If you’re a traveler, chances are you’ve visited Airbnb. And, if not, this is a great site to find a house or apartment to stay in longer term than a hotel in Thailand or elsewhere. The experience is often favored because you can feel more comfortable during your chosen stay.
Today, Airbnb is active in more than 65,000 cities around the world, with nearly 4 million listings. Here we can help you decide if becoming a host is right for you and answer frequently asked questions.
How much money can you make as an Airbnb host?
If you plan to be an Airbnb host, your intention is more than likely to start it as a side job, not to start a full-fledged business. On average, hosts earn $924 per month, but the numbers can vary widely. Some hosts even decide to buy or rent more than one apartment or house and rent them out full-time, earning 6-figure incomes.
One way to see how much you could potentially earn as a host is to plug in your location, how many guests you can host, and how much of your home you can rent out on Airbnb’s website. This will then calculate an average number to start with.
But your true earning potential depends on many factors, including how much you charge for your space and how often you rent it out. How much time and money you spend maintaining your home as a rental space and how much you spend furnishing it are also factors that affect your overall income.
Deciding on your goals for becoming a host is the first thing to do before embarking on this experience. Some things to think about include how much you’re willing to spend on your home to make it rent-worthy, as well as your responsibilities, roles, and expenses.
Determine your Airbnb space
Whichever market you want to enter on Airbnb, it’s best to decide before you start. Whether it’s a single bedroom that shares your bathroom, a private bedroom with its own entrance, or your entire living space, the type of space matters. Time periods also matter. For example, if you only want to rent out your space on weekends, holidays, or summer months, this should also be considered.
Determine expected costs for amenities offered
Certain amenities are essential to the Airbnb experience. These things include keyless locks for easy check-in, microwave, refrigerator, Keurig, and furniture. Regardless of the amount of space you intend to rent, storage with the bare minimum of equipment is something to factor into your overall costs.
The Airbnb platform lists towels, clean sheets, and toilet paper as essentials. But, to achieve a higher rating, additional equipment is definitely worth investing in. Also, you need to consider rising utility bills, as renting your space will incur higher utility costs.
Obtain permission from appropriate governing bodies
Getting proper permission (in writing if possible) is relevant to avoiding future issues with your landlord or landlord. It’s a good idea to read your tenancy agreement and look for any provisions that detail subletting.
Depending on where you live, there may be legal restrictions on renting your home short term. And, unfortunately, sorting out the fine print can be a headache. But, to avoid unexpected fines or slams, it’s best to sort everything out before you start.
REMARK: According to Airbnb and Thailand Hotel Act, BE 2547:
“Thailand has laws and regulations that may affect short-term rentals. Please check compliance with relevant laws and regulations including the Hotel Law, BE 2547 (2004), Building Control Law, BE 2522 (1979), Public Health Law, BE 2535 (1992) and other relevant provincial regulations.
For example, please note the Ministerial Regulations 2008 under the Hospitality Act, BE 2547 (2004), which states that short-term rentals of property do not require a hotel license if:
The property has four bedrooms or less;
The property can accommodate a maximum of twenty guests or less; and
The rental of such a property is only an additional source of income for the owner
However, Hosts operating property rentals under this exemption must still report their rental business to the relevant local authorities. Failure to report is subject to significant fines and penalties.
Study your market and set your price
Figuring out where you fit in the Airbnb market as a host is another big hurdle. Using AirDNA is ideal for doing market research. Site metrics can show how your nightly prices compare to other homes in the area, or when you might want to consider lowering or raising prices. Weekdays and expected peaks in demand are also considered when using the platform.
Setting the minimum number of nights people can stay in your home also helps you determine how much cost you’ll need to offset. Handing over the space includes necessary cleaning and maintenance, which could determine how many days you need a tenant to stay, in order to save on these services. Additional guests or additional amenities and services are another factor to consider when determining prices.
Your profit margin goals should also be part of your internal discussion, because being a host should be worth it for your wallet.
How much you get paid for your Airbnb rental
Airbnb charges guests before they arrive, and they release your money to your payment method of choice. Popular methods include PayPal or direct deposit, which will see funds added 24 hours after your guest check-in.
Accommodation fees can range from 3% to 5%, so your guests will see a sign-up price that’s actually higher than what you’ll earn. Weekly or monthly discounts, weekend or seasonal rates, co-host payments, and VAT should also factor into the amount you expect to earn.
Hire help to manage your Airbnb rental
Being a host can certainly be difficult to manage on your own. Having at least 1 other person to help you co-manage the property is a great idea. This person can ease the burden of responding to day-to-day emails and communications or just help physically manage the property.
Urgent issues, check-in processes, and other important routine services can all be simplified with the help of a co-host. Airbnb allows you to request assistance from up to 3 co-hosts. But make sure co-hosts are familiar with Airbnb’s co-host terms of service.
The time investment of hosting on Airbnb
If you have it all figured out, the last thing to think about is whether hosting is really worth the time and effort. If you invest your time, you’ll get more bookings and more reviews. And, reviews are important because the more reviews you get, the higher you’ll show up in searches for potential customers.
Airbnb tax
Airbnb taxes are complicated because there is no uniform tax policy that applies. Usually, hosts will have different tax policies depending on the city in which their property is located. Knowing your local tax laws is important to understanding what taxes you’ll need to collect or pay to be a host.
If your city requires you to collect local taxes from your guests, you will need to let them know the exact amount BEFORE they book. To do this, you can either include the amount in the list or not. But, if you choose not to include it in the actual listing, you will need to collect the amount from your guests when they arrive. Keep in mind that Airbnb cannot help collect taxes or ensure they are paid.
The percentage of tax Airbnb takes from hosts
Airbnb typically charges 3% host tax, but the percentage will be higher if you’re an Airbnb Plus host. Locations in Italy as well as a strict cancellation policy will also result in the collection of a higher fee. Locations in mainland China will also see a 10% tax rate from hosts due to national laws.
Other costs to consider
As with almost any business, there are always additional costs that may arise. Furnishings, maintenance, storage, cleaning services, co-host income, taxes, Airbnb host fees, and higher utility bills are some of the additional costs to always keep in mind. mind when planning your income. And, it’s recommended to keep your profit expectations conservative, especially if you’re not ready to spend a huge amount of time and energy on hosting.
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