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How to start an Airbnb business

Airbnb has become a popular way for the public to advertise accommodation for rent in their homes, offering travellers an alternative to a hotel.

Over 150 million users worldwide opens in new window use the Airbnb website for temporary accommodation – from work-related travel to family holidays – and in various locations from quaint villages, old towns, seaside resorts, or bustling cities.

If you have a vacant living space, turning it into an Airbnb could be a lucrative business endeavour opens in new window.

Whether you host an Airbnb for an additional source of income or as a full-time business venture, our guide will help you discover how to successfully run an Airbnb, attract guests, and build a positive reputation.

Read our guide on reasons to start your own business opens in new window.


Making business finance work for you

Starting a business doesn’t come with a set of instructions.

We know that understanding the many different types of financial product in the marketplace can be difficult.

Our Making business finance work for you guide is designed to help you make an informed choice about accessing the right type of finance for you and your business.

Download your free copy


How does Airbnb work?

Airbnb is a modern-day hotel business model, where people book accommodation anywhere worldwide for a specific timeframe through the Airbnb website or app.

Airbnb can be more economical than many hotels, and guests can choose to stay in various properties, from shared rooms to designer penthouses.

Hosting an Airbnb is straightforward:

  • first, register an account on the Airbnb website or app
  • select the type of property listing you wish to provide, whether it’s a room, an apartment, or an entire house
  • provide your location, the number of guests you can accommodate, the dates available, and the cost of a rental
  • upload a section of pictures and provide detailed descriptions along with any house rules you decide to set
  • after publishing the listing, you can start interacting with guests and manage bookings accordingly.


Letting the right property

It’s a good idea to conduct market research opens in new window to help you understand your target market, familiarise yourself with the competition, and determine if the type of property you have available to let through Airbnb is financially viable.

If you’re buying a new property for Airbnb purposes, consider an area with high demand and a low supply, as this can lead to high rental costs and increase the property’s value over time.

It’s important to consider the target demographic opens in new window to help you determine their needs; for example, if you’re targeting families holidaying with young children, you might look for a property near parks and recreational areas.

Another aspect to consider is your profit margin opens in new window, as you’ll need to calculate if your Airbnb is financially feasible, meaning you’ll need to factor in costs such as:


How much money can you make?

You can estimate how much money you can make on Airbnb by utilising Airbnb’s earnings estimator opens in new window.

It gives you a general prediction based on the following factors:

  • the property type, such as a room, apartment, or a house
  • how many guests are staying at a time
  • the duration it’s rented out.

However, it’s important to note that the season and the level of competition opens in new window can influence the overall costs.

More competitors can drive prices lower, leaving less profit after deducting fees.


Understanding the UK regulations

Before embarking on your Airbnb business, check with your local council to ensure you can legally operate an Airbnb in the area.

Different locations throughout the UK supply different rules and regulations, which Airbnb has listed, so look into Airbnb’s responsible hosting guidelines. opens in new window

If the property is mortgaged opens in new window you will need to ensure that you aren’t breaching the terms of your mortgage.

If there is a mortgage, then the terms of the mortgage need to be carefully checked as some don’t allow for the property to be rented without specific consent from the lender, or for any kind of business to be conducted from the property.

As an Airbnb host in the UK, you will be required to pay income tax opens in new windowand register for and charge VAT opens in new window if your earnings exceed a certain threshold.

Although Airbnb offers Host Liability Insurance opens in new window, hosts must ensure they have appropriate home insurance to protect themselves from legal accountability; let your insurance provider opens in new window know you plan to use your property for short-term rentals, as this could affect your insurance premium.

Some insurance policies might not pay out in the event of damage from guests if you are commercially letting your property, so if in doubt, always check with your insurance provider first.

You must comply with all safety regulations, including fire safety opens in new window, and conduct risk assessments of your property, ensuring it is equipped with necessary safety equipment such as fire extinguishers and smoke alarms, and ensure that any gas and electrical appliances are checked and maintained.

