I’m sure you’ve seen the movie, “The Holiday” staring Cameron Diaz, Kate Winslet, Jack Black and Jude Law about two single ladies who traded homes in England and Los Angeles during the holidays. This is one of my favorite movies, not because of the house trading, more for the love story. Fast forward eight years from when that movie was released and the idea of house swapping started. Now people aren’t “house swapping” per se, but they are becoming Modern Day Inn Keepers of sorts.
I’m sure I have your interest now and you are wondering where I’m going with this. I know several people who rent their homes out when ever they travel. I also have a few other friends who just have extra bedrooms in their homes and one friend who has a basement apartment that they rent out regularly on a short term basis, to make extra money. They have set it up so it’s very easy to do and manage. It’s all done on an app called Airbnb. Anyone with a smart phone can download the Airbnb app and set up a profile. You can use the app to rent a place for your next trip just about anywhere in the world, or you can set your home or spare room/rooms up so you can rent them out to make money. Your extra square footage could be a gold mine that you never even thought of!
If you have an extra room or maybe a basement that could easily be turned into a basement apartment with a kitchenette and bathroom, this may be what you’ve been looking for to make extra money. You have to be ok with strangers being in your home or space when you aren’t home (if you are renting your place out when you travel) and when you are home if you are just renting out an extra room in your home. Some travelers love to rent rooms in local’s homes instead of being isolated in a hotel room.
Basically, if you do have a space that you could easily turn into a revenue producing venture there are a few things you will need to do in preparation to rent your space out.
First off, you will need to sign up on the app (Airbnb.com) then set up your complete profile, you will be able to tell your potential renters a little about you, your home and your neighborhood. You will write a description of your home or room in a way that will make them want to rent from you instead of someone else. If you have more than one room to rent, you probably want to list them separately. Make sure your home/rooms that you would like to rent are clean and tidy when you take photos of them before you upload photos that accurately represent what the space looks like. Your description and photos are what is going to sell your space, so make sure they show your space in the best possible way.
Once you are on the app and ready to set everything up, you can set your price, your cancellation policy, your cleaning policy (do they pay a cleaning fee or clean it themselves before they leave). Most of my friends, charge a cleaning fee then hire someone to go in and clean between rentals. Airbnb does take a percentage of whatever you rent your space for. So take that into consideration when you are setting your price.
The price for your space will be dependent on what the market in your area is like. In the Denver market, short term rentals are really hard to find and a lot of people are turning to Airbnb to find short term rentals until they can find a more permanent housing solution. Most of the people I know who are renting rooms or homes on the app charge between $75 and $200 a night. The price is dependent on what is offered with each rental. Some friends only offer the space while another friend also cooks her renters one meal a day (normally dinner) and that is included in the price of the rental. Most of them don’t allow more than a 28 rental. By only allowing short term rentals, they aren’t going to run into any landlord/tenant issues.
Some things one of my friends did to get ready to rent her space out while she was going to be traveling:
1. Secure valuables that you don’t want your renters to use away in a closet or cabinet and put a lock on the door that only you have a key for.
2. Clean out drawers and a closet so that your renters have space to unpack and hang up clothes that may need to be be hung.
3. Leave a couple of bottles of water, a couple of granola bars and a few pieces of fruit (fresh apples work great) with a welcome note for your renters. This is a nice thing to do in case your renters will be arriving late and may need a snack or a quick breakfast in the morning before they can get to the store to stock up on essentials.
4. If you want your renters to wash the sheets/towels before they leave/check out – leave instructions for them and if you have pay laundry, leave quarters for laundry.
5. Have a guest book for your renters to sign or leave you notes in. This is a great way to keep track of where your guests are from and share what a great time they had at your place.
6. Create an instruction/welcome page or book, that describes the house rules (if there are any), any nuances about your pipes, electricity, neighbors, etc… and has emergency contacts on it. If you are traveling and you are renting your space out while you are on vacation, you don’t want to get a call about your hot water heater bursting. I’d recommend you try to find someone to be the point person or emergency contact while you are away. Maybe a neighbor or the person you have hired to come clean between rentals can be your emergency contact?
7. Get a combination lock box to secure to your doorknob or someplace near your front door to secure your key in. Then only send the combination for the lock box to your rentals once everything is confirmed on the app.
8. Set up your banking info on the app, so that Airbnb can transfer the funds to your account once your guest checks in and everything is going great. I believe that Airbnb pays once the guest has been there for 24 hours minus the Airbnb fee. You’ll have to read the fine print on the website to know the fee percentage and the details of when you will get paid. Also familiarize yourself with how they handle cancellations and any complaints.
Once your space is clean, your valuables have been secured, you are all set up on the app and your place is set up on the app as a space for rent with the dates that it is available (you can specify when it will be available for rent and when it’s booked or unavailable), you can go on your trip and make money while you are away or rent your extra space out regularly to make extra money.
You will have to claim anything more than $600 on your taxes as income, but if you set yourself up as a business you can also write things off that you purchase or have to repair to keep your rental in top renting shape. So keep receipts for any home repairs, any thing you purchase for your renters (water, fruit, snacks & wine/beer if you leave these type of things for them) and more. Check with your tax person to get a full list of things you might be able to claim on your taxes once you set yourself up as a business.
The possibilities are endless as to how creative you can be with whatever space you have for rent. You can rent one room, several rooms, your entire house, your basement or even your camper that is sitting in your back yard empty. Whatever you decide to get ready to rent, I recommend that you sleep or stay in the space at least once before you rent it out to a stranger. This way you can fine tune the bedding, towels, amenities (guests love amenities) and anything else before you host your first paying guest.
I also recommend that you browse other rooms or homes for rent on the app that are in your market to get a feel for what your competition is renting for, what amenities they may offer and just get an idea for how many others in your area are renting spaces out on the app. If you live in or near a city or well traveled area, you will most likely be busier or rented more often. Even if you live in a more rural area, you may still be able to rent your space out. You may just need to add some extra’s in (think about adding a continental breakfast or wine & cheese hour in the evenings) to entice someone to stay in a more rural area. Some people love staying in Bed and Breakfast Inn’s and you could set yourself up in your description to sound more like a bed and breakfast to entice city folks to want to stay in your home.
I think this is a brilliant way to make money on unused square footage or to make money while you are on your annual vacation. Check out the app (Airbnb.com) and let me know your thoughts about this idea of renting out rooms or homes by using a smart phone app. If you end up renting your space, I’d love to hear how it’s going and any pointers you may have once you have renting your space down to a science.