In this article, I’m sharing with you eight steps that I took to start my Airbnb business. These eight Airbnb steps can be implemented by anyone. This is not theory, they are the actual 8 steps I took to launch my Airbnb business.
Anybody that wants to start an Airbnb business can benefit from these tips. I’m sharing them through my experience. You guys want the details you want to know exactly how to get from point A to point B, and that’s why I’m going to share them with you. There are 8 simple steps.
Each one of them I went through myself and you guys can take action on these steps. I run a rent-to-arbitrage house from Lexington, Kentucky.
Plan Your Airbnb Business
Let’s say that you just have this brilliant idea that’s kind of like the first step that led me into taking action, was having the idea. Hearing that an Airbnb business had worked for other people, having that conviction that the Airbnb business model is effective. Once you have that the next step for you is to find out what your target market is, what it’s going to cost you, how long will it take you to recoup your profits or make your money back, how long will it take you to break-even? Get out your calculator, be conservative and I think you will be impressed with the potential profits your Airbnb business can provide you.
So, have all that under consideration, I wouldn’t necessarily say go write a 2-page business plan, just have an idea of what the business model is going to look like in your situation and structure that appropriately for whatever market you’re in.
Create Legal Entity (LLC)
Once you’ve done that the next step and a very wise step would be to go create a legal entity. Now, this is not necessary. I had a client comment before I said that you don’t need an LLC which in all honesty you do not need one, but it is highly recommended simply because you’re protecting yourself from the guests from the people you have coming into your home.
That’s very wise to set up a legal entity, and that way that legal entity will give you access to a business bank account, to a business profile which is essentially what you want to build. You want to build that right from the start. So, go create an LLC or some legal entity of some sort, and once you’ve done that, you are now ready to move on to the next step, and that is registered for taxes.
Register for Taxes (EIN)
You have to file for an EIN number. So, once you have your business LLC or whatever you like, once you’ve created that entity, you’re able to register it with the IRS and you’re able to create an employer identification number or an EIN number. This is all stuff that I’ve done and I did it on my own, it took me probably two hours to figure all this stuff out.
For those of you guys out there paying thousands of dollars to get this stuff set up, you guys are doing it wrong, and I’ll teach you exactly how to do that in my course. I’ve made a section I think that is the selling point for my course right there because I walk you through setting up your legal entity, setting up your LLC and your EIN number, all that stuff. I’ll walk you through that in my course, and I know that people pay thousands of dollars to go get this stuff set up which is ridiculous in my mind.
I spent $50 in the state of Kentucky to create my legal entity, my tax identification and all that. So, that is all that there is to it for those of you guys who are spending thousands of dollars, spending too much money please do me a favor and do your own research, figure out how to do it on your own you’re saving yourself a lot of time and energy.
I know of a case where a kid pulled out a personal loan of 10 grand and spent forty-five hundred dollars just to make an LLC. And this you know it ticks me off. I can’t imagine someone would do that, so guys, be very careful. Don’t fall into a scam artist trap, don’t listen to what other people are saying. Do your own research, that’s what it comes down to.
Don’t even listen to me go do your own research and figure it out on your own. So, once you have your employer identification of your EIN number you can now go to a bank and you can hand them this information and you can open up a business bank account.
Business Bank Account
Now, having a business bank account has its benefits. it keeps a very detailed account of your expenses and you could track everything very easily. I highly recommend you don’t mix your personal and business bank accounts that just confuse you when it comes time for tax season, so guys do me a favor, go make yourself a business bank account.
These four steps that I’ve shared you’re already halfway there as far as getting started. There’s no reason why you shouldn’t be able to start today! So, you go to the bank, they give you your business bank account, and most likely there’s going to be some kind of monthly charge they’re going to charge you a service fee, depending on the bank, it could be cheap, it could be like a little on the higher end.
I’m spending $10 a month to keep my businessman count open here in Springfield Missouri; super cheap! I think it’s on the lower end of bank accounts. I know some bank accounts charge like $30 or $40 a month.
STR Permits/ Licensing
Regardless, you want to keep track of those expenses and that’s the easiest way to do it so step 6 kind of should be step one but a lot of people don’t know how to deal with this stuff and a lot of people run away when they hear this; so guys step six is honestly get your listing get the property permitted, get the proper licensing that it is required for Airbnb and short-term rentals.
