What will it take to get your short-term business up and running? Follow the six steps below to move your business forward and start benefiting from your short-term rental.
Every owner wants to know how profitable their property could be and whether the income from a short-term rental could offset ownership costs.
To determine the answer, multiply the average nightly rate by the number of nights you intend to have booked each year. (Search Airbnb to see what the going rate is for comparable properties in your area).
After you determine the annual revenue potential, subtract, annual insurance and property taxes, mortgage, utilities, management costs, and other recurring expenses. Include up-front costs to prepare your rental for use in the first year’s expenses only. The remaining amount is roughly your annual income from the rental.
Try a calculator like this to explore the outcomes.
Each local and state government has specific requirements for short-term rentals. Research requirements for your area to ensure you’re in compliance with local laws and regulations.
Contact Your City or County
Contact your city and county to understand current taxes, licensing requirements, and permit regulations that may apply for short-term rentals in your area. You’ll find additional guidance on Airbnb’s Responsible Hosting Guidelines page. Current regulations for Denver indicate only a primary residence can be used as a short term rental and stays must be less than 30 days. You can generally complete city requirements online. See the article: What regulations apply to my city? for ideas on what to research.
Review Homeowners Associations (HOAs) Agreements
Review the Covenants, Conditions and Restrictions (CC&Rs) in your HOA agreement, or contact the president of your HOA to understand short term rental regulations.
Airbnb offers you the Host Guarantee, but this does not take the place of homeowners or renters insurance. Review your renters or homeowners policy with your insurance carrier to see if you have adequate coverage. When discussing insurance options with an insurance agent or broker, disclose that your home will be used for short-term rentals to ensure adequate protection.
Contact your city, county, and state governing agencies to understand the tax requirements for your area. Also, consult your Certified Public Accountants (CPA) for tax advice and support. General steps in handling short-term-rental taxes include:
- Register your property (city, county and state)
- If required, apply for a business license
- File tax returns monthly and/or quarterly as set by your tax jurisdiction
- Remit tax payments to the city, county and/or state
Consider using a company like Avalara to automate paying short term rental taxes and make your life a little easier.
By the time guests look at your listing, they have already decided on their rental location–you want to impress them with the home setup and amenities. Renters are most concerned about the space being clean and comfortable–once that is clear from the listing reviews, they’ll look for other features. To make your home stand out among the options, consider these key points:
- Imagine your ideal renters and anticipate their needs (families, couples, professionals)
- Invest in durable furnishings, like vinyl floors and furniture that is easy to clean
- Ensure the home feels exceptionally clean & bright in photos and when guests arrive
- Curate dining and living room spaces to accommodate your max number of guests
- Invest in comfortable mattresses, darkening blinds, and extras to support good sleep
- Outfit the kitchen with all the tools and appliances guests may need to prepare meals
- Leave space for guests to unpack and settle in: empty drawers, hooks, closets
- Find a “party trick” to set the property apart from the competition: a game room, peaceful patio, indoor movie theater, bikes/snowshoes for use, record player, cocktail lounge, fabulous back yard, etc.
- Set up an entertainment system with a high-quality HD TV and streaming services
Preparing a house for short term rentals may require renovation and interior design consultations. One way to beat the competition is by having a stunning interior that photographs well (followed by raving reviews from past guests who loved their stay in your lovely space). This doesn’t necessarily mean high-end finishes, but it must be clean, durable, and attractive.
Consider hiring a general contractor to replace carpet with vinyl floors, paint walls, and fix any pending issues. Hire an interior designer to consult on durable furnishings and decor. As a rule, the house should be in working order (considered “move in ready”) before your listing goes live.
Contact Superhost Rental Management
If your property is already a clean, renter-ready space, you may be just weeks away from listing it as a short-term rental. Consider hiring a short-term rental management company to help you get started, maximize revenue, keep operations running smoothly, and curate a five-star guest experience. Superhost Rental Management offers services to handle the following:
- Rental setup services with options for levels of support and pricing
- Marketing: professional photography, a competitive listing, & pricing optimization
- Ongoing home management services: cleaning, landscaping, & timely maintenance
- Guest experience and services, including all inquiries related to the property
- Guest review & SEO listing strategy, designed to get your property to the top in searches
- Regular property inspections with update recommendations submitted to the owner
- Supply purchase and re-stock for continual home operations
Contact Superhost Rental Management for a free startup supplies checklist and to explore our services. We are ready to support you, so you can enjoy the benefits of your investment without worrying about the details.