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Short lease Airbnb
What is Airbnb?
Airbnb is a vacation rental company with an online marketplace for tourism, vacation rentals or home stay.
It is an American company based in California and founded in 2008 by Brian Chesky, Nathan Blecharczyk, and Joe Gebbia.
The company does not own any property, however it profits from commission on bookings.
With over 250,000 properties listed on the platform Airbnb is a major player in the short rental market.
If you are interested in short rental business, here is a step by step guide on how to start an Airbnb business.
Form a business
Step 1. Form a business.
The first step is to form a business and register a limited liability company.
A quick and cost effective way to register an LLC is online. Go to the corporate affairs commission portal to form the company.
A major advantage of forming a business is access to loans, better credit worthiness and separation of assets and liabilities from personal funds.
Hoose a location
Step 2 Choose your location.
The next step is to choose where to start the business. You need to leverage on local knowledge, festivals and local attractions in your area.
Then conduct market research and understand customer type, size of the property and number of people you want to accommodate.
To succeed you need to find Neighborhoods were the demand is more than supply.
An area with tourist attractions or local events has good value. Next Look for listings that have lots of reviews then carry out competitor research.
Things to look when listings your property is the description, price, minimum night stay, number of guests and so on.
To form a clear picture make a profile of ten listings in your area and why people like the listings.
Research market leaders
Step 3 Copy the market leaders.
To succeed in the short lease rental industry you need to copy market leaders. These group of entrepreneur's are top rentals for a reason.
luckily most markets are under utilized, there is always room for one more.
Things to look out for are regional or vacational locations, and listings with high ratings.
Note that smaller properties make less money, however return on investment are largely the same. You can invest in studio apartments or apartment buildings.
Step 4 Studio Apartment
If you want to go for studio apartment or house rental you need a business plan. Start small then increase the number of listings for more patronage.
It is better to hire your own house keepers and pay-by-the-hour or weekly.
If you own a house you can use a professional house cleaning service. Don't forget to furnish the apartment in a tasteful appealing way.
Hire casual staff
Step 5 Keep staff low.
Try to hire temporary staff or use agencies for cleaning, then furnish the apartment.
A good investment should fetch 2 or 3 times your investment. An average investment is from $800 to $5000 depending on your property type.
The aim is a return on your investment in 4 months. If you invest $2000 expect about $ 2000 in profit in 4 months that is $500 profit every month.
How to start an AIRBNB Business
Step 6 Rent or buy property
Buying a property for the purpose of renting on Airbnb is not a good option. The best option is to rent a property and put them up on Airbnb.
However if the agreement terms of rent doesn't allow such Don't do it because that's against the legal agreement.
Instead you can have a front-end lease agreement with the landlord. This type of lease agreement is when you lease the property with the purpose of listing it on Airbnb.
Sometimes the landlord will give you a discount on the property or allow first two months free.
Add tasteful furniture
Step 7 Add furniture.
You need to stage the property for short term lease. Don't take to much time setting it up and don't spent too much money.
There are many people into interior decoration,. If you want a clean professional look use them.
Once you are done you can run the business yourself or hire a management company.
More on short rent business
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- 10 Airbnb Alternatives: Accommodations Made Easy
If you're looking for accommodation options, you should try these Airbnb alternatives that are almost equally good.
This content is accurate and true to the best of the author’s knowledge and is not meant to substitute for formal and individualized advice from a qualified professional.
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