Currently, Airbnb has over 150 million worldwide users, and the company itself is worth around $113 billion. With a market share of over 20% in the vacation rental industry, Airbnb is a clear force to be reckoned with.
Considering that guests can stay in properties as if they were locals, Airbnb’s allure is easy to understand. So if you’ve got property that’s unoccupied, why not put it to good use by listing it on Airbnb?
In this article, we’ll discuss how to start an Airbnb LLC so you can set up a lucrative business.
Research Local Regulations
Many places have cracked down on Airbnb rentals, especially in popular tourist areas. So while it’s a nice thought to rent out your property, you may not be allowed to do so, or there may be strict regulations regarding listings.
To avoid disappointment, check local zoning laws, homeowners association rules, and short-term rental regulations to ensure compliance. If you’re allowed to have an Airbnb listing, see if you need permits or licenses. Some cities require these, so be sure to obtain any necessary approvals beforehand.
Otherwise, the subject of how to become an Airbnb owner is easy: own property!
Conduct Market Research
You may have a nice apartment to rent out, but unfortunately, there may not be a demand for such a property. So before you dive in, assess the potential profitability of your Airbnb venture by analyzing similar listings in your area.
From there, if you decide it’s a worthwhile endeavor, determine your target market, property type, and pricing strategy.
Start an LLC
A question you may have is, “Do you need an LLC for Airbnb?” The answer is that legally, you don’t need to start one to be an Airbnb host.
However, it’s advantageous if you do so. The two main perks you’ll get are liability protection and potential tax benefits. An LLC also has less administrative burden than a corporation.
Regarding how to start an LLC for Airbnb, first choose a unique name for your limited liability company that complies with state regulations. Many states require that the name include “LLC” or “Limited Liability Company,” and that it doesn’t infringe on existing trademarks.
File the necessary paperwork with your state’s Secretary of State office. This typically involves submitting articles of organization and paying a filing fee. You may also need to draft an operating agreement that outlines the ownership structure, management responsibilities, and decision-making processes for your Airbnb LLC.
If you don’t want to file paperwork or are afraid of doing it incorrectly, then use our business registration service. Not only can you check if a business name’s available on our site, but you can also get a year’s worth of registered agent services for free.
Get Insurance
The good news is that Airbnb offers host liability insurance; should a guest get hurt or their belongings damaged/stolen while staying on your property, they’ll cover up to $1 million. You’re automatically opted in through AirCover, and you can opt out if you wish (do note that those hosting in the UK can’t do this).
It never hurts to get additional coverage though. Consider purchasing your own liability insurance policy to protect your Airbnb LLC from potential lawsuits or property damage claims.
Set Up Financial Accounts
Open a separate bank account for your Airbnb LLC to keep your business finances separate from personal finances. This isn’t mandatory, but it’ll make accounting and tax reporting much easier.
Do you have multiple members or employees in your LLC? Then you’ll have to obtain a separate tax ID from the IRS. This is called an employer identification number (EIN) and it’s similar to a Social Security Number (SSN), except it’s for businesses.
Keep detailed records of your rental income and expenses for tax purposes. Also, consult with a tax advisor to understand your financial obligations as an Airbnb host, including income tax, occupancy tax, and any other local taxes.
Prepare Your Property
Whether it’s for business or pleasure, people are renting our Airbnbs to have a home away from home. And no one wants to stay in a rundown pigsty, so clean and declutter your property to make it appealing to guests.
In addition, consider investing in quality furnishings, linens, and amenities. All of these things can enhance guest comfort and encourage them to book with you multiple times afterward. Repeat bookings are vital for a steady stream of income, so these are worthwhile investments.
Once this is done, you should take professional-quality photos of your property. You can use these in your Airbnb listing to show off what an amazing place you have.
Create an Airbnb Account
To get your property out in front of potential guests, you have to first sign up for an Airbnb host account. This is available through either the website or mobile app.
Make sure to fill out your profile completely, as the more information you provide, the more likely that people will be interested. Include a description of yourself and your property, as well as any house rules or policies for guests (more in the next section about this).
Set House Rules
While you want guests to feel at home, that doesn’t necessarily mean they can treat it as such, at least not fully. And unfortunately, not everyone will inherently respect your property, whether it’s intentional or not. So the best thing you can do is set clear house rules so they know what’s expected.
Establish rules regarding check-in and check-out times, as well as smoking, pets, noise levels, and other important considerations. Communicate these rules plainly in your listing and any pre-arrival communications with guests to ensure they get a clear picture before they stay.
Create a Listing
Provide detailed information about your property, including the number of bedrooms and bathrooms, amenities, and nearby attractions. Write a compelling title and description to encourage clicks, and put up those high-quality photos you took earlier to give people a realistic perception of your property.
Set your pricing and availability preferences based on market research and your desired occupancy rate. If you’re having trouble determining your rate, take a look at what other local Airbnbs are charging and what they’re offering.
To get your listing exposure, utilize social media, online advertising, and other marketing channels.
Prepare for Guests
You cleaned your property already, but chances are, it’s pretty barebones right now. On top of it being clean, your home should be well-maintained.
Make sure that everything’s in working order, including the appliances. Make any necessary fixes so you don’t risk anything breaking and inconveniencing your guests.
Provide essential amenities, such as toiletries, towels, and kitchen supplies. Consider adding personal touches like welcome baskets or local guides to enhance the experience.
Manage Check-Ins and Check-Outs
Since you’ve come up with policies for check-ins and check-outs, adhere to them.
Coordinate with guests to arrange a smooth check-in process. You can meet them in person or provide easy-to-digest self-check-in instructions.
Establish a check-out procedure for guests to follow that’s not too difficult or restrictive. Include instructions for returning keys and any other necessary items.
Airbnb has its own management tools, so take advantage of those. Or you can use third-party property management software to streamline operations.
Know How to Start an Airbnb LLC
By knowing how to start an Airbnb LLC, you’re better informed about whether you should be a regular Airbnb host or one with an LLC. Since the latter offers additional benefits, it’s usually the wiser option.
So follow these steps and provide a positive guest experience. With careful planning, compliance with legal requirements, and ongoing management, you can set up a successful Airbnb rental and generate income from your property.
Are you now interested in starting an Airbnb LLC? Then sign up with Business Anywhere today.
