How to Start an Airbnb Business

Starting an Airbnb business can be a great way to make money, whether you are a seasoned property investor or just getting started. Before starting, you should be aware of some important legal and financial considerations—this blog will cover this, plus other essential information and ways of maximising your Airbnb income.

Table of Contents

How to Get Started on Airbnb
How Much Does it Cost to Start an Airbnb?
Airbnb Regulations in the UK
Declaring Airbnb Income
What is the 90-day Rule on Airbnb?
Tips For Maximising Your Earnings on Airbnb

How to Get Started on Airbnb

First, look at other Airbnbs in your area to see the average price and market demand. Some places will be more sought after than others and you can charge more based on this. Airbnb has a helpful tool that gives you an idea of your earning potential based on similar properties in the area. Airbnb will also match you with a Superhost in the same area who can offer advice.

Consider what kind of customers you will get. Are they visiting the area for work, a holiday, or something else? Holidaymakers will have different expectations of an Airbnb stay than those who are visiting for work so tailor your Airbnb property accordingly. Holiday Airbnb lets that have luxury amenities like hot tubs will command higher prices, so prepare for more upfront investment for this kind of property.

There are several legal considerations to be aware of – check the section below on Airbnb regulations to find out more.

How Much Does it Cost to Start an Airbnb?

Much like any short-term rental property, there can be some upfront costs involved when setting up an Airbnb. Remember to include the existing mortgage on the property as part of your outgoings. You may need to do certain renovations to make sure the property can be legally offered as a short-term let. The property should be compliant with all health and safety regulations, including up-to-date EICR and gas safety certificates. You are required by law to carry out a fire risk assessment on the property and take all recommended actions. You may need to add smoke and carbon monoxide alarms, fire extinguishers and fire blankets to the property. If you need to obtain a licence or planning permission from your local council to offer the property as a short-term let, this may incur a fee as well.

Some property owners undertake refurbishment or renovations to make the property more appealing to potential customers. This can boost your yield when renting out the property but will increase the upfront costs.

Think about the day-to-day running of the Airbnb. Will you be greeting guests yourself, or leaving access instructions? Who is going to clean and inspect the property after guests leave? What if any repairs are needed? Dealing with these issues yourself is cheaper, but can take up a lot of your time. Some hosts will use a property management company to handle it, but this will cut into the profits.

Airbnb does offer its own Aircover insurance, but this may not be adequate for every potential issue. Look into specialist short-term letting home insurance to make sure you are properly covered.

Airbnb Regulations in the UK

Not every property is suitable for renting on Airbnb. Some mortgages do not allow the property to be offered for short-term lets, so consult the mortgage contract to make sure this is not the case.

Do I need to Own the Property for Airbnb?

Not necessarily, although offering a property on Airbnb or other platforms may violate the letting agreement. You will need permission from the owner or your landlord to offer the space on Airbnb, otherwise this could constitute illegal subletting. For leasehold properties, you may need the leaseholder’s permission.

Do I Need Council Permission or a License to run an Airbnb?

This depends on the local authority in the area. As some have stricter planning laws than others. In some areas like London and Blackpool, there are term limits for Airbnb properties – they cannot be let for more than 90 days per year. Some areas require planning permission for Airbnb and other short-term lets. Scotland requires all Airbnb hosts to apply for a short-term let licence and other regions of the UK have this requirement too. Check with your local authority before offering your property on Airbnb or other short-term letting platforms.

Insurance regulations can apply in some areas – in Scotland, Airbnb hosts are required to take out public liability insurance. If you already have household insurance, check with your provider that they will cover any claims made relating to short-term lets.

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Declaring Airbnb Income

You can earn up to £1000 a year without declaring it for tax purposes. If you are renting a room in your own house, you can earn up to £7,500 without paying tax on it under the Rent a Room scheme. When renting out another property and earning more than £1000, you will need to declare this to HMRC and potentially pay income tax. If you host a property for 140 days or more per year, you could be subject to business rates. Your accountant can advise you on your tax liabilities and what expenses you can offset against this. Airbnb has also created a tax guide that covers more information.

What is the 90-day Rule on Airbnb?

In London and some other locations in the UK, you can only offer an Airbnb for 90 days of the year. Check with your local authority to find out if this applies to your area.

Tips For Maximising Your Earnings on Airbnb

Here are some ways you can make your property more attractive to potential Airbnb guests, avoiding void periods and commanding a higher price.

Invest in quality furniture and decor that gives the space a warm, inviting feel.
Provide a range of amenities that guests have come to expect, such as high-end bed linens and towels, toiletries, kitchen basics and a good coffee maker.
Provide good-quality photos of every available room – consider hiring a professional photographer to show the space in its best light.
Respond to all queries and messages promptly and professionally.
Complete your Airbnb host profile and account, reassuring guests that you are responsible and trustworthy.
Ensure the property is thoroughly cleaned after every guest and maintained to a high standard.

By following this advice, you can set up an Airbnb business that is lucrative and rewarding. For more expert property investment advice, check out one of Assets For Life’s FREE property events – book now or find out more by clicking the link below.