If you want to start hosting on Airbnb then read on. It is a great way to start making extra money, you can even make enough to replace the income from your job, I know because I did, and it can be very lucrative for you as an investor. And it doesn’t matter if you want to buy a property, cohost or manage, or do rental arbitrage. The tips I’m going to give you will help you get started as a host, and as a profitable host, regardless of your strategy to get the property.
So I own and have over 80 active short-term rental listings in 3 different markets, and my company generated $2.7M in revenue last year. And I started with a single Airbnb listing which was a mother-in-law suite in the first house I bought as a way to live for free by househacking. Today my STR portfolio is worth about $10,000,00 and I want to tell you how you can get your start too. Whether it’s to replace your W2 income or build a big Airbnb business like mine, maybe even better.
I’m going to break down 5 key areas to start your Airbnb business and be as efficient and profitable as possible. I’ll tell you from experience, if you go in blind it can and will be a lot of work. You always hear short-term rentals are a lot more work and effort than long term rentals, and that’s true to a point. But I’m going to show you how you can set up your hosting business to run efficiently and mostly automated by putting the right systems and people in place.
- Let’s talk about how How to Choose Your Market
I’ll start off with giving you my insight from owning short-term rentals in different markets across the country. I like the towns that have year-round demand. Markets that are warm year-round and attract visitors because of that like Tampa, Phoenix, LA, cities in the sublet or even smaller more affordable markets that are right outside the cities like that may be a better place to start out without breaking the bank. Or markets that are winter wonderlands with ski resorts and winter activities that also have summer attractions like where I own properties in Lake Tahoe, Salt Lake City where I live, and places around national parks that stay open in the winter and attract people in. And again, maybe it’s an adjacent market or one within driving distance where there will be less competition and lower price points.
I suggest that you start investing in short-term rentals somewhere close to you, OR somewhere you are familiar with. Maybe you don’t live in a perfect urban market or destination market. And that’s okay, because Airbnb’s can work almost anywhere, by either being close to what brings people to that area or being so unique that you draw people to you. The truth is, the market doesn’t matter as much, it’s the property you find, what you do with it, and how you run it to maximize it’s potential. Being in a good real estate market that is bound to appreciate is the cherry on top. All things we will get into.
Here’s Airdna so you can pull market and property data to vet your opportunities.
- Stand out from your competition
It’s important to realize that whether you
a. Arbitrage, buy, or Cohost – it’s all the same operation. Simply put, cohosting is when you cohost someone elses listing, usually for a percentage of the revenue. Arbitrage is when you rent a property and then sublease it on Airbnb. And buying you obviously purchase the real estate and rent it out on airbnb. Operationally they are all the same. So don’t get hung up here, because you can make sure to stand out from other listings and perform better than other hosts regardless whether if you arbitrage, buy the real estate, or cohost.
b. Research your competition and find ways to differentiate your listing.
- Look at competitors’ listings on Airbnb. Do they all look the same? Ask what is missing. How can you stand out?
- Hit the popular amenities in that area if you can (show how to find them) because the algorithm will boost you up by checking those boxes when other hosts don’t. You can go to Airbnb and search you area, and on the search page where it shows the listings you’ll click on filters and scroll down to where it says amenities, and those are the most popular amenities in that area, which vary by market. If you check these boxes, you’ll be more likely to show up in search results.
- Look at the top-performing listings on Airdna. What are the common themes that make them the best listings. Aim to match or exceed that and find a separator from your listing. It might be a spectacular game room or theater, an awesome outdoor space or pool, or eye-catching cover photo. Dusk photos with great lighting and or string lights is a great way to stick out.
c. The appeal of your listing is a big factor in how the algorithm ranks you, so play into that. It will determine the amount of views you get, and thus the bookings, and then more reviews which come back around to fuel your views again and the algorithm picks up on this. Standing out from your competition with better design, unique spaces and amenities, and better WOW photos will get you more views, and then better guests that pay higher rates and believe it or not, complain less, will book your place – all which end with you making more money. I just did a whole video on cracking the Airbnb algorithm a couple weeks ago, and if you haven’t seen that one you should definitely go watch it to understand what all goes into it.
