The VRBO & Airbnb Business
Short term rentals (STR) are becoming more popular among travelers, but are these rentals a good business? A short term rental is a furnished living space for a short period of time. Online STR companies Airbnb & VRBO give consumers the option to book a restful night, a campers experience, and/or various other STR experiences. In other words, these apps partner with everyday people (aka hosts) to connect innovative living spaces with consumers. If you are considering becoming a host, here are a few things you need to know before you start hosting guests.
1. Smart Pricing
Smart pricing tools allow Hosts to set pricing that automatically go up or down depending on analytics. These analytics can be based on the season, demand, and/or relevancy of your property details. Hosts use smart pricing in order to beat out their competitors without having to “check-in” on their competitors. However these tools do not always prevail. The algorithm has put many Hosts in uncomfortably low pricing criteria due to the objectivity of the algorithms and sometimes negligence of Hosts. Many Hosts don’t realize that you are able to set minimums and maximums of price. However when you physically make changes to your listing, Airbnb rewards those Hosts by giving priority to “recently updated” listings to be shown to consumers first. Consider doing the leg work to set pricing based on your knowledge of your market area.
2. Your local competition
Living in New York City? According to HostyApp Airbnb has almost 45,000 listings in New York. The average price per night is about $145 and then Airbnb collects about 15% of total costs (Service Fee/Taxes/ etc..). Nearly half of all listings are home share room rentals with an average price of $99. So if you book one week out the month you could net out at around $595 monthly for a room rental (assuming you’ve added operational costs to your nightly pricing). In this new and popular marketplace of short term rentals, the name of the game is “Be Seen.” The people making tens of thousands of dollars off STRs usually own a large vacation rental home that they rent out for $400+ nightly. These top properties sell you the traditional stay with an experience. The Airbnb/VRBO business can be good money if you do not live in a crowded area and can offer an innovative experience. #Plan-tas-tic!
3. Getting Started
To sign up for Airbnb or VRBO in the U.S you’ll need a computer, some basic info and photos! That being said, it is always pivotal that you fill out a W-9 form so that you receive the proper year-end tax forms for filing.
Check out our listing!
https://airbnb.com/h/repottingthefloors
