How to Guide Archives - Pikl

How to become an Airbnb Host: 11 essential tips to get you started.

Estimated Read: 10 minutes.

Thinking of listing your property on Airbnb? There is more to being a host than just taking some photos and listing your property online. Here are 11 essential tips that will set you on your way to from beginner to Airbnb expert.

1 . Check the law in your area

Local regulations around Airbnb and short term letting vary depending on where you live in the UK. In London, a 90 day restriction applies, meaning that no property can be let out on Airbnb for more than 90 days in a year. Similar proposals for potential future restrictions have been well reported elsewhere and so it is important to check you are up to date.

If your property is in Northern Ireland, it may be illegal to list your property on sites like Airbnb unless you are certified by the Northern Ireland Tourist Board. If you are unsure whether you fit into one of their tourist accommodation categories, check out their website or get in contact with them.

Fire safety regulations also apply if your property is in Scotland, Northern Ireland or England and Wales if you let your property out to guests.

2 . You probably need specialist insurance

Our research has shown most home insurers do not provide adequate cover for Airbnb. If you have landlord insurance, you might not be covered either. The cover that Airbnb provides is also limited. If your property is covered by second home or holiday home insurance, the cover provided by these types of insurance policies for claims caused by paying guests that stay at your property is usually inadequate. Check with your insurer first. If you need more cover, a specialist broker such as Pikl may be able to help you.

3 . How much work do you intend to put in?

Whilst there are high rewards, being an Airbnb host can be a lot of work. Even if you intend to only do it part-time, you will be responsible for tasks like changing sheets, meeting guests and logging records. If you intend to have guests regularly then that is a lot of work on a recurring basis. Alternatively, if you rent your entire house out then it may be easier to be a landlord and have long term tenants. In our Airbnb vs Landlord article, we weigh up the pros and cons so you can decide. Another option if you intend to have regular guests is to get a host management company to manage your property for you. They will do tasks on your behalf including meeting guests and cleaning but it is important to factor in the cost of hiring someone to do this.

4 . Get in the mind of your guests

Think about the location of where your property is based. Is it a holiday location? A popular destination for events? Find out where the local amenities and attractions are. Not only can this make your listing description more informative and attractive to guests, but it can also get you thinking about what kind of guests you want to attract. Do you want to attract couples or individuals? Business people or travellers? Think about what type of property these people might like and present your listing accordingly.

Once you have thought about your area and what kind of guests you want to attract you can start thinking about what prices you want to set. You do not have to set it to the lowest price as this may send the wrong signals. If your area that is quite popular or you think you could attract guests with more money then a higher price may be more appropriate as guests may be expecting this. Another thing to consider is any additional potential fees you may wish to charge. Would you incorporate a cleaning fee as part of the charge for the room or charge this separately? Are there any other fees to consider such as a late check in or pet fee? Crucial to making these decisions is checking out your competition.

5 . Check out the competition

Look at the current listings in your area. What prices have they set? How have they presented their property? What amenities do they list? This is vital research you should be doing before you list your property online. What do they do well? What do they do poorly? Write down a list and think about potential unique selling points that might make your listing stand out from the others.

6 . Is your space equipped for renting?

Providing happy guest experiences is key to being a good host. Put your health and safety hat on and go over your home with a fine tooth comb to make sure there are no hidden dangers lurking. Broken mattress springs, broken fire or carbon monoxide detectors, trip hazards and exposed wires should all be fixed.

Make it easy for your guests. Is your door handle easy to turn? Do all your lights work? Consider fixing the little quirks you take for granted or leave instructions behind.

Guests not only expect a clean, tidy space, they are looking for a hotel or B&B experience. Consider whether you are going to provide tea and coffee making facilities, Wi-Fi, a TV or any other home comforts. Tidy away any personal belongings or items which people may find offensive or distasteful. Remember your ideal guest and think about leaving them a list of local amenities and attractions in the area as a nice personal touch.

A great way to ensure you have covered every potential hiccup is to get a friend or family member to stay over for a few nights and let them rate you on your room and hosting. There may be some things you have missed in your own inspections.

7. Setting up your account

Now your space is ready for visitors, you can start creating your listing. All you need to do is click on the ‘Host a Home’ option and enter all the relevant details about your room. However, creating a listing that draws visitors in takes a little more effort. You can do this with good photography and a compelling description.

Getting your photography right is a key step. Is the lighting right? Does the room look smaller than it is? Or bigger? Have you managed to highlight any unique amenities you have to offer? Your listing photos will be the main thing potential guests look at and if these are not up to scratch they may not even read your description. If photography is not your thing, Airbnb offers a professional photography service in some areas.

