Yahoo Finance Airbnb your home: how to generate extra income from your property
Fancy earning some extra cash this summer? Airbnb (ABNB) might be an easy way to do this but make sure you know what you’re doing first.
With 2022 seeing finances squeezed, many homeowners are looking to their properties as a way to make extra income. Research from Airbnb shows hosting on the site earns homeowners an average of £6,000 per year — the equivalent of two months’ salary for most people.
While it may be lucrative, there are several things you need to be aware of before you start taking bookings.
With the most popular month to host — August — approaching, here's everything you need to know if you want to Airbnb your home/
Check with your mortgage provider
Before you do anything else, you need to tell your mortgage provider if you’re planning to Airbnb any part of your property.
"The lenders response will vary. Some will charge a fee to grant you the consent, and others will not be happy for you to let it out," says Sarah Tucker, founder of The Mortgage Mum.
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If they do agree, there may be conditions attached.
"Often lenders will put a cap on the number of days you can Airbnb the property for, or the way they calculate affordability will differ… That’s why you need a broker to help to navigate this," says Tucker. "The good news is we’re seeing more lenders becoming open to this, as it becomes more popular."
Consider your insurance
You also need to check your insurance, as not informing your buildings and contents insurer can invalidate your cover.
It’s likely that you will need to alter your policy in some way.
"If it’s a one-off or infrequent use then a top-up policy to run in conjunction with a home policy (if your insurers agree) may suffice," says Heath Alexander-Bew, director of Alan Boswell Group.
"If it is any more than occasional then you should consider swapping to a holiday let or serviced accommodation policy so that you have the right cover for the additional risk that comes with letting out your property."
Check your council’s rules
Some councils have limits on how much you can Airbnb a property.
Several London councils only allow you to rent out your property for 90 days, so you need to make sure you know what the rules are before listing a property.
Be honest with your description
If you’ve had the OK on the above, it’s time to market your property.
Take as many photos as you can and include an extensive description. Airbnb will guide you through the process and give you hints on what to mention. They’ll even suggest a price, which it’s worth going with, at least at the beginning.
Helen Dewdney of The Complaining Cow warns against exaggerating your property’s merits. "If the property does not match the description, they [the customers] have been misled, or the site or owner has provided them with services not carried out with reasonable skill and care, then they can use this law to gain redress," she says.
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"This may be a partial or full refund.... The contract is between Airbnb so any refund will be decided by Airbnb."
She also warns against offering customers a discount for booking outside the official site. "Air BnB will ban a host who tries to get a guest to book directly with them."
Think about your booking policies
Airbnb offers hosts three levels of cancellation policy — flexible, moderate and strict.
"You need to work out which is the best policy for you," says Superhost Annette Beckwith who rents out two properties in Sussex.
"During COVID people liked a flexible booking policy because it meant they could cancel up to 24 hours beforehand and get a full refund, but this can be inconvenient for hosts who suddenly find themselves with an empty property."
You also need to carefully consider your minimum stay policy.
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"If you aren’t prepared to clean sheets every day, I’d suggest making this three days or more,’ says Beckwith.
"But you can alter this throughout the year at any time. I have a five-day minimum stay during the school holidays but, in the winter, when it’s quieter, I drop it down to two days."
You also need to think about whether you allow pets at the property and let people know if there is parking available.
Don’t skimp on cleaning
There’s a specific rating for cleanliness on Airbnb so don’t skimp on your cleaning bill.
"People expect hotel standards in terms of cleanliness, bedding, and furniture so it does require a full clean in each turnaround and a deep clean every three months," says Superhost Polly Arrowsmith, who’s been renting out a flat in London for three years.
"The flat is 387 sq ft and takes a minimum of two hours to clean. You need to check the dishes, the inside of the fridge, the microwave, clean out drawers, polish the mirrors and bathroom cups, and change bedding. We have a checklist to go through."
Katherine Blackler rents out her two-bedroom London flat and has found it useful to buy specific sets of bedding and towels purely for Airbnb use.
"Seriously consider outsourcing the laundering of towels and bedding to companies such as Love2Laundry… I use their app from wherever I am in the world to schedule pick-ups of dirty laundry and drop offs of the clean washing," she said.
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"It’s been a game changer, and has meant we can take back-to-back bookings as we haven’t got clothes airers draped with drying bedding overnight."
What to give your guests
As well as the basics of towels, bedding, toilet rolls, washing up liquid and soap, many hosts provide little extras for their guests.
"We give them one pint of milk, orange juice, biscuits, some sweets and a bottle of bubbles, red or white wine, plus some cereal, tea, coffee, sugar, salt, pepper, and olive oil," says Arrowsmith. "It means that no guest has to worry about basics."
Remember any income is taxable
Any income you earn from Airbnb is taxable and you need to keep proper accounts with expenses and outgoings accounted for. If you’re using Airbnb regularly, engage an accountant to help you work out your tax liability.
The only time when you don’t need to pay tax is if you rent a furnished room and the property is your main residence. In this case, you will qualify for the government’s Rent-a-Room scheme, and you don’t have to pay anything on the first £7,500 you earn.
Be yourself
While it’s not always possible, all the hosts suggest trying to meet the people staying at your property in person. "This humanises us," Arrowsmith says.
"The feedback has been that they appreciate the thought that’s gone into the home,’ says Blackler. "It feels homely and welcoming for them as soon as they arrive. That’s to me is what Airbnb is really about."
