By Lee Sherman
If you’ve got a vacation home in a place like Lake Tahoe or Hawaii that sits empty for much of the year, it might be time to consider turning it into an Airbnb. Do this and turn a sinkhole into something that provides you with extra income each month.
Individual investors have long purchased real estate with the intent of living in a home after they retire. But while there were earlier market entries, such as VRBO in 1995, the arrival on the scene of Airbnb in 2008, which operates an online marketplace for short-term stays, has completely changed the game. Airbnb has replaced scattered classified ads torn out of newspapers with an online platform for connecting renters and buyers that automates and elevates the process.
At first, Airbnb rode the couch-surfing wave, where college students would sleep on a friend (or a friend of a friend’s) sofa in exchange for a small fee or commission. Now Airbnb, which neither owns nor franchises the listed properties it offers, is formidable competition for the hotel industry, and even the hotels themselves have responded with clones. You can even choose to build your own. Airbnb came along when the web was becoming more interactive, and we first saw a move to mobile apps.
I don’t know whether or not you can still rent a single couch, but I know that the rooms, apartments, and homes on Airbnb can vary significantly in size, accommodations, and amenities. As both renter and host have found, the differences can be confounding. Unlike with hotels, the lack of standardization can drive you mad regarding pricing, taxes, and house rules.
On the other hand, today’s Airbnb is less about stays and more about experiences. As a host, you’ll have the most success with homes that offer more unusual amenities and access (whether that means a private beach destination, a townhouse in a skyscraper, or a rustic mountain cabin). Seemingly easy and inexpensive add-ons such as providing bikes, a pizza oven, or a well-stocked no-host bar can help you get the all-important 5-star rating. It helps to look beyond the standard offerings. Do you have a houseboat or an Airstream trailer that will make a great rental property?
How do you get started with Airbnb?
Airbnb provides many resources and incentives for people looking to turn their home into an Airbnb. The site offers suggestions about everything from room decor to included amenities and activities. Hosts are automatically insured against any damage or theft, but of course it always makes sense to inform your financial advisor of your plans to adjust your Umbrella Policy, account for taxes and other unforeseen issues. The Airbnb website also maintains an extensive repository of documentation, help, and ideas, even if you’ve never seen yourself going into either the hotel or travel business.
Get started by preparing your listing. You can do this yourself (no need for professional help from an interior designer though it can’t hurt to give your place a once-over, at the minimum, you should give it a good clean), but the more details you include, the more interest you’ll get. Photos are the key to a good Airbnb listing. Make sure you have photos of every single room, including bathrooms, hallways, and even lobby space if relevant. Even if you’re not a good photographer, you should be able to take good-quality photos with the help of your smartphone.
Beyond the basic listing, you’ll want to let prospective guests know of any unique details of your property. Does it have a pool, an ocean view, or is it right in the middle of the liveliest street in town?
Turning your vacation home into an Airbnb can be a great source of relatively passive income where the marketing takes care of itself. Just make sure it is Instagram-ready.
Lee Sherman is a contributing writer to MyPerfectFinancialAdvisor, the premier matchmaker between investors and advisors. Lee is an experienced journalist and editor with over 30 years of expertise with a significant history of writing in the personal finance and technology arenas.