Lauren Cobello » Make Extra Money » side hustles » Is Airbnb a good way to make money? 7 Tips to know…
One really popular way to plan a trip right now is to book a place to stay using a website where you can rent from real people, like Airbnb or VRBO. Not only is this a frugal way to plan out a trip, but it can also be a way you can earn some extra money. Can you believe that you can rent out your own home so easily?!
The website is really easy to navigate and begin to set up your home or property you want to rent out. Just click on become a host and then the website walks you through each step.
You start by listing whatever space you want to rent out. The website makes it easy for you to list out all of the specifics you need to share. It also has a helpful icon on the right to show you what it predicts you could earn, although, obviously, many factors could affect the true amount you earn.
You can see in the left hand column that the website has easy to navigate categories for every step.
Since the website is so clear and helpful, rather than showing you each step here, I thought it would more worthwhile to talk about some important other factors you should consider while deciding if and how to use Airbnb to rent out your home or property. While you can earn some great side hustle money by using Airbnb, it’s not free of up front or hidden costs, so we need to examine those aspects!
If you rent out your home or property in this way, you are not a landlord, but a host. You are on call to your renters, just like hotel staff would be. This does require a lot from you, especially in terms of your time. As well, if you’re renting a room or part of your actual home, which you also live in, you have to be really ON about things like cleaning. For these reasons, it seems like most Airbnb hosts prefer to rent out separate properties, rather than the homes they live in, although you can certainly do what works best for your situation.
One advantage of renting this way is that you can charge more than a traditional landlord/lease scenario. Vacation and short-term renters understand that they’ll be paying more than a long-term contract.
Let’s talk through the implications of what this means in terms of your income and your taxes. The rule seems to be that if you rent out your home for 14 days or less, you do not have to report that income. Longer rental stretches require reporting.
Consult a tax professional. Income and tax rules vary by state and scenario, so you do need to look into the actual information as it pertains to your situation. Regardless, you should also keep really good records to help you compute your taxes when it’s time.
One example of things you’d want to keep records of is the up front investment you have to make to prepare your space. You might need to furnish a property, redo a spare room, or gather extra sets of sheets and towels. You will also have to regularly provide household items like toilet paper, toiletries, and keeping a stocked kitchen or pantry.
Some of the other investments you might need to make include great photographs to use in listing your property. High quality photos are the number one item which can consistently rent a property.
You should also look into the fees associated with listing your property. Airbnb currently assesses a 3% processing fee.
You should also provide some welcome info or tour guide type of materials for your guests. This might be something you need to invest in gathering, finding, or creating. If you are hosting in your own home, cable and internet will not be an added expense, but in a separate property, it might be.
It seems that most Airbnb guests are fabulous, but once in a while, you could get a guest who is not great. For this reason, you can access insurance through Airbnb, but you should carefully look into what it covers. You should also check with your own homeowners policy to see the ins and outs, and if you would need to make any adjustments to your policy. You might also need to check with your city or homeowners association to see if they allow you to do short term rentals.
If you can make it work for you, renting out your home or property with Airbnb can actually provide a great side income. Just go into it with your eyes open about some of the time and costs associated with getting started and facilitating your rental. There are tons of great resources online as well, including testimonies from people who have actually had great success with their rentals!