Are you curious on how to start your Airbnb business? We will go through step by step on what you need to do! The profitability of turning your home into a vacation rental has lead to a significant boom in the Airbnb Business. By default, many people have begun looking into obtaining property for the use of Airbnb.
However, not everyone has experience in this form of real estate, and it may often be difficult to figure out what sources to trust when you are trying to figure out what property to purchase.
To ease your process, Zumbly has built its website to simplify and streamline the process for anyone to make an informed decision before they buy a home to fit their lifestyle. Using Zumbly, you can make an informed decision in just 5 easy steps.
1. Sign Up For Zumbly
Signing up for Zumbly is quite easy. Simply, click sign up on the top right corner, and move to the next page. Here you have the option to sign up through your Facebook account or alternatively, fill out the information in the questionnaire.
Once you have signed up for your account, you will have the ability to mark your favorite properties so that you can come back to them with ease at a later time. You can also save your searches for a later time to further your convenience when researching properties.
2. Find Airbnb investment property with Zumbly’s home score.
Through the Zumbly website, you can use the search engine to look through potential investment properties. When you are trying to figure out what kind of property you want to invest it, understanding the math and finance behind a decision may often be difficult for people.
If you have not gone to school or have had experience in the matter before, it may be particularly confusing to understand what is ideal for you to invest in. Zumbly has simplified the process for people by categorizing properties based on their level of investability.
Zumbly uses a scale from 0 to 10 to show users how good of an investment a given property is; however, Zumbly’s home score scale is not linear. The rating system works as such:
0 – 5: Fair investment value
5.1 – 7: Okay investment value
7.1 – 9.9: Good investment value
10: Excellent investment value
Even if you are well versed in the real estate market, Zumbly can still be incredibly helpful for you because Zumbly shows you the home score of short-term and long-term rentals. Regardless of whether you do or not understand the property investment, Zumbly can greatly assist you as it will help you filter out properties that may not fit your lifestyle.
One of the advantages of Zumbly is that you do not have to look through properties, slowly trying to figure out which properties are worth your time. Overall, the use of Zumbly can help you not miss out on the opportunity of purchasing the right home for your lifestyle.
3. Find the funds to finance the property
This will likely be the most difficult part among all the steps unless you have a very large amount of savings and a very good credit score. Chances are you are going to have to pull together a few investors to help with the investment.
Whatever your method of getting the money is, unless you are going to buy the property at its full value, you are probably going to get a loan through the bank.
This typically requires a 10%, up to 20% down payment on the building to receive the loan. Which means that in reality, the only out of pocket funds that are actually immediately required for the purchase is the money for the down payment that will allow you to receive the loan from the bank.
The good news is that no matter what type of financing option you choose, Zumbly has a calculator that will let you know what your monthly payment will be as well as potential revenue.
Related: How Does Rent to Own Work in 2019?
4. Complete purchase of the property
Generally speaking, when you are purchasing a property, you would have a real estate broker to do a lot of the work for you. Simply submit the property you wish to purchase to your real estate agent, and they will contact the agent of the selling party. From there they will help you secure your deal.
After the deal is closed, the house will go into escrow giving you 30 days to work out everything else that is needed or back out of the deal if you so choose. After escrow is over, the home is now yours and you can do with it as you see fit.
5. Start your Airbnb business by listing on Airbnb
If the entire purpose of your purchase was to invest in a short-term rental property, your final step is to simply list your property on Airbnb.
Through Airbnb, you can list your property with ease. Just go to their site, and find the button that prompts you to list your property. From there, fill out all the information that the site asks for.
A lot of this information is needed as the information that potential customers will see when deciding which property to rent from. This includes things like, location, base price, the size of the property, and the specific requirements that you want your renters to have to be allowed to rent your property.
You can also go as far as to require an interview of sorts so that you can personally choose who gets to stay at your property. This will help you reduce risks for damages and other things that may end up costing you extra money.
However, you should note, that the more requirements you place on people to be able to rent from you, the lower the number of potential customers.
What you need to know before you start your Airbnb business.
1. When does Airbnb charge?
When a customer makes a reservation request, the payment information is taken by Airbnb. Once the host accepts the request, if the reservation is booked through the “Instant Book function,” Airbnb will charge the customer the money required for the rental.
Regardless of how far in advance the purchase is made, Airbnb will hold the payment until 24 hours after the guests’ check-in. This allows the buyer and seller to make sure everything on both sides is as expected (such as the number of guests visiting, the number of bedrooms stated, or overall cleanliness of the property).
