Short-term home rentals mushroomed over the last decade as mobile technology connected budget-minded travelers with open-minded homeowners, altering the hospitality industry.
These same short-term rentals are now reshaping real estate and investing. Buyers of second or third homes are increasingly using them to host people on vacation rather than long-term renters.
Some property owners find they can make more money by offering short stays. Consultants have sprung up to help people decide the best use of their additional properties.
For tips on actually running a short-term rental, we turned to four of Minnesota’s highest-rated hosts on Airbnb, the largest short-term rental listing platform. It has about 650,000 hosts in the U.S. By contrast, there about 5.5 million hotel rooms in the country.
Here are their top tips:
Set clear expectations about your place.
One of the most sought-after Airbnb spots in Minnesota lacks the most basic feature of most overnight lodging — indoor plumbing.
Shari and David Hendren built the ReTreet House just down a hill from their home outside Two Harbors. The two-story house, which they opened in 2019, is on stilts and accessed by a staircase that winds around cedar trees. But the bedrock on which it’s built made running a water line too expensive.
“That makes us market to a certain kind of individual or group of people. We’re already cutting out people who aren’t interested in an outdoor bathroom,” Shari Hendren said. “We’ve make it very clear so people know what they’re going into.”
Because both hosts and guests are taking a bit more risk in a shared-rental situation, clear communication upfront is key. Put plenty of photos of your property on the listing, and present its downsides as well as its attributes.
In the Twin Cities, parking constraints, noise and access to local businesses need to be clearly described, said Krista Rakochy, whose guest suite in northeast Minneapolis is one of the highest-rated Airbnbs in the metro area.
She also recommends hosts be accessible and responsive. She leaves a handwritten welcome note for each of her guests. “I’m a real person who is responding to them, not someone distant and canned,” Rakochy said.
Embrace guests’ ideas
After the death of his father, Pete Norby and his wife, Barb, converted his parents’ house outside of Canton, near the Iowa border in the state’s southeast corner, into an Airbnb they call the Big Woods Cottage. Almost immediately, they started incorporating ideas from guests, changes that helped lift them into the ranking heights.
“For the first couple of years, I really prodded everybody for suggestions,” Barb Norby said. “There are so many little things that you don’t think of yourself.”
The variety of kitchen utensils is endless, she noted. And with many guests on hunting or fishing trips, the Norbys equipped the cottage with many spices and condiments. “All of the suggestions people have had have been spot on,” she said.
Make the schedule work for you
Many people start a short-term rental thinking they need to get bookings all the time. They then realize it’s good to have some time between guests. Rakochy, who opened just in time to host people for the 2018 Super Bowl in Minneapolis, said, “Ours filled up really fast, to the point where we had to start scheduling in breaks.”
Ashley Hewitt and her sister began their Airbnb near Brook Park the same way, allowing guests to book any dates they wanted. “This would make our cleaning schedule sporadic and we would have up to three bookings a week, with check-ins and check-outs on any given day,” she said.
The onset of the coronavirus pandemic in 2020 initially ground business to a halt at short-term rentals, just as at other lodging. Demand quickly returned, though, especially at Airbnbs in small towns and rural areas that provided an escape from cities.
Airbnb imposed cleaning protocols on hosts and it quickly became the norm for hosts to have a day or two between visitor stays. Many found they liked that pattern. “This allowed us to have a set schedule week to week,” Hewitt said.
Compare with other Airbnb hosts on price, costs, taxes
The support network for hosts is extensive, from Airbnb itself through numerous online groups. “I avoided a lot of mistakes by learning from the online community of hosts,” Rakochy said.
One of the most important things to research is how to price your rental. Hosts typically look at nearby places to get a feel for prices. Airbnb and the other short-term rental platforms also have methods for hosts to offer discounts for longer stays or to apply different prices as demand rises and falls.
Airbnb handles billing, direct deposit and most lodging and sales taxes. Hosts pay a service fee to the company for that accounting work. Some pass that fee on to guests.
In the pandemic of the past two years, the bigger decision for hosts became how to handle cleaning. The four top-rated Minnesota hosts we contacted clean their properties themselves and don’t charge guests extra. Many hosts, however, hire other people to clean and tack on a cleaning fee — exceeding $100 in some cases.
“We do not charge a cleaning fee to our guests,” Hendren said. “We take it off our income as part of our operating cost at the end of the year.”
Norby said she prefers cleaning her cottage herself. “I feel this gives me control of my cleaning procedures, reduces the possible contamination risks during COVID and keeps my prices down,” she said.
Cleanliness is really the most important thing
Cleanliness is the first attribute guests are asked to comment on when they rank Airbnb hosts, and it’s the first thing they notice when they walk into a property.
“Clean it like you want it to be new for each person,” Hendren said. “I’m big on making things nice.”
Norby said cleanliness is something she appreciates herself when she travels. “I find it a complete turnoff to go in someplace and think ‘Oh, I don’t know if I want to lay my clothes here,'” she said.
Hewitt said she and her sister have found, even if they’re between guests, their cabin needs attention every day.
“Just imagine that you have the most important guests coming to stay at your place, and you know that these guests need to thoroughly enjoy their stay as, afterwards, they will tell the world what they thought,” she said.
Rakochy’s top tip for cleanliness is one that hotel owners have known about for decades: Use white towels and sheets.
“A lot of people think the opposite and they use sheets that match the color of the walls or floors or decor,” she said. “White towels and bedding give guests the feeling of cleanliness and have a peaceful appeal. And they’re actually easier to clean because you can bleach them.”