Photo by Bartholomew Cooke/Trunk Archive. Design by Erik Mace for Yahoo Travel.
Chances are, if you’ve taken a vacation in the past couple of years, you’ve probably heard of a little home-stay company called Airbnb. One of the great things about the business is that it pays off not only for tourists looking for an authentic, affordable stay, but also for the homeowners who rent out their spaces to travelers. Some people have become so successful at renting out their property that they can make hundreds of thousands of dollars a year (like this guy did). Though that’s extreme, a new study done by the company estimates the average Airbnb renter can make more than $7,500 a year of income — that’s a little more than half the average American’s mortgage ($12,732 in payments per year).
Related: How This Guy Made $200k on Airbnb
The report, “Airbnb: A New Resource for Middle Class Families,” surveyed Airbnb hosts from cities across the country and found that a typical host rents out his or her property for 66 days of the year, bringing in, on average, an extra $7,530 annually. To put that into context, for the average American family with a household income of $50,000, that equates to a 14 percent pay raise. That $7,530 could pay for about half the average mortgage, or a year’s worth of groceries, or 10 months of transportation costs (including gas, insurance, and car payments).
The vast majority of these households are renting out their primary home, and of those surveyed, 58 percent admitted that Airbnb was helping them afford to stay in that home.
With Airbnb, you can take one of your biggest expenses and turn it into profit. (Photo: Sonja Lekovic/Stocksy)
“Home sharing and Airbnb allow local residents to use what is typically one of their greatest expenses — their home — to make additional income that helps them pay the bills,” states the report.
Of course, there are risks to renting out your home or a spare room that need to be considered. Airbnb veteran Danny Papineau, who returned from the verge of bankruptcy and now earns his main income from the home-sharing site, learned some lessons the hard way, admitting that “bad guests” were part of the learning process. “We had so many problems making it work,” he told Yahoo Travel. “A group of locals rented our house just to throw a party there. It got out of hand and the police were called. Our neighbors were mad. And there was over $4,000 worth of damage.” Papineau said he is now much more selective about who he allows to stay in his home.
For its part, Airbnb also says it has made changes to help protect hosts. Homeowners are now allowed to post reviews of guests to help vet potential visitors and for the visitors to build a reputation amongst the community. The company also launched “The Airbnb Host Guarantee” in August 2011 — a property protection program that covers hosts’ property loss or damage up to $50,000. And despite media attention on the few horrible occurrences of trouble in Airbnb hosted properties, the actual risk of a encountering such a disturbing issue is small.
So how can you maximize home-sharing as a resource? Here are some tips:
Get scrubbing and make sure your home is clean and welcoming for your guests. (Photo: Bonninstudio/Stocksy)
Make your home rental ready. A few musts: Make sure your place is tidy, comfortable, and clean. Beyond that, check out what listings with good reviews offer and consider what you would want from accommodation if you were renting. For example, add personal touches like a welcome bottle of wine or box of candy – little things go a long way.
Make your listing stand out. After getting your home into tip top shape, take lots and lots of pictures. The more the better. Then write a detailed, accurate description of what the place has to offer; be sure to highlight anything that makes your place unique.
Do your research. Find out what the local market rate is for a similar properties in your area and don’t deviate too far from that — you want to be competitive. And keep in mind, rates can vary widely from city to city and from season to season. Weekends are also likely to be more expensive than weekdays.
Music festivals or other big events mean lots of people looking for places to stay. (Photo: Robert Kohlhuber/Stocksy)
Rent during local surges. Find out when local demand for accommodation is likely to surge so you can charge higher rates — when there is a music festival, conference, or big sporting event nearby, for example. For beach cities, summer holiday weekends are prime time.
Communicate well. Respond to potential guest enquiries quickly and accurately. Provide prompt reviews following a stay and ask guests for constructive feedback that can help you improve your offering.
Make sure you’re not breakin’ the law. (Photo: iStock)
Check local laws. Each state and city has its own rules regarding the rental of residential property and what is allowed. For example, under California law, a person who rents a place for at least a month is automatically considered a tenant on a month-to-month lease and is entitled to renters rights. And in San Diego ( as well as other places), a permit is required to operate a bed and breakfast out of your home. Failure to get such a permit can result in a huge fines in the tens of thousands of dollars. Some cities have even made renting out space via services like Airbnb completely illegal. Know where you stand.
After all, a solution to help with the bills is actually how Airbnb came to be. The company was founded in San Fransisco in 2007 by two friends and room-mates, Joe Gebbia and Brian Chesky. While struggling to pay their rent, the pair noticed a hotel room shortage during a local conference and decided to rent out three air beds in their living room and cook their guests breakfast. They created a website — airbedandbreakfast.com — offering the beds for $80 a night, and in less than a week, all three had been snapped up. The pair realized instantly that this was more than just a one off enterprise and set about launching Airbnb. Earlier this year the company was valued at $20 billion and it now operates in 190 countries across the globe, with over 1.5 million property listings. So it definitely helped with their income!