Basic Setup Tips for New Airbnb Hosts

Airbnb is taking the world by storm, allowing mum & dad’s to start up their own bed and breakfast anywhere in the world very inexpensively and easily. Not only a win-win for families wanting an extra income stream, but also a win for tourists or holidaymakers who don’t want to pay ridiculous amounts for impersonal hotel rooms, with no kitchen facilities. Having a kitchen means they don’t have to eat out every night – so further reduces the cost of their holiday! It’s brilliant and easy to see how this new part of the sharing economy – no different to Uber – is becoming viral and spreading so quickly! The image below represents my dream Airbnb set-up which I have on my vision board for my future Airbnb listings. I thought I would share for a little bit of drool-worthy design inspiration. It’s important to set up your room and house so that it is clean and crisp, but also visual appealing for your target market.

Airbnb is perfect for anyone who has a spare home in their home, a separate granny flat or studio or even if you want to rent out your home while you are on holidays! Some people do rent out their investment properties full-time on Airbnb but this can be quite difficult to manage the quality of the experience for your guests, and in turn, to maintain high ratings. As this rental strategy does require more work than most, due to the high turnover of guests, it really works better if you live on the premises or nearby for ease of management.

I started using the Airbnb App in the second week of December 2015 to experiment with it a little for 2 rooms we have out the back of our house. This area has its own living space and bathroom, and my partner and I share the kitchen and laundry with our guests. December and January is generally a quiet time for long term renting in Newcastle, so I thought why not! It’s pretty easy to set up. You just need to have some photos of your house.. they even offer to send you a professional photographer for free to help you get started! It actually worked perfectly in the end as there are a lot of travellers coming through the area in summer, which is the quiet period for finding long-term tenants over Christmas when no one wants to move house and before the University semester starts in March/late February!

You can create an account online on your desktop or download the app on your mobile device. I’d recommend setting up first on your desktop by visiting the website Once you’ve created your account, set a low nightly rate to begin with until you get some ratings in and can build some trust. A price similar to that recommended to your area by Airbnb can be a good place to start. For me it was $39 per night as most rooms nearby were offering $45-50 or more, so it was quite competitive and I knew that I could get some people in quite quickly by out-pricing my competition. Still much cheaper than a hotel room, