Let us look at the key points that you should know before becoming an Airbnb host -
Listing on Airbnb
List your property on Airbnb with a description of the property, facilities and nearby attractions. Add photographs with captions so that guests have a better idea of the property. It is nice to write a few lines about yourself so that potential guests can picture the host.
Airbnb would require basic identification and property-related documents. You have to give your bank details as well for receiving payments to Airbnb along with your bank details to receive payments.
Renting out the property
You can price the property as per your wish. Do not charge a rate too high for the property and location. At the same time, a very low price will make the potential guest doubtful. The rent should commensurate with the location, facilities in the property, upkeep and demand, and supply. If you are not sure about the rent, you can use Airbnb's algorithm to set the price dynamically.
Understand the legalities of renting out your property. It might be different in different states and also depend on the type of property. Get all the relevant clearances and permissions. You will need a police clearance and submit Form C to the Bureau of Immigration of the home ministry for renting out to foreigners.
Airbnb offers Host Protection Insurance in India. It has a liability cover for up to USD 1 million in the event of third party claims of bodily injury or property damage. Insurance is subject to certain conditions and exclusions. You can get the details here.
Income and Fees
You will receive income in the form of rent. The rent is withheld for 24 hours after the guest does a check-in. This is to protect the guest from unwarranted scenarios. Airbnb charges 3% of rent +GST for each booking.
The rent you receive by being an Airbnb host is treated as income. It is treated as rental income if you have 1-2 properties and taxed accordingly. If you have more properties listed on Airbnb, the rent will be treated as business income for taxation purposes.
Remember the following -
- User ratings are important. The better the rating, the better the chances of earning more income.
- Screen your guests well. There have been cases of vandalism or damage to the property. Sometimes the number of guests or types of guests may be different from what was mentioned while booking the property.
- Inform your society and neighbours that you are renting out the property.
Should I become an Airbnb host?
If you have spare rooms or a property that you do not live in, you can consider becoming an Airbnb host. If the property is in a tourist destination or a prime commercial area, you have the potential to earn a sizeable revenue. Usually, the rent received by Airbnb hosts is more than the average rental value in the area.
Being an Airbnb host means you have to interact with potential guests, manage the queries and booking. You have to ensure that the property is maintained well. You need to invest time, effort and money to keep everything in the property in working condition. The property should have suitable facilities for guests and people on vacation.
If you have the time and the inclination to manage the property in such a manner, you can consider becoming an Airbnb host.