The second crucial step for creating an appealing listing is with a great description. Start by thinking back to the notes you wrote about your ideal guest and the competition in your local area.  Your description should inform people of the important information, facilities available and any unique offerings. Secondly, you want to ensure that it is easy to read, with short, concise paragraphs. Finally, make sure you check your spelling and grammar.

8 . Setting up your calendar

When creating your listing, you will be given the option to fill in your hosting availability calendar. Decide the dates your room will be available for rent and set this out from the start. Remember to keep this updated. You do not want to have to cancel bookings because you forgot to block out the weekend your in-laws are coming to stay!

If you list your property across multiple platforms such as HomeAway and Booking.com then consider syncing your calendar so that you do not overbook by accident.

9. Create your T & Cs

Having people stay in your property can seem like a daunting experience, which is why you should always ensure that you have any terms and conditions and house rules in place before you start accepting guests into your home. Setting boundaries is important but also make sure they are reasonable. If your rules are perceived as being over the top, your guests may choose to ignore them anyway.

10 . Promote your property

If you are serious about Airbnb hosting, or you have already set up your listing but are struggling to get bookings, it may be worth promoting your listing across other platforms. You can promote your listing on Facebook, Google and LinkedIn to showcase your property. Not only will this increase the likelihood of your place being seen, it is also a great trust marker for potential guests, by showing them you are legitimate and not a scammer. Consider also listing your property on other hosting sites such as Booking.com and HomeAway.

11 . Think about tax

Whether you intend to do Airbnb as a full time job or a side venture, it is essential to check how your tax might be affected. If you are just renting out a room in your house, the Rent a Room Scheme allows you to earn up to £7,500 a year tax free. Alternatively, if you own the property that you are renting, you can choose to deduct expenses and have the first £1,000 that you earn tax free instead. If you plan to rent out your property commercially as a holiday let for the majority of the year, your property may qualify as a furnished holiday let. If you find tax confusing, it may be best to consult with an accountant or HMRC if you are not sure what is the best option for you.

How to become a landlord

Estimated Read: 10 minutes.

Many people find that renting out a property can be a steady source of income but being a landlord is not all about sitting back and waiting for the money to flow in. There are a whole host of regulations and responsibilities to consider and to help you negotiate this minefield, we have created a handy guide if you are just starting out.

Law and responsibilities.

There are several laws governing what landlords can and cannot do in the UK. You will be responsible for keeping your property safe, maintained and obtaining the proper paperwork. You will also need to be aware of your tenant’s rights as well.

Once you are up and running, typical day to day responsibilities may include:

  • Fixing anything wrong with the property. This could be anything from the boiler going down to the drains getting blocked. If you are not able to do this yourself you will need to hire a tradesperson to do this.
  • Conducting health and safety checks and risk assessments. If you do not you could be breaking the law and be held liable if any accidents happen.
  • Drafting tenancy agreements and getting tenants to sign the relevant paperwork.
  • Making sure rent is collected on time.
  • Inspecting the property to make sure it is still in good order.
  • Finding new tenants and conducting background checks.
  • Keeping up to date with your accounts and expenses. 
  • Answering tenant queries. 

For the full list of rights and responsibilities, check out the government’s website for England & Wales and here for Scotland. They also outline current rules regarding tax. How you declare you tax can affect what you claim for and how much tax you have to pay. You may want to hire an accountant to advise you regarding this if you are not sure.

The costs.

Now that you know the regulations and responsibilities that come with being a landlord, you should write down a list of all the potential costs involved. Typical costs can include:

  • Buying your property if you do not already own it. This will have the typical costs of buying a house associated with it including potential estate agent and legal fees. If you are seeking finance then you will need to take out a buy to let mortgage.
  • Fixing and maintaining the property.
  • Acquiring the relevant paperwork.
  • Potential legal fees such as for drafting contracts or taking tenants to court.
  • Hiring a letting agency to manage your property if you can afford this. 
  • Marketing costs associated with attracting new tenants.
  • Paying taxes and potentially hiring an accountant to help you with this.
  • Buying new furniture and making sure it is safe if you choose to furnish your property. 
  • Potential costs if tenants do not pay the rent on time such as bank charges.
  • Paying for insurance.

Once you have an idea of the likely costs and expenses you may incur, you can use this list later on when factoring in how much to charge for rent and filling in tax returns.

What kind of property do you want your tenants to live in?

How you market and present your property will affect what kind of tenants you will attract. Think about your ideal tenant. Are going to attract students or professionals? What is their income level likely to be? Depending on who you are trying to attract, you will need to make sure your property is relevant for these people. Research the area surrounding your property. Look for nearby amenities and what the average rent and properties in the local area are. Your research should inform who is realistic to attract.

