Managing an Airbnb is a much trickier business than it may seem at first glance. The industry is steadily becoming more and more competitive, and the pressure to deliver top-quality service is growing higher. Aspiring entrepreneurs and hosts should be ready for all the challenges that come with managing an Airbnb.
In most cases, it will be enough to use the research that was already performed by other people. For example, launching an Airbnb in Edmonton is explained in detail in this article: https://hearthomes.ca/how-to-start-an-airbnb-business-in-edmonton/.
Understanding the Local Market
The first preparational step of any entrepreneur in the short-term rental industry is related to learning everything about the market. Most importantly, it involves understanding the target audience. An aspiring Airbnb manager should find out why people are visiting the city, who they are, and which locations are they more likely to choose and why.
Then, it is reasonable to analyze the competition. The future manager should discover rates in different parts of the city, and learn about occupation rates and the revenues of existing Airbnbs in the area. It is also vital to take into account the seasonal effect, as it might have a significant effect on the future enterprise.
Legal and Regulatory Aspects
Of course, Airbnbs cannot operate illegally, so the aspiring manager should study local regulations for short-term rental and hospitality industries. The regulations may vary dramatically between different regions, so it is vital to learn about the specific area of operation.
The list may include a variety of laws for the future enterprise to follow. First of all, rentals might not be allowed in specific areas of the city. There also might be limits to the maximum nights of operation throughout the year. Advertising the rental is also rather tricky, as some cities will require the hosts to obtain a license and display its number in all listings on Airbnb and other platforms.
Lastly, the hosts should learn everything about paying taxes. There might be multiple taxes a rental owner has to pay, so it is important to have this sorted out and planned for in advance. The good news is that there exist articles explaining the legal aspects of managing an Airbnb in almost every major city, making this task a lot easier for aspiring hosts.
Deciding on the type of property
Selecting property is the most vital choice an entrepreneur has to make in the entire operation. It will have a massive impact on how well the business performs, so this topic should be well-researched.
The first thing to do here is to select a location. As mentioned earlier, it has to match the city’s legislation in terms of operational permits. It is crucial to have the target audience defined at this point in order to find the option that would fit the potential guests the most.
The financial aspect is also important here, and that’s where the analysis mentioned before comes into play. Discovering real estate prices for the selected types of property in the selected parts of the city is vital to make financial projections for the business.
Managing Your Airbnb
When all the preparations are made and the enterprise is launched, there are not so many difficult decisions to be made. However, the job itself is still fairly tricky, as it is very important to get positive reviews from the first guests. It implies the service has to be top-notch from day one and the level of quality should remain consistently high.
Managing an Airbnb involves a wide variety of tasks that have to be performed regularly in order for the business to become successful. The list includes:
- creating the listing;
- managing the booking calendar;
- replying to potential guests;
- meeting guests;
- staying in contact with guests;
- cleaning the property after the guests check out;
- ordering maintenance services when needed.
The good news is that most of these tasks can be delegated away. Most web-interactions can be performed via automation software, and for most service-related tasks, it is possible to hire staff once the business is sustainable.
Challenges and Solutions
There are a plethora of challenges that may arise in the process of managing an Airbnb. To be successful, the entrepreneur should be always ready to solve such challenges on the spot, as it is impossible to account for everything in advance.
Learn more about Airbnb property management in Edmonton here.
The challenges can be split into multiple categories:
- guest relations
- financial challenges
- technical issues
- legal issues.
Guest relations are perhaps the most difficult aspect of managing the business, as it is vital to treat every customer with an individual approach. The financial challenges revolve around keeping the enterprise viable and sustainable mainly through regularly adjusting the rates according to constantly-changing market conditions.
With technological and legal challenges, the situation is a bit more straightforward. The manager should always be ready to fix or replace broken appliances or solve other problems with the property. For this, and for any potential legal issues, it is enough for the host to have the right contacts on tap.
Growing Your Airbnb Business
Once the business becomes stable, it is only natural for a manager to want to expand the operation. Naturally, it is done through opening more Airbnbs in the city and managing them all at once. To do so, the host is required to minimize their personal involvement in managing the first rental by delegating most responsibilities to other people or automation software.
Summing up, becoming a successful Airbnb manager is achievable but tricky. There are many obstacles that might stand in the way, but a well-prepared host can overcome them and succeed. The rule of thumb here is to put in as much effort as possible, as the industry is very competitive and all other hosts are constantly trying to offer a better service. The good news is that the topic is already well-researched, and there is a ton of material available for studying.