If you have a particularly expensive property, you may want to require a security deposit for your guests before they are allowed to stay. If this is the case, the security deposit must be charged to the guests through a successful claim within 14 days of their checkout.
If the guests book a reservation for a time period greater than or equal to 28 nights, the first month down payment will be charged as the reservation is confirmed. After that, the nights will be charged on a monthly basis.
2. How much does Airbnb charge?
Generally speaking, hosts are charged a 3% service fee for any rental that goes through Airbnb. However, depending on the location of your property, the service fee may be a bit higher. Also, if the host has a “Super Strict” cancellation policy, the service fee may also be raised.
This service fee is automatically deducted from your payment when Airbnb gives you your payout for a rental. If you are hosting experiences as well, the payout for the experiences will be done separately.
The service fee for experiences are generally 20% of the price of the experience and is automatically deducted from the payout to the host; however, if the experience is one for a non-profit organization, the service fee may be waived, allowing you to keep all your proceeds.
3. What is a Superhost on Airbnb?
One of the best ways for you to show customers that you are a reliable host is through gaining the title of Superhost. Superhosts are experienced hosts who are exemplary in their work and are the ideal type of hosts that other hosts should strive to be like.
Once you have achieved the Superhost status, your properties that are listed through Airbnb will receive a badge indicating the reliability of your properties. After receiving this status, Airbnb will check up on you roughly four times a year (on a quarterly system) to make sure that you are in fact keeping up with the diligence that earned you your status.
To maintain an account with good standing and meet a list of requirements. These factors of your performance are measured over the past 365 days from any given point in time. The requirements that are required for you to get the Superhost status are as follows:
- You must have at least 10 trips booked and executed through your property; alternatively, successfully complete 3 long term reservations that total to a minimum of 100 nights.
- Have and maintain a review rate of at least 50%. The review rate is the percentage of guests that leave a review on your property after they have checked out of their stay.
- You must maintain a response rate of 90% or higher. The response rate refers to the consistency and speed in which you respond to a potential guest’s inquiry of any given rental.
- You must have zero cancellations. This is pretty straightforward, as canceling on guests can be rather inconvenient for them and is largely frowned upon; however, there are exceptions that may allow some grace if you have canceled on a guest. These exceptions are highlighted under the “Extenuating Circumstances Policy.”
- Lastly, you must maintain an overall rating of 4.8 or above. After each visit, guests can rate their stay at your property on a 5-star system. Based on this system, you must simply have an average rate of 4.8 stars overall.
Once you have fulfilled the requirements for the time period that is required, there is no necessity to apply to become a Superhost. If the requirements are met on the quarterly assessment date, you will be qualified for the Superhost status. Airbnb will then notify you of your Superhost status at the end of each assessment period (typically 10 days after the assessment is dated to begin).
4. How much can you make with Airbnb?
There is nearly no limit to how much you can make on Airbnb. The amount you make, however, is going to be a function of how many properties you have listed, their price, and the percentage of days that your property is being rented out.
The New York Times, explains that there are landowners who would typically rent out their property for about $2000 a month; however, switching to Airbnb allowed them to charge $150 a night.
This means that if they can rent out the same place for $4500 a month as long as they rent out the property through Airbnb. So, you only need to rent out your property through Airbnb for about 44% of the time in which you would normally rent out to a regular apartment tenant to make the same amount of money.
Not only do you have to rent out your property for less time, but it is also much easier to find a customer through Airbnb as potential tenants have very easy access to seeing your property. Overall, this makes the potential for making money much greater when renting through Airbnb rather from traditional methods of renting.
To sum this all up, if you are interested in increasing the potential amount of money you may make in property investments, this guide may come in very handy. Sign up for Zumbly and use it to find the ideal property for you to invest in.
Instead of posting the property up for rent as either a house or apartment, use Airbnb. From Airbnb you can list any of your buildings having whatever restrictions you would like on guests, and the price in which you want them to pay per night they decide to stay.
The amount of money that you would make per night will generally aggregate to a larger sum of money being obtained than if you were to simply rent out the building through a standard rental method.
Chances are you will not have a 100% occupancy rate, but this issue will be a hedge by the fact that you can basically charge more than double the nightly value as you would if you had rented the property out by the month.
Furthermore, Airbnb makes it incredibly easy for you to connect with your customers, and if you do so in an ideal manner, you can achieve the Superhost status, allowing you to attract customers at an even higher