Don’t Stay for Long: An Essential Guide for New Airbnb Hosts

Questions to Ask Yourself Before You Start Your Airbnb Journey

Before you get too attached to the idea of using your home as an Airbnb, the very first question you need to ask – and thoroughly answer – is: 

Is it legal to short-term rent my home?  

• Confirm that hosting short-term renters is legal in your locale; some cities/states have begun to ban platforms like Airbnb and Vrbo.  

The next question to ask yourself: Am I allowed to rent my home as an Airbnb? 

• If you don’t own the property, check with your landlord to ensure that re-renting your place won’t violate the terms of your lease.  

• If you’re in an HOA or other home-regulation organization, confirm there are no restrictions on renting out your property to short-term guests. 

• Verify that you have the correct insurance policy to cover a business operation like a short-term rental. Contact a trusted insurance agent to walk you through your current policy to outline any exclusions that would void your coverage in case of a claim resulting from renting your property for the short term. Proper Insurance offers free coverage comparisons by the most educated short-term rental insurance experts in the industry.  

The next question to ask yourself is: Is this something I really want to deal with?  

• Consider the logistics of becoming an Airbnb host. Do you want people to be in your space? Do you want to deal with regular deep cleanings, putting away your personal items all the time – the “To-Do” list to prepare for each new guest? The potential for guest-caused damage to your things? 

Research is Essential to Becoming a Great Airbnb Host 

Provided you’ve confirmed you’re in the clear to short-term rent your living space or vacation home, it’s time to iron out some important details. It’s essential to complete this step before you get to the more enjoyable parts of prepping your space to host Airbnb guests. You’ve got to figure out:  

• Laws and regulations on short-term renting in your locale regarding number of guests, length of stay, etc. 

• Market saturation in terms of how many Airbnb’s are available in your area. 

• Types, sizes and styles of the Airbnb’s that stay booked. 

• Typical pricing for a night’s stay in the direct vicinity. 

Understanding and synthesizing these factors will give you a better idea of what becoming a short-term rental host can get you in terms of possible income, competition, market saturation, etc. 

Decide the Parameters of Your Airbnb Listing 

When you get to listing your Airbnb, you’ll need to have the following details decided upon in order to make the setup process run smoothly. Consider: 

• What’s the size of your short-term rental space? Bedrooms? Bathrooms? How many guests? 

• Will you allow pets? What kind(s) and under what circumstances? 

• What length of stay is ideal? Be careful on this one; there’s an ephemeral line between a guest and a tenant. 

• What’s your wi-fi and streaming situation like? Guests will want the comfort and easy access to internet and media that they have at home. 

• Are you going to offer amenities for your guests like bicycles, kayaks, hot tub, pools, etc.? 

Part of being a great Airbnb host will be clear communication and guidelines for your guests. It helps everyone start off from the outset of what’s allowed/expected/provided.

Determine the Cost: Benefit Ratio & Pricing for Your STR 

It’s time to talk about money. Airbnb hosts looking to enter the market are often drawn in by the big income numbers of the short-term rental phenomenon. That income number relies on a maxed-out booking schedule and the hopeful placement of your home among Airbnb’s search algorithms. It also often comes without any context for the expenses of running an Airbnb. 

Financial factors you cannot overlook: 

• You will have regular expenses for restocking general supplies and amenities. 

• There will come a time when you need out-of-pocket money on-hand for repairs. 

• You will either need to beef up your Homeowner or Landlord insurance policy or, better, replace your current insurance with short-term rental insurance that covers your property, liability and revenue like the comprehensive policy offered by Proper Insurance. 

• Consider additional expenses associated with preparing yourself to be a repeat host. For instance, how many new sets of bed linens will you need? Pillows? Should you replace that old futon with a newer sectional before you have guests stay?  

• Consider cleaning supplies, laundry expenses (power, water, detergent, time), etc. 

• Airbnb charges fees and takes a percentage of your earnings from each stay. 

Make an Excel table of every expense/potential expense you have identified. That way, when you decide what your guests’ expenses will be, it will be based on an educated inference. You’ll have to determine: 

• Nightly rate. Look back at that research you did on ratesd of local competition. 

• Price Variance. Consider changing rates based on circumstances. For instance, many hosts do weekday vs weekend pricing and/or offer discounts. 

• Fees. Will you charge guests a cleaning fee or have it built into the nightly rate? If you decided to allow pets, will you charge a fee? A deposit? Will it be refundable post-stay? 

• Security deposit. Some hosts prefer to require a security deposit in case of property damage, the inconvenience of cancellation, but it’s completely up to you. Although better and more modern approach would be a guest-caused damage waiver like the one offered by Waivo as it does not involve the guest in the reimbursement process and can even be an additional income source.  

• Cancellations. What will your policy be? Hosts usually choose to have a deadline for no-fee cancellation, after which guests are charged for a partial or full stay for cancelling at the last minute. 

Then it’s time to do the math and figure out how often you’ll need to have short-term renters in order to make your income goal. Later, this will make setting up the calendar on your listing simple.

Keep Yourself Safe No Matter Who is in Your House 

There is one expense that will make or break your Airbnb hosting experience. When you have strangers staying in your house, condo, or apartment there are too many unknowns to leave yourself open for liability.  

Yes, your guest may have a 5-star rating, super reviews and 43 stays, but that’s not a 100% guarantee everything will go well at their stay with you or at your property – purposeful or accidental. Having the right insurance for short-term rentals like Airbnb and Vrbo is absolutely key here. 

• What’s the problem with your Homeowners insurance policy? It covers all your belongings and liability if someone gets hurt on your property, right?  

• Not exactly. Many Homeowner policies exclude coverage for business activity, like a short-term rental with paying guests. This means that in the event of a claim relating to your short-term rental business or not, your Homeowners insurance coverage could be completely void. 

• What if you already rent your property long-term and are switching to a short-term rental – will Landlord/Dwelling insurance will work? 

• There are several obvious gaps in Landlord policies when used to insure a short-term rental property including lack of off-premises liability, intentional damage/theft by a guest, lack of adequate income protection, and more.  

• Doesn’t Airbnb’s Aircover offer coverage specific to short-term rentals? Why not just use that? 

• Aircover looks like the perfect coverage solution to the STR insurance problem because Airbnb wants you to use their booking platform – but it’s not. Reviews alone will tell you that Aircover has real problems and further more, Airbnb explictly states that Aircover is not insurance. Plus, all you have done is relegated yourself to dealing with Airbnb whenever you have a claim in hopes they respond to your submission. When you have a comprehensive short-term rental insurance policy with your name on it, you can be confident in a response to your claim.  

Make no mistake: if you Airbnb host long enough, you will eventually have a claim from accidents or damages. You should make sure you have an Airbnb host protection plan so you’re covered from the fallout – both loss and liability. 

Your Airbnb venture may seem like an informal leap into entrepreneurship, sure, but it is a business.  

You need business insurance to properly protect yourself from risks like liability for accidents on-and-off premises and lost revenue during a covered loss. You’ll need business insurance for short-term rental properties to achieve that.  

Now you have three insurance policies to deal with, each with their own coverage gaps, exclusion clauses, overlaps, etc. Your Homeowners insurance may offer a homesharing rider, but it will have serious limitations. And exclusion clauses can completely void your policy the moment you list your property on a booking platform.

Airbnb Host Coverage from Proper Insurance: Three Policies in One 

Insurance is all about the details; underwriters want predictability, but short-term renting is anything but predictable 

Proper offers a Commercial Homeowners insurance plan specifically for Airbnb hosts that integrates Homeowner, Landlord and Business insurance, achieving comprehensive coverage without all the mess and extra expense. 

For instance, some blind spots in our competitors’ policies include: 

• Intentional acts by a guest, like damage and theft 

• Proper’s insurance plan protects Airbnb hosts from any acts of theft or vandalism by a guest

• Liability exclusions such as liquor, animals/pets, amenities 

• Proper adds coverages back into our unique commercial liability policy built for hosts. 

• Personal liability only, which excludes business pursuits  

• Proper’s coverage for Airbnb hosts covers personal and commercial liability 

• No property or liability coverage for bed bugs/fleas  

• Proper’s short-term rental insurance offers a one-of-kind coverage for bed bugs and fleas  

There’s another key aspect to our Airbnb host insurance coverage that’s unique from other insurers: property replacement. Often, insurers will look at, say, a kitchen fire and value appliances and fixtures at its original price at the time minus any depreciation of time/use. But you can’t replace that exact kitchen with a check for its original price minus depreciation.

Proper’s Airbnb insurance covers the current price of a new item equivalent to the one that was stolen, damaged or ruined as the result of a guest’s stay.

The Proper Insurance policy is designed specifically for short-term rentals and vacation rentals. You get a transparent, robust policy that covers you as a property owner, a resident and a business owner while completely replacing your current Homeowners or Landlord policy.

Keep Guests & Property Safe During Short-Term Stays 

Even though you’re covered by your Proper policy, you should still minimize the risk of bad things happening while guests are staying at your Airbnb. Regardless of how top-notch your Airbnb host insurance is, the consequences of things like emergencies or accidents are inconvenient, to say the least.

Set your guests and your home up for a safe stay: 

• Provide a safety guide with all the house information, including how to operate appliances and electronics, what activities or uses of the property are prohibited during their stay, where the fuse box is, the location of emergency shutoff valves, etc.

• Provide a list of local emergency numbers, including more than one way to get ahold of you, and at least one other person who can get information to you quickly, should your guests be unable to reach you.

• Invest in a quality security system and locks. If you decide to have video monitoring in place, limit it to a front door camera and make sure guests are clearly notified. Ensure any access or alarm codes are clearly displayed and easy to find.

• Perform your own regular safety checks for things like rickety furniture, sharp corners, damaged flooring, water leaks, mold – anything that can pose a risk of illness or injury should be remedied before the next guest arrives.

• Have regular property inspections and pest eradications done.

The less dangerous incidents you have at your Airbnb will ensure your host ratings stay high. And the more secure your guests feel, the more likely they are to give you a good review and maybe even stay with you again.

Decide What Kind of Airbnb Host You Want to Be 

You’re in the home stretch now. While becoming an Airbnb host is an organic process that will change as you gain experience, it’s a good idea to have a jumping off point for what kind of host you want to be. Consider: 

Communication  

Will you be a hands-on or hands-off host? Some hosts like to keep communication to a minimum – important moments like check-in and check-out, and any issues/requests from the guest(s). Others like to interact with their guests in-person and even help them with restaurant and activity suggestions. 

Access  

How will you deal with getting your guests access to your Airbnb? Will they pick the keys up from somewhere? Will you leave a key where they can access it when they arrive? Some hosts may choose to put the keys in a lock box and give guests the code or even install a smart lock on the door. That way, the host can change the code after each visit. 

Responsiveness 

Regardless of what level of hands-on you want to be, any good host should be extremely responsive during a guests’ stay, emergency or not. Whether they can’t figure out the HDMI cord or just sliced their hand open on an avocado, you should be on-call 24/7. 

You’re Ready to List Your STR Property on the Platform 

Once you’ve got all your ducks in a row – but especially the short-term rental insurance policy – it’s finally time to do the fun stuff: list and prepare your soon-to-be Airbnb! It’s simple; an Airbnb listing is a hybrid of a real estate listing and a dating profile. You should: 

• Deep clean everything, change linens and towels, put everything away, etc. 

• Take some great pictures, making sure to get each room, including the kitchen and bathroom(s). 

• Write a description that’s detailed enough to tell guests about the place and the area, but not so long that it’s cumbersome to read. 

• List your property on Airbnb, applying all the details you nailed down earlier, like calendar, pricing, fees, policies, etc.

Once you get your first reservation request, set your place up with everything you’d expect from a high-end hotel, making sure to have extra staples like toilet paper, toothbrushes, paper towels, etc. Always keep a fully-stocked kitchen and bathroom.

Are you feeling like becoming an Airbnb host is the right choice for you? It’s a great opportunity to create a steady source of income, if you do it right. Call Proper Insurance to inquire about our STR insurance plans for Airbnb, Vrbo, and vacation rentals.