Airbnb: how it works, how to list your home, tax, costs and how much to charge

Airbnb: how it works, how to list your home, tax, costs and how much to charge

Want to know how Airbnb works? Here's everything you need to know about insurance, tax, local laws and impressing your guests.

lovemoney staff

Saving and Making Money

lovemoney staff
Updated on 5 April 2019

Before you join Airbnb

How are you going to host?

It’s not just about renting out a room anymore. You can co-host with your neighbours, helping them with check-ins, communication and other day-to-day stuff.

Or if you really want to get your guests involved in the local lifestyle, you can host an experience. It can be a single or multi-day adventure themed around baking, fashion, sport and more.  

Source: Airbnb

How much will you rent out?

If you want to stick with hosting in your home, you can choose to rent out a couch, a room, a whole property or anything inbetween. 

Just be aware that a recent change in the law means that whole property rentals in Greater London are capped at 90 days, unless the hosts have permission to rent it out for longer.

How will you be paid?

Airbnb handles the money itself, but it’s up to you how you get paid. Options include PayPal, direct deposit and international money wire.

Do you have the time to manage your bookings?

If you don’t have the time to juggle bookings, it doesn’t mean you have to lose out.

Hostmaker will take care of the hard graft for you, giving your home a photo-friendly makeover, approving guests and communicating with them and providing a concierge service.

Less glamorous jobs like maintenance support and cleaning are covered too. 

Tell your home insurer 

It’s not like you can just start inviting paid overnight guests into your home! You’ll need to have a word with your home insurer first. If you have to make a claim and your insurer doesn't know you're an Airbnb host, it might not pay on pay out based on the grounds of 'non-disclosure'. 

Standard policies may only cover you and your family but you can change to Home Protect or Discount Insurance, which both cover Airbnb. Admiral has a home-sharing insurance policy, but it's not open to hosts who rent their home.  

Your Host Guarantee doesn't cover everything

Under the Host Guarantee you’ll be covered for up to £600,000 of damages. However, it won’t cover valuables like jewellery, art or cash. It doesn’t cover wear and tear either.

Stay on the right side of the law

It’s health and safety time. Make sure you provide these essentials:

  • First aid kit
  • A clearly marked fire escape route
  • Proper ventilation and temperature control
  • Carbon monoxide detector (if you have gas appliances)

It’s also vital that you do a fire safety risk assessment and provide your guests with details of emergency services and directions to the nearest hospital. Leave an emergency contact for yourself and a trusted back-up contact just in case something goes wrong.

People from Northern Ireland might need a permit

As part of the Tourism (Northern Ireland) Order 1992, residents in Northern Ireland aren’t allowed to provide, or even offer to provide, overnight accommodation to tourists. You must have a permit from Tourism NI if you want to host. 

Tax, tax, tax!

Don't worry, it's good news! Since April 2017, people who rent out their home on Airbnb will get their first £1,000 in earnings tax-free.

What’s more, Osborne announced an increase in tax allowance on the Government’s Rent a Room scheme, so people who let out their home, including certain Airbnb hosts, will get their first £7,500 tax-free.

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Placing your listing

It’s all in the sell

This is where the hosting really starts, so make it count.

Be as honest about your listing as you can. Guests are more likely to leave a negative review if the property doesn’t live up to expectations.

Give a description of what’s in the house (number of rooms, size of the kitchen, etc) and local amenities like the nearest supermarket, currency exchange or train station.

Include any ‘quirks’ around the place so guests will really know what they’re getting. 

Pricing is one of the key details to sort out early on. It will be based on the size of your house, the area you live in and how close you are to local services.

Have a look at other hosts in your area to get an idea of what they’re charging, but bear in mind that you’ll be up against more experienced hosts with potentially great ratings, so take that into account when you’re pricing.

Time of year is important too – it’s obviously wise to charge a bit more during busy times like Christmas, summer and any big festivals near you.

Lower your price during quieter times to bring in more business.

Include helpful details

Cater for every guest’s needs in the ad – even if you feel it’s unnecessary, it doesn’t hurt. Have a think about who might stay with you. Mention if you have baby changing facilities and a high chair for stressed-out parents or safe bike storage for a knackered cyclist.

Make those pictures dazzle!

Ensure your photos are plentiful, light, free of clutter and include interesting features in your home. Photos of the garden or outside the property will add extra points.


Source: Airbnb

Or get someone else to do it

Airbnb provides a service that takes photographs of your digs for you, and in some cases it’s even free. This all depends on whether there’s a photographer available in your area when you request.

Just be aware that the copyright of the photos will belong to Airbnb and it reserves the right to use them for advertising and publicity.

Sort out your cancellation policy

There are three standardised cancellation policies on Airbnb: flexible, moderate and strict.

Guests will clearly be able to see the host’s cancellation policy on every listing. A host will also be able to see how many cancellations a guest has made in the past 12 months when they submit a request to book.

Other policies include Super Strict 30 Day, Super Strict 60 Day (both available by invitation only) and a Long Term policy for stays of 28 days or more.

Before your guests arrive

Get to know them 

Have a look at potential guest’s profile before you agree to host them.

Airbnb allows hosts to ask for a profile picture, trip description and verified phone number before they allow them to stay. Just don’t ask for an uncomfortable and downright creepy amount of personal information. It won’t bode well.

Hosts who are a bit unsure can use the Instant Book facility and only accept guests who have been recommended by other hosts.

Make sure communal areas are clean

This is a given but some still sadly miss the mark. The welcome area, hallway, bathrooms, kitchen and dining room should all be clean when a new guest arrives.

Respond to their enquiries quickly

Get back to room requests quickly, particularly if your guest is in a tight spot. It’s best for both of you to get bookings confirmed as soon as possible.

It also helps to send them an email around a week before they’re due to arrive with information on how to get to your house from the airport or train station, some interesting local attractions and a list of restaurants and cafés in the area.

Personalising the information that you give them based on what they’ve shared in their profile will go down well.

Use this opportunity to mention anything about the house that isn’t in your ad, like having a lot of stairs or no bath.

Include an information sheet and travel brochures

Having an information sheet in the room is a handy reference point for reminding guests where things are, how to use certain gadgets and a rundown of the house rules. Try to limit it to one side of A4 if you can.

Leave out local travel brochures, restauarant menus, train and bus timetables, which your guests may find useful. 

How are you going handle the key handover?

If you’re not going to be around when your guests arrive, perhaps you could leave the key with a trusted friend or neighbour who can meet your guests outside your house.

A keyless lock is a good idea if you’re not going to be available very often. It’s just a case of sending a code to the person staying – and there's no faff over lost keys. Bonus!

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Keeping up with the competition

First impressions

Trite though it is, first impressions really do make a difference. Get them a cup of tea or coffee (or possibly a beer, depending on how stressful their journey was!) when they arrive.

A small gift in their room, particularly something local, will get their trip off to a good start.

The key is to find the balance between chatting and giving your guests space. Base your judgment on their body language as well as what they say.

Source: Airbnb

Offer help and advice

Your guests may be tired and jetlagged and in need of some help organising day trips. Help them book taxis, tickets and restaurant reservations if they’re unfamiliar with the area or struggle speaking English.

After the stay

Rate them too

It’s not just you that gets rated here. You can comment on your overall experience with the guest. They don’t get the star rating that hosts do, but it provides them with useful feedback for future stays.

Not working? Consider the alternatives

If you’ve given Airbnb a fair bash and aren’t happy with it, you could try one of the alternatives.

Homestay is as it sounds. You’ll always stay in someone’s home so you’ll get to experience a place like a local. Accommodation is a little more limited than Airbnb though so you may not have as much choice of stay in your dream location.

There’s other options like WimduHomeAway, Roomarama and FlipKey to explore too.

Guests - compare travel insurance policies for the UK and abroad

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