Airbnb is a type of service in which people share their space and property with travellers from all over the world. Airbnb is an excellent form of travel startup that has established its place in the list of the most famous form of startup. Airbnb connects hosts with travellers looking for a place to stay as allowed by their budget. You can stay at someone's home or rent a private home for yourself. Airbnb offers unique options like lofts, boathouses, camper vans, and even igloos.
The choices are limitless. When you travel with Airbnb, the living experience is totally worth it. Moreover, you get to build a deep connection with your hosts. Currently, 36% of Airbnb users are aged from 25-34.
The Airbnb business is an effective form of a startup that can make you money easily and legally. In this article, we will talk about the steps that are needed to follow to start an Airbnb business. So, without any further ado, let's get started.
Identify which portion of your house or what property you will put for accommodation. Decide on the age group, marital status and other important characteristics of the travellers you wish to host. If you know a bit of finance (it's not that difficult), make a blueprint of the initial costs, how long it will take to generate profits, and the time to break even. Consider other factors like the additional perks of staying at your place. Have a business plan document ready to have a structure and strategy in place. Including future prospects, estimations, and risk mitigation measures in your business plan is a must.
Creating a Legal Entity (CLL)
Though it is not necessary, incorporating a legal entity is highly recommended to save yourself from legal troubles that may arise from hosting people at your place. It is also a wise decision to set up a legal entity so that you can get access to a business bank account and have a comprehensive business profile. After all, this is what you want to achieve! You can hire professional services to help you establish a legal entity for yourself.
Registering for Taxes (EIN)
You have to file for an Employer Identification Number (EIN). The revenue department in your country requires every business entity to have this identification number. Once you have incorporated your legal business entity, register it with the Internal Revenue Service and generate an EIN. Registering for taxes is no rocket science. Several resources are available online to educate you on the process. After completing those processes, you can easily pay the taxes.
Opening a Business Bank Account
You can now go to a bank, hand over the required information, and open up a business bank account. Having a business bank account has several benefits. It allows you to maintain a detailed account of your expenses. Moreover, it separates your personal finances from those related to the business. You'll have to pay service charges to the bank for the account. However, that's a small price to pay for something as sophisticated as a business bank account.
If you don't get Short Term Rental (STR) permits, this business model will get you into trouble. Without securing such permits, it's impossible to legally list your place for rental. If you proceed without securing the necessary licenses, you will be heavily penalized and may even face legal problems. Ask the concerned authorities what is required for obtaining the STR permit. They will be more than happy to share the information.
This is important because you are going to end up having employees. Maybe you want to hire cleaners in the future. Do the research and understand all types of insurance you need. For example, if you are doing rental arbitrage, you need to get renter's insurance. A host's verbal guarantee doesn't count in insurance. You can't expect a smooth sail journey at all times, insurance means you can steer your way, come hell or high water.
Start With the Business
After all the above steps, it is now to start with your dream Airbnb business. Your location is set so start hosting people on your property and provide them with all the facilities that they need, make them feel at home and your business is good to go. These are just the initial stages of beginning an Airbnb business.
With the Coronavirus situation in place, the hotel industry has taken a severe hit. Airbnb is no exception with the travel restrictions in place across countries. With lockdowns coming to an end, the Airbnb businesses need to adjust to the new normal. Therefore, if you are interested to indulge yourself in this industry, go for it.
What are Airbnb homes?
Airbnb homes are residential properties that are given for rent to travellers for a short time.
Is Airbnb cheaper than hotels?
Staying at Airbnb is cheaper than staying in hotels.
Are Airbnb safe?
Airbnb are quite safe for travellers to live and enjoy their stay there.