Without these permits, without the legally regulated side of Airbnb, you’re probably going to face heavy fines. I’m talking twenty grand; $1000 day fines $ 20,000-day fines; who knows I’ve heard of very extreme instances where people are getting fined for not having their permits for the short-term rentals, so guys go to City Hall, go speak to whoever sitting there at the Building and Development desk and ask them what is required for me to operate a short term rental for the zone, for the zip code, and they’ll be more than happy to share that information with you.
That’s their job, they’re paid government employees; they’re sitting there waiting for you to come by and ask them. Simply go there and tell them “I have this property at this address. I want to know what it will take for me to have this license for short-term rentals”.
So, once you’re regulated that’s half the bat right there. I’m actually going to pick up my permit for my listing today. For all of you guys who have been waiting and keeping up with my story, I’m finally picking up my permit for the short-term rental that I currently have here in Springfield today. I’ll share more of that experience in another video. Getting your permits and proper licensing is such an important step. Make sure you do that.
The next step for you is to go get business insurance. This is important because you’re going to end up having employees; maybe you want to hire cleaners in the future. Go ahead and do the research, go ahead and look into the business insurance aspect of everything.
And once again, if you’re doing rental arbitrage you might need to get renters insurance, and this is probably required. I want to say that the Airbnb hosts guarantee is not insurance. They make it seem like that. They sell things like, “what, I’m paying in 1 million dollars of coverage”, but what you actually need to do is to get proper insurance. They don’t cover a lot of little things that you’d probably expect them to.
The structure that 1-million-dollar guarantee in a way to where it’s very difficult to get your stuff covered if it does go missing or if it goes damaged. So, be sure to do your research once again.
The next step for you is to have an action plan so take action on these eight things and I guarantee you’ll have a listing before you know it. Now, I didn’t go into details on how to pitch to the landlord and I didn’t go to details on how to acquire the listing.
I’m assuming you’ve already done that and you’ve done the market analysis. From step one to step eight any of you guys watching this right now could take action. So, taking action has been a thing I’ve battled within the past and I’ve learned, and I want you guys to take note of this; I’ve learned that the best time to act is now.
Don’t wait till tomorrow. There’s no such thing as perfect timing; the perfect time is now. And I meant that with all my heart. If any of you guys are watching this, these are eight brief and actionable steps, I’m sharing with you guys today. I know I didn’t go in-depth on them. I just think that they’re very valuable pieces of information, and if you want to just write them down one through eight, you already know what you have to do.
I’m at that today because of the action I took, and without that guy who knows where I would be; I’d probably still be stuck at my job or I’d be scrambling to find a way to make ends meet for myself.
Thank you so much for reading my article here on SaveYourBucks. Be sure to leave your comments or questions below. I write Airbnb in rent to arbitrage articles. Make sure you subscribe to our newsletter and updates while you are here, and are fresh on your mind. I believe you will get a lot of value from this website, I have a reason I was excited that asked me to share this article.
For any of you guys who want to learn more in detail on how to get started Airbnb, I put together this course which will constantly be updated with information. For a one-time payment, you are getting a source of information that is going to be forever updated. I myself have personally spent up to $600 for a summer school class at a college, and haven’t even gotten the credit for it.
So, you should consider something like this if you don’t want to sift through tons of information online trying to piece together ways to build your business and build your empire.
I’m going to go through some of the curriculum quickly; I go through a step-by-step process and I talk about mostly everything you don’t need to get started. Most of you guys have all these questions regarding the business model. Well, what I have put together here is all that information and access to myself.
Once you are enrolled in this course you are my priority. That is something that I want to make very clear from the start. There’s something that I look at, which is the long-term development with you guys and building a relationship with you guys.
Make sure that you guys have success with your listing and I’m going to be there for you guys and I’ll have a more personal connection to you once you join. Once again, I mentioned at the end of this video that, I give you guys the process of starting and setting up your legal entity, and that alone is worth the price of the course because you’re paying LegalZoom $300 up to 400 hours depending on the state. You’re paying someone for the service of setting up your entity. And like I said before, I know somebody who has just dropped $4,500 bucks for an LLC, and I’ll show you how to do it the cheapest way possible.
I think that right there is a lot of value. Another thing that I think is really in high demand, is the lease agreement that I have with the landlord; I’ll share this with you guys. I think you should check this out. I’ve given you tons of information and I’m adding information to it. I’m currently working on a bunch of curriculum to add to it to make sure that is valuable.