Your 2018 beginner’s guide to becoming an Airbnb host
The average Airbnb host in London nets around £135 a night, and given the generous tax-free earnings incentive, you may be tempted to join the gig economy trend.
There are nearly 50,000 Airbnb hosts in London alone while across the globe, hosts are registered in 65,000 cities.
While Airbnb has been going for nearly a decade, you may now only be deciding to get in on the action.
Portico Host, the London Airbnb management company, answers key FAQs in this beginner’s guide to becoming an Airbnb host in 2018:
1. How do I list my property on Airbnb?
It’s free to put your property on Airbnb, simply head to the website and create a listing. You’ll have to fill out a description, upload some photographs and select your nightly price. Once you’ve done that, the next step is to set availability and your house rules – then wait for the bookings to start rolling in.
2. Will my property be insured on Airbnb?
Airbnb provides a Host Guarantee up to £600,000 at no extra cost, which is backed by Lloyd’s of London.
The cover protects your home against any damages, but it doesn’t allow you to claim for cash, jewellery, collectables or personal liability – so Airbnb recommend you obtain additional home insurance if you are going to be leaving your belongings in the property.
It’s also worth noting that many home insurance policies won’t cover for paying guests, so make sure you read the small print and check you’re covered. While it’s very unlikely that something will go wrong, it’s certainly sensible to take preventative measures, just in case. Make sure you are suitably insured, you efficiently screen potential guests and set up a security deposit in your listing.
3. What rules or regulations do I need to be aware of?
Since the beginning of 2017, entire home listings in Greater London are limited to 90 nights per calendar year, unless hosts have permission from their local council to rent it out for longer. Airbnb will cap your listing after 90 days, but it’s worth keeping an eye on your calendar and knowing how long you have left so you can plan accordingly.
There’s nothing to stop you renting out a room or two out of three rooms of your primary residence. The rents you can achieve during weekend stays or overnight stays can easily match or beat what you could achieve for a monthly rental income from a normal tenancy – plus you can enjoy greater flexibility regarding when you want to rent out your home.
Though Airbnb is a short-term solution, that doesn’t rule it out for landlords who favour long-term tenancies. Tenant demand surges by up to 64% in June – September, as recent graduates head straight to London to find their first job. It’s a clever idea therefore to synchronise your tenancy dates to take advantage of higher prices and shorter voids in summer. One way of doing so – and potentially maximising your income – is to put your property on Airbnb during the colder months, before switching to a long-let or as AST tenancy when demand is highest in the summer.
It’s also important that your property complies with local health and safety regulations – as if it doesn’t, you’ll almost certainly invalidate any insurance you have. We recommend you get an expert in to carry out gas and electrical safety tests, as well as a fire risk assessment.
It’s also helpful to provide a book of emergency contact numbers, a first-aid kit, and make sure you minimise any potential hazards.
4. What do I need to know about tax on Airbnb earnings?
In terms of paying taxes, the same rules apply as to any other business. In other words, money you earn from hosting is income and therefore subject to tax.
If you’re renting out your primary or only residence, you can benefit from the rent-a-room allowance, which allows you to earn up to £7,500 per year without having to declare it or pay tax on it. You must complete a tax return if you earn more than the threshold, and income tax will have to be paid.
On the other hand, if you’re a landlord and Airbnbing a property that isn’t your primary or only residence, the same rules apply as if you were letting out your property long-term.
If you don’t have an accountant or an agent managing your property, make sure to keep accurate accounts of income for tax purposes in case you need to declare the earnings from your property when filing your annual return.
5. Can I screen guests before accepting them in my home?
For most people, the most daunting aspect of Airbnb will be the prospect of welcoming strangers into your home. But there are lots of options available to Hosts to screen and verify potential guests, plus communicate with them too. For this reason, 99% of hosts will never have a problem with guests.
Firstly, hosts can require potential guests to complete Airbnb’s Verified ID process. This allows hosts to find out exactly who the guest is, plus have a record of their identification online.
Hosts also have the ability to find out more about potential guests through communicating with them. If you’re using ‘Instant Book’ you can also select that only recommended guests can use the feature.
Keep in mind that fair housing laws and discrimination rules apply.
6. How much can I make from renting my property on Airbnb?
The average London property achieves around £135 a night, but during the peak festive and New Year period, guests will pay around £300 a night to stay in a centrally located London property.
The amount you can earn varies according to your property and location, but, as a general rule you’re expected to earn between 25% and 50% more than you would on a long-term let.
Many people decide to rent out their property while they’re on holiday to effectively pay for their trip; some will put their vacant property on Airbnb to earn money until they sell, while others will put their home on the site when a big local event it on, such as Wimbledon, and stay with friends or family. Of course, the amount you can earn will dramatically increase in line with big local events.
It’s best to look at similar listings in your area that have lots of reviews to get an idea about the right price range. It’s always worth starting at a slightly lower price to capture the initial bookings. After you build up your reviews, you’ll need to raise your prices accordingly.
7. How can I stand out from other Airbnb hosts in my area?
The number one rated London listing reported on AirDNA is a room within a flat, (the host stayed in the other room), boasting 48 five star reviews. Scrolling through the property reviews, certain points come up again and again: great communication, spotlessly clean, super responsive, and that the property perfectly matches the description.
It’s so important you clearly communicate what you’re offering, as a guest is going to be disappointed if the property doesn’t live up to its description. The more great reviews you get, the more bookings you’re likely to achieve – and the higher the price you can charge.
Also, added extras like a bottle of wine or fresh milk always go a long way. At Portico Host we provide all our guests with a useful welcome book and a Portico Places card which entitles them to a range of fantastic discounts in the local area. We also offer a meet and greet service, plus installing and setting up Wi-Fi, furnishing the property all help to maximise the property’s appeal.
8. How will I receive payment?
Airbnb releases your payment around 24 hours after your guest’s scheduled check-in time, though the time it takes for the funds to arrive in your account depends on your payment method. If your guest is staying for 28 or more nights, payments for the specific reservation are released monthly.
Though it’s completely free to list your property on Airbnb, the company makes its money by charging fees to both guests and hosts on each rental. Hosts are charged a flat fee of 3% + VAT on each booking – and this is deduced from your net total minus any security deposit you may have received.