Once you have done this research, the next step should be deciding what to do with the property itself once it is safe and ready to go on the market. Furnishing the property may help you to attract tenants that do not want to do this themselves but there will also be a higher cost required in sourcing furniture and maintaining it. Alternatively, there may be less costs with an unfurnished the property but you may attract a different type of tenant.

If you are looking to attract students or tenants that want convenience, you may want to consider including utilities such as energy, water and broadband as part of your package.

The type of tenant you attract may also be a factor in what type of mortgage you can get, which may not allow certain types of tenant.

Laying down the rules.

When setting your tenancy agreement, you may want to implement certain rules to help protect your property, which you can specify in your tenancy agreement. This agreement forms the basis of a contract can be used to evict the tenant if things do not go to plan, provided you have followed all of the necessary rules and regulations. Tenants that have pets or smoke could cause damage and require you to clean or repair the property so you may want to think about rules regarding this. You may also want to include regular inspections so that you can check that the property is being kept in a reasonable state of repair.

Many tenancy agreements also ban subletting, which is where the tenant lets out the property to someone else (normally called a subtenant). There has been a lot of bad press regarding subletting, especially with the rise of Airbnb and in cases where tenants have done this without their landlord’s consent. Most landlord insurers and mortgages do not allow subletting. However, it is worth noting that subletting is not always bad. For example, if you own your property outright or you have a specialist mortgage that allows your tenants to sublet, allowing your tenants to do this may help them pay the rent more easily provided you already have a good relationship with them. If you do decide to allow this or are worried about your tenants subletting or doing Airbnb without your consent, Pikl can provide specialist insurance cover to protect you in case the worst happens.

Regardless of the rules you choose to stipulate, keep in mind that your tenants will be living there. Make sure that your rules are reasonable, proportionate and stick within the law.

Setting your rent and maximising your income.

By now you should have a list of all of your potential costs and done market research on your local area to get an idea of the average rent and prices. Make sure that your rent is proportionate to your area and the type of tenant you are trying to attract. Lower prices are not always better. If you are attracting higher value tenants, they may expect a higher rent and ignore properties with lower rental costs due to perceived lower value. If you are hiring an agent to manage your property then they can help you with this but factor the costs of agency fees into your rental price. To make sure being a landlord is profitable, you need to make sure your rental income exceeds the costs you will incur.

If do not have a property to rent out yet or you are wondering at this stage whether it is even worth renting out your property then this is a good time to work out the likely rental yield once you have decided on the rental price you would be likely to set. This can help you calculate the likely return on investment you could get compared to investing your cash elsewhere. To calculate the rental yield, divide the annual rental income by the assumed value of the property (if you don’t know the value of your property or the rental income for a particular area, property websites such as Zoopla and Rightmove are going for giving you a rough idea). Once you have done this, times this amount by 100 and you should have the figure. An example of how this is calculated is below:

Annual rental income of £21,600 (£1,800 per month) / property value of £300,000 x 100 = 7.2%

In the above example we have a rental yield of 7.2%. Once you have calculated yours, this figure can help you consider whether you may get a bigger return on investment elsewhere (such as buying a different rental property or even compared to different assets such as pensions and bonds). When doing this, you may also want to factor in the current rate of inflation to see how this will impact your returns. If you are applying for a buy to let mortgage, the mortgage company may consider the rental yield when approving your application. For advice on this subject, you may want to speak to a financial adviser.

When looking at rental yields, you may want to consider the short term letting market if you are looking for higher return on investment. Our article that compares renting out your property on Airbnb to having long term tenants discusses this in more detail. Doing a combination of the two may be the best way to balance risk with with a maximum return on investment, provided your insurance and mortgage provider allow this. Examples of how to do this could be hosting on Airbnb in between tenancies or having a mixed portfolio of landlord and Airbnb properties.

The benefits of hiring an agent.

There are several benefits to hiring an agent to manage your property. These can include:

  • Local knowledge of the area.
  • Marketing.
  • Sales expertise when attracting new tenants.
  • Day to day management of the property and collecting rent.
  • Mediating disputes with the tenant.
  • Guaranteed rent (not all agents offer this and the rental income after agent fees may be lower).

Should you decide to go it alone, you will have to do everything yourself. The advantage of doing this is that you will have more control over your own affairs. If you do go with an agent then you will have to factor in agent fees when balancing your income against your losses.

Getting insurance.

Getting landlord insurance is not compulsory. However, it is strongly advised. Your property is worth thousands of pounds and insurance can protect you against risk of damage. It can also protect you against things like liability for tenant injuries and loss of rent if something unexpected happens. Having insurance may also be a requirement of obtaining your buy to let mortgage. Our landlord insurance article discusses everything you need to know to get started. If you also rent on Airbnb as well as having long term tenants at your property, our specialist insurance cover has the flexibility to allow you to do this.