Speaking of the algorithm, YouTube’s algorithm in this case. If you guys like the video and are finding this valuable, or just want to do me a favor, please hit the like button on this video (GIF of a swonton bomb on the like button). That tells youtube’s algorithm that it is a good video and will push it to other people who can benefit from it. And subscribe and hit the bell if want to keep seeing more good short-term rental content like this. I post a video every Friday and my goal is to deliver you guys the highest FREE STR value on the internet.
- Build your Airbnb Dream Team
a. when starting out you need 2 key people: a great cleaner and a great handyman. I put emphasis on the great because these people will ultimately be the ones to take care of your listing so that you can focus on running your business and building your portfolio, or just enjoying what you’ve built and traveling the world with the semi-passive income from the investment in your short-term rental. You need the cleaner obviously to turn the property in between guests so you don’t have to (I’ve been there and it’s much better to have the cleaner) and you need a handyman to take care of maintenance items for when a guest inevitably breaks something, or a lock jams, you have a leak, whatever the case may be. You want to have these people upfront so you aren’t blitzed by a problem later without your team in place to handle it.
b. Finding these people. I’ve always had the best luck with referrals or recommendations. If you know people in the area who know a great cleaner or handyman, your chances are pretty good of getting them on your team. Your network is almost always going to give you the best people
I’ve also found great people on:
- Turnoverbnb which is now Turno
- Indeed – we hire a lot of positions for our business there if we don’t have any open referrals at the time we are hiring
- Facebook ads or a simple facebook post asking for recommendations
- Craigslist
So there are some tools you have at your disposal. The point is to cast a wide net, interview with intention and find the people that are responsible and willing to step up when needed. Explain to them they may need to go out in the case of an emergency to make sure the guests are taken care of. You need to talk about this and set the expectation upfront so they don’t call you to handle a problem that they can handle. And though you always want the best deal and to pay the lowest, pay them well so that they take care of you. You can always cut costs later but if you cheap out at the beginning you may never find, or worse lose, the right person and that hiccup could be the pressure that pushes you out of the business prematurely. I love to buy from those kinds of people, but I don’t want you to be one!
- Reviews are a Host’s Lifeblood
Reviews are so important because of how listings are ranked in Airbnb. And if you want to get bookings, you need your listing to be seen by potential guests, right? Airbnb’s algorithm is performance based after you accept your first guests and start getting reviews (before that it’s interest based as it boosts your listing and they see how potential guests interact and book). So to get seen, you absolutely need to get good reviews.
My top ways for getting good reviews seem simple enough.
- is to provide great service. If you really accept the hospitality mindset and go above and beyond for your guests, you’re going do well. Especially because you’ll already be in a good high-demand market, and have a listing that is unique and stands out from the competition, and your dream team in place from the previous tips. So treat your guests like gold, read their reviews of you and take their feedback, and always look for ways to improve and deliver an increasingly good experience.
- Review reminders
- To ensure you get good reviews and that the algorithm gods shine their light on you, you will also benefit from incorporating review reminders. This can be in the form of a text, or message through Airbnb. To automate it, you can set it up in your automated messaging sequence and exchange pleasantries and wish the guest safe travels yada yada, but the important part is to say something along the lines of “If you enjoyed your stay, please leave us a 5-star review in the app. It really helps us to show other guests that this is a place worth staying. And if you didn’t please let me know here and we’ll make it right!” Hear this, people are 70% more likely to leave a good review if simply asked. That means you are leaving 7/10 reviews on the table if you don’t ask. And we all know, just look at Yelp, that people are more inclined to leave a review if they had a bad experience. People love to vent to the masses! But if you’re a proactive host, you won’t have many of those, and because you ask people and then they review, you will have gleaming reviews. This is going to give you the edge over all other host and help you get superhosts.
