What is Airbnb?
Airbnb is the world’s largest peer-to-peer rental marketplace, allowing individuals to list (or rent) a home, room, or couch for rent by the day, week or month.
How it works
Almost anyone who owns their own home can rent out all or part of their space on Airbnb. (Some people who rent apartments can also rent out all or a portion of their space on this platform because the site has made deals with some landlords that allows them to work with tenants. Otherwise, most tenant agreements bar subletting rented space.)
You also have a lot of flexibility when it comes to how you want to rent your space. You can choose to list spare bedrooms and have guests stay with you. Or you can list a whole home to rent. You can keep the listing active at all times. Or you can rent only at set times, such as when you plan to be out of town.
You also choose the rental rate; the schedule; rules; and whether additional fees are required for cleaning, or, say, pet deposits.
Then you upload copious photos of the space you’re renting.
Finally, you can decide whether you want to personally screen renters, or allow the site to instantly book your place whenever your schedule says its available.
Are you considering signing up as an AirBnB host? The site is a leader in providing peer-to-peer vacation listings. That’s partly thanks to its great website, which has thousands of rentals all over the world, and to the modest amount it charges hosts.
But it’s also because Airbnb is great about responding to criticism and trying to get the best results for both vacationers and the people who rent to them.
Once your home is listed, renters can contact you by sending messages through the site. Airbnb suggests that you respond promptly, make sure your house is immaculately clean when guests arrive, and provide renters with other guidance so there are no mysteries about, say, where to find the coffee in the morning.
The best hosts often leave binders that explain both the amenities of the home and the area. If house has Wifi, for instance, they’d provide the Wifi password here. Offering coffee or tea set-ups for overnight guests is also advisable. But, it’s also a nice touch when the host provides details about the area you’re staying in — good local restaurants; hiking trails; beaches; amusement parks, etc.
Fees and commissions
There are no fees or charges to list your home. But if a guest books your rental, you’ll pay a 3% fee that’s deducted from your payout. Guests are also charged a fee, which ranges from 0 to 20%, depending on both your cancellation policy (the stricter you are, the more they charge) and the cost of the rental. (The higher the cost, the lower the percentage fee.)
The site also offers a $1 million liability and property damage policy that covers your house in case a guest gets hurt or damages your property. But you need to maintain homeowner’s insurance, as well.
Host are paid within days of a completed rental. However, the exact amount of time it takes to get your payment will depend on the payment option you choose. PayPal, Payoneer and Western Union payments are usually made within a day. Direct bank deposits can take 3 to 5 business days. International wire transfers can take a week to 10 days.
A survey by student lender, Earnest, estimated that the average AirBnB host earned $924 per month. And roughly one-quarter of AirBnb hosts earned more than $1,000 a month. Significantly, that was more than any of the eight other side hustle opportunities they studied. Better yet, outside of keeping your house clean and finding a way to get your guests a key, it doesn’t require much hourly labor.
That said, sharing your house with strangers can have a downside — from sketchy visitors to people damaging your stuff. And even though this site takes great pains to address different problem areas as they arise, new problems keep cropping up — like people having parties in their rented houses or using a rental to commit suicide. These are rare occurrences, but that’s little solace for those who have experienced them personally.
Additionally, those who rent out guest rooms can have problems setting boundaries — like enforcing off-limit spaces or having guests invite guest in to party or stay.
It’s important to consider the potential risks of any type of rental and then do what you can to mitigate those risks, from screening guests to setting house rules. It’s also smart to lock up things that you don’t want shared.
Additionally, as Airbnb has become increasing popular, many cities and counties have added rules that restrict when, where and how homeowners can rent out their space. Airbnb has an extensive section on rules and regulations for regions, counties and local municipalities. It’s important to know the rules in your community, so you don’t end up getting penalized.
Renting houses and rooms through Airbnb can be a highly lucrative and relatively low-maintenance side hustle, if you set it up right.
However, if you’re thinking about renting a home or room for longer-term there may be better sites to use. If you’re renting your home out for months at a time, for instance, check out SabbaticalHomes. Designed for educators who go on months-long sabbaticals, the site is likely to prove more affordable for both owners and renters.
If you’re looking for a long-term housemate, we recommend SilverNest. It’s specifically geared toward empty-nesters, who want help paying the mortgage, and doing chores around the house. The big benefit with this site is that it heavily screens renters and tries to match them by compatibility.
Airbnb is the industry leader in peer-to-peer home and room rentals to vacationers
Expected pay: You set it
Commissions & fees: 3% paid by homeowners; 10% – 20% paid by renters
Where: Nationwide / worldwide
Requirements: Legal right to rent out real estate