Since you’ll be keeping a record of your guests’ names, addresses and contact numbers, you will need to comply with the General Data Protection Regulation (GDPR) opens in new window Airbnb’s Host Privacy Standards opens in new windowexplains how to do this.


Marketing and optimising the listing

Make your listing stand out from the competition and ensure you attract the ideal guests for your rental by following these tips:


High-quality photos 

Upload high-resolution and true-to-life photos that showcase your property, and draw attention to its best features; ensure you take pictures in good lighting.

Try to upload images of various angles or rooms to show transparency to potential guests.


Detailed and accurate descriptions 

Write a clear and detailed description of your property or room that explains its size, layout, and special features, such as whether it has good Wi-Fi, accessibility, or outdoor spaces.

Highlight anything unique that could appeal to guests, such as a sofa that folds into an extra bed or a balcony that overlooks picturesque sea views.


Competitive pricing

Research similar listings in the area to give you an indication of what rates to set opens in new window.

Consider offering special deals for last-minute bookings or off-peak seasonal discounts opens in new window to stand out.


Attractive listing

It may be a good idea to make your listing stand out by using a catchy headline to get the interest of the type of guests you want to attract.

For example, if you’re hoping to attract couples, you may opt for an engaging headline such as “Romantic retreat with city views”; if you’re aiming for families, you could opt for “Family-friendly home, close to the beach.”

Consider using keywords that guests might use when searching for accommodation in your area, such as ‘beachfront’ or ‘free parking’.

Learn more about SEO keywords with our six ways to boost your website’s SEO opens in new window.


Preparing the property for guests

Before guests arrive, check that all locks, smoke alarms, and carbon monoxide detectors are operating and that fire extinguishers and any previously agreed equipment, such as child safety gates, are provided.

Ensure your Airbnb has basic and practical amenities such as kitchen appliances, utensils, fresh towels, and working lights.

Ensure the Wi-Fi connection is running correctly; it’s a good idea to leave a note with Wi-Fi passwords available and change these regularly.

Depending on the property type and its function, it would be good to make the interior design inviting for your guests by displaying artwork, mirrors, rugs, and plants.

It can be helpful to supply guests with a map of nearby amenities such as supermarkets, beaches, parks, gyms, and restaurants.

Plus, including a welcome note or fresh flowers upon a guest’s arrival can be a nice gesture.


Tips for renting success 

Provide a professional service opens in new window by ensuring guests can contact you in case of an emergency, and if they have any general queries, aim to reply promptly.

As with any hospitality service, always try to be as accommodating as possible and use a polite and empathetic tone when handling guest inquiries or issues.

Ask guests for feedback opens in new window and incentivise them to leave positive reviews on the Airbnb website through referral deals or repeat guest discounts.

Airbnb makes hosts with excellent reviews more visible to guests, so the more positive reviews you have, the more you can establish a positive reputation and attract future bookings.


Note: Applicants that make use of residential properties used for onward letting, subletting, or letting of spare rooms are ineligible for a Start Up Loan.

The exception to this rule are historic residential properties that are now classified as commercial properties, such as Bed & Breakfast businesses.


Learn with Start Up Loans and help get your business off the ground

Thinking of starting a business? Check out our free online courses in partnership with the Open University on being an entrepreneur.

Our free  Learn with Start Up Loans courses opens in new window include:

Plus free courses on finance and accounting, project management, and leadership.


Reference to any organisation, business and event on this page does not constitute an endorsement or recommendation from the British Business Bank or the UK Government. Whilst we make reasonable efforts to keep the information on this page up to date, we do not guarantee or warrant (implied or otherwise) that it is current, accurate or complete. The information is intended for general information purposes only and does not take into account your personal situation, nor does it constitute legal, financial, tax or other professional advice. You should always consider whether the information is applicable to your particular circumstances and, where appropriate, seek professional or specialist advice or support.

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