Now, how to deal with bad guests and get reviews removed
Surprise, not all guests are a walk in the park. You will have bad ones and you will have some problems you have to deal with. But don’t let that throw you off your game of your long term goal of using Airbnb to build up your cash flow and reach financial independence. I’ve seen too many would-be hosts not be able to stand up to that pressure. And I don’t want you to be one. Some ways to deal with bad guests are to document everything. If you have a bad guest that leaves damage or excessive mess, and it’s going to cost you time, money, and energy to make right here is one of my super tips:
First point out to them that you found the damage, or mess, or missing item – message them through the app, that’s key. Not a call or text. Ask them if they noticed and if they are okay, if it disturbed their stay, whatever you throw in here. The point is to give them a chance to own up to it so that when you put in the resolution request, it’s an easier process. Or if they are crazy they might deny and say “it was like that when we got there”. Like right, okay, our cleaner left a broken lamp scattered across the living room floor and kool-aid stains all over the couch and didn’t say anything. Ah, guests. Then, you let them know that you’re going to file a resolution request to give them the heads up and voice anything they might have. The point is to take the blame off of them and put it on the situation. If they deny the request, Airbnb aircover will cover the damange. Make sure to take photos and keep receipts of all replacement items or extra cleaning, this is the documenation. And then file the resolution and Airbnb will handle the rest with them and reach out to you for the evidence and receipts. This is to inform them, let them know you care a bit, and helps to avoid the bad review. It makes it about the situation and not blaming them in the case it might not have been them, and helps you avoid a retaliatory bad review.
And you can protect your review score if you do get a retaliatory bad review where they mention the cost or fees charged to them, because you can likely get that review removed by reaching out to Airbnb support. Retaliatory reviews are against their updated review policy, and its in your favor as a host to use that.
Another tip, especially when dealing with “Karen” guests, you can probably picture that kind of guest or person, is when a guest messages you complaining about something and threatens a bad review for you not doing something, or you foresee the conversation going in that direction, is to ask them directly in the message “would this cause you to leave a bad review?” or “sorry, are you saying if we don’t do X you’ll leave us a bad review?” If they say yes, you can apologize or say whatever excuse, have that as amo to get the review removed. This is for when they are putting you in an impossible spot. You can use that message thread to prove to Airbnb when you dispute the review that the review was retaliatory or extortion, and that is against the Airbnb review policy and you can get that review removed. I’ll link the Airbnb review policy below so you can check it out to see what I mean about kinds of reviews that are against the policy and can get removed. These are some ninja tricks to keep your review score high so that you rank well in the algorithm and stay on top of the rankings to get views and bookings.
With normal guest problems, a lot can get lost in translation through the messaging app, and tensions can get high. In this case, just call the guest and put on your customer service hat. Dealing with them directly, listening to their concerns, and doing what you can within reason to alleviate the issue will do wonders and save bad reviews from happening and diffuse the irritable guests. When we get in that spot, someone on our team picks up the phone and calls to handle the situation. And most of the time they end up leaving a good review.
- Refunds, Discounts
And not all guest issues that you will deal with will be from bad guests, or “Karens”. Most will be reasonable people with valid concerns, that are lower threat. But nonetheless, remember you are in the hospitality business and doing right by your guests not only gets you good reviews, but also repeat guests and people who may recommend your listing to others. And to keep people in your good graces when issues arise, it can be worth giving a discount on their stay, refunding the cleaning fee in the case of a cleanliness issue like the cleaner left hair in the shower or on the toilet (we hear that one a lot) or to give a discount on a future stay. The goal is to give them something worth value that is affordable for you and will mean something to them and show you care. When you do the right thing and take care of people, they remember that and reward you with the good review. Most of the guest issues we have still end up as 5-star reviews because we give minor discounts or refunds to build goodwill with the guest and I can tell you the short-term concession is worth it in the long run for your reviews and reputation.
- Automate
And an absolutely key part of running your Airbnb business both profitably and efficiently, is automation. You need to put systems in place so that your business runs without your constant direct involvement. That’s the biggest thing that burns new hosts out, is never being able to disconnect from their short-term rentals and always being on-call. But you can be a pro host, or at least act like one and guard your time by putting things in place like automated messages, smart locks, review reminders, using cleaning software and dynamic pricing. These things together are the tech stack that is going make your short term rental business buzz along and continue to print money without you being attached to bringing in every dollar. And the best part is you can do it all from your phone, from anywhere.
a. Automated messages
So automated messages are step 1 into making your business more passive. I started out when automated messages wasn’t such a big thing, and I did all the guest messaging. All the check-in instructions, check-out instructions, and on and on. But more than that, it was all the in-between questions I got because I wasn’t proactive. Now, our automated message sequence answers questions before they are ever asked. We have things like our guest books and house manuals with instructions, and directions, and local recommendations sent out in our automated message sequence. It’s also texted to them so they don’t miss it. And Our check-in message has the check-in time, instructions, parking directions, and door code all sent. And when they reserve the reservation send a welcome message with what to expect and let them know when they’ll get the door code. Then we checkup and make sure their stay is going well and they have everything the need, getting ahead of it if there is something wrong, so we can save the situation before it turns into something like a refund or bad review. And finally our check-out instructions. So their whole journey with us is curated to be efficient for them and us. And we have hundreds of guests a week and it works for us, for you just starting out it will cut your time spent to a mere fraction of what it would be otherwise.
b. Smart locks
I can’t say enough about smart locks. I used to use electronic locks, that you just set a code on and forget about it. It didn’t connect to the messages and sometimes guests didn’t get codes. And a few times we had guests check-in early or come back after checkout when another guest was there because the code was the same. Learn from my mistakes.
For the last 3 years we have been using wifi enabled smart locks that connect to the wifi, and our property management system (or PMS) and through a 3rd party integration, every time a guest books, they get their own unique code. And the great thing is, that code is only active from check-in to check out. So they can’t come in early before the unit is cleaned, because first impressions are everything. And they can’t come back and get in after their checkout. The best thing is the code is sent directly too them in the check-in message that they get a few hours before check-in, so it’s automated. We don’t have to generate a new code or manage codes for different guests. And the smart locks allow you to manage them on the app so you can lock and unlock on your phone, and so can your cleaners, so you don’t have to do all the code management yourself to ensure the security of the unit. Plus you don’t have to worry about guests, or yourself, losing physical keys. It’s a huge piece of automating your business, and for only about $300. Whereas other electronic locks are like $100-150, they are well worth it.
d. Cleaning software
This can be a simple tool like Turno which was the software formally known as turnoverbnb. I use this on my single house in Ogden, Utah. Or it can be another similar software, and even some PMS have it built in or an integration for whatever you use. But cleaning software is something that will share your calendar with your cleaners and allow them to accept the turns and keep you both updated. It will notify them of new reservations, and changes to the calendar like cancelations and extensions so that your cleaner is up to date and never misses a turn. That way you do not have to be the one communicating all of this, and simply check to verify cleans are scheduled so that it adds another layer of automation and takes less off of your plate. You see the theme here.
e. Dynamic Pricing software
I spent a lot of time in the past managing prices, looking at the calendar and changing prices or adding discounts. Dynamic pricing is a software that will automatically change your prices for you based on supply and demand. It scrubs all the data off the booking platforms and at what rates, certain dates are getting booking for and adjusts your prices accordingly. This is one you really need to use because it will easily add 20% to your top line. When demand is low, it will lower the price within parameters you set, and when other hosts who aren’t using dynamic pricing have static prices stuck at the higher rate, you will get booked instead of them. And likewise, when demand is high, it will boost your rates so that you capture that demand. It does take your time to still research rates and input your settings, but once you set it up you only have to check it monthly, or maybe evenly seasonally to make sure rates and bookings are where they need to be, as long as your bookings are steady. And you can always make adjustments. This will save you so much time going in and manually changing prices and will also earn you more money, so it’s a no brainer.
f. PMS and integrations
For those with a few units, or when you get to a few units, you’ll also want a property management system or PMS and channel manager, today they are essentially the same thing. A PMS has all your functions like automated messages, a unified inbox, and connects all your integrations like smart locks and dynamic pricing and a channel manager is one calendar for all your listings across different platforms, for when you are on more than just Airbnb. But I recommend starting out on just Airbnb to get your reviews and bookings there to boost your listing in the algorithm. If you start Airbnb and VRBO and booking.com, your bookings and reviews will be spread across all those platforms and it will dilute your performance on each one. So by starting with Airbnb you consolidate all that in one place and play into the algorithm. Once that progress is built, then expand to more OTAs like VRBO and booking.com. And a PMS will integrate all that in one place so you log into there to mange everything. It saves a ton of time and makes managing your STR business a streamlined operation.
Phew. That’s a lot right! I hope you guys know I didn’t hold back on you. I want you to get the strongest, fastest, and best start possible! And if this came at you fast, go back and rewatch the sections and refer back as you work through each part. These are all things that I use in my business to manage 80+ listings and only take a few hours a week of my time. And when you’re starting out that should be your goal too. Go get that high STR cash flow and make it streamlined so you can enjoy the fruits of your labor. This stuff may take a little longer to learn and set up at the beginning but I can promise from experience it is so worth it. Then you can quit your job, and work from anywhere, and live the 2020’s version of the American dream.
