with Darebnb’s definitive guide to automating Airbnb check-ins and check outs.  Here are the Dos and the Don’ts.

DO

Create a Foolproof House Manual 

This will take some initial setup time but it is well worth it.  Dedicate a solid couple of hours to think about everything in your place that a visitor may need to know about.  It may seem redundant at times but just get it all out there in writing.  The more questions that you can answer with this document, the less questions you’ll need to worry about in-person or on the phone when your guest is visiting.

Simplify The Key Exchange

When travelers are coming to your place they are exhausted and don’t want to be bothered with complicated key retrieval processes.  What can you do to make this easy on them?  The old trick of leaving the key under the doormat may not be safe but are there other hiding spots?  Is there a code to get into your building that you’re willing to share?  Can you remotely buzz people in via an intercom system?  Other options that many people love are the Lockitron  or DoorBot.  Any of these options could work for you but of course safety should be the first priority.

Get Some Help

To save yourself some hassle you could always have a neighbor, family member or close friend help let your guest in if you’re not around.  If this doesn’t work or you don’t want to ask that of your friends there are a host of services to simplify things.  Companies like Urban Bellhop, Proprly, and SuperHost are willing to help greet your guests, clean up after them, and automate some of the process that you’d typically be stuck with.  Costs for these services vary, but you may find that the expense is well worth it to make your reservation go smoothly.

DON’T

Don’t Cut Corners

While I am all for having a process and automating things, by no means should you cut corners in a way that compromises your guest’s stay.  Doing a less than thorough cleanup or leaving your keys in a questionable spot will only hurt you in the long run.  Some things are worth the time it takes to do them, while others could be simplified.  It’s your responsibility to know the difference.

Don’t Forget About Hospitality

We’ve touched on exactly what it means to be hospitable and automating things should not compromise these ideals.  You should still be leaving personalized messages for your guests along with gift baskets or bottles of wine.  Whatever you would do in person should still be done in an automated system.  Remember what Airbnb’s Head of Hospitality Chip Conley said about hitting all 5 senses within the first 5 minutes?  With a little prior planning, you can still achieve this when you’re not around to greet your guests.

Don’t Lose Your Personality

Hosting guests on Airbnb is not like running a hotel, don’t treat it like that.  Yes you can simplify things and automate in a way that makes your life easier and potentially more profitable, but don’t be robotic.  Make sure you’re still sending personalized messages and trying to get to know your guests.  This should be the case even if you never actually see them in person.  Guests are much more likely to leave a positive review if they know you’ve taken the time to treat them like an individual rather than just a payout.

Any other tips about automating the Airbnb process?  What steps have become the most important to insure a good stay for your guests?  Let us know in the comments below!

PhotoCredit: http://www.flickr.com/photos/86530412@N02/8259626811/

Posted in Advanced Listing Techniques Tagged with: ,