9 Things to Know Before Renting out Your Apartment on Airbnb

Jul 07, 2022

Commercial Insurance

9 Things to Know Before Renting out Your Apartment on Airbnb

Renting out your apartment on Airbnb is a great way to earn additional income while you are away from home. Yet, with the game-changing business model, there are a few things you need to know before choosing to do so.

Here are nine ways to get the most out of renting your apartment on Airbnb:

  1. Determine Your Goals and Commitment Levels

    Ask yourself some crucial questions. Are you signing up for occasional extra bucks, or do you want a steady stream of income from a full-time Airbnb investment? Who will take care of frozen plumbing lines and other maintenance emergencies? Also, consider the occasional need for repairs after damage caused by guests. Do you think all these efforts are worth your time?

  2. Maintain Transparency with Prospective Guests

    Improve your ratings with guests by being honest about the features and comforts available. If you don’t offer certain amenities that guests expect, be truthful about it. Don’t lie about Wi-Fi, parking, laundry facilities, or any potential disturbances in the neighborhood, such as noise. 

  3. Research Local Regulations 

    In some cities or towns, renting your apartment on Airbnb or similar platforms may be illegal. You should research local ordinances to avoid violating the law and paying hefty fines for it. 

  4. Remember Taxes

    Your Airbnb home is a rental property that generates income for you. Make sure to estimate the taxes you may have to pay and compare that with the income generated and operating expenses.

  5. Keep Your Calendar Up-to-date

    Review your calendar and update it accordingly before putting your home on Airbnb. If you are using the house on a day you haven’t marked it as unavailable, it may inconvenience you and prospective guests. To avoid this frustration, always mark your calendar with definite open dates. Reducing your guest declines can boost your visibility on Airbnb search results.   

  6. Account for Operating Costs

    You’ll be spending on amenities and other essentials on an ongoing basis to successfully run an Airbnb business. Plan for these expenses before listing your property on the platform. Potential costs include regular cleaning, water, and power bills, and kitchen, laundry, and toilet supplies. 

  7. Provide an Information Binder for Guests

    Make it easier for guests to get started on the local scene with up-to-date entertainment and restaurant guides. Your Airbnb guest information binder should include the Wi-Fi password, phone number or email, and ground rules, such as pet rules. Also, consider providing quick TV or coffee maker guides to simplify the guest experience.

  8. Optimize the Price

    You should set the right price to optimize occupancy and rental income. Start by researching the rates charged by hotels and other rental properties in the neighborhood. Airbnb rentals in busy towns or cities usually fetch a higher rent than apartments outside town without quick access to amenities.  

  9. Have Proper Insurance

    Your homeowner insurance policy probably doesn’t cover damage that guests may cause to your Airbnb home. While Airbnb provides some coverage, you may need more protection for maximum peace of mind. Consider closing any coverage gaps before listing your property on the platform.

These are some of the issues to keep in mind before renting out your apartment on Airbnb. To protect yourself from financial loss as a “landlord,” make sure you have sufficient insurance protection. The experts at Riverbend Insurance can help you find personalized apartment building owners insurance that suits your specific needs and objectives.

Frequently Asked Questions

Is it worth it to rent out your apartment on Airbnb?

Whether it's worth it to rent out your apartment on Airbnb depends on various factors, such as the location of your apartment, the demand for short-term rentals in your area, and the cost of your rent or mortgage. For example, renting out your apartment on Airbnb may be profitable if you live in a popular tourist destination or an area with high demand for short-term rentals.

What pays more renting or Airbnb?

Renting out your apartment on Airbnb can earn more money in the short term, especially during peak tourist seasons, but it may also be less consistent income compared to renting out your apartment on a long-term lease. Renting on a long-term lease provides a stable income stream, but the rental income may be lower than what you could earn on Airbnb.

Do I need different insurance for Airbnb?

If you plan to rent out your apartment on Airbnb, you may need to purchase different insurance coverage than you currently have. Many traditional homeowner's insurance policies do not cover short-term rentals. Some may even exclude coverage if you use your property for commercial purposes, like renting it out on Airbnb. Therefore, it's essential to check with your insurance provider to ensure that you have adequate coverage for short-term rentals.

Contact us to know more about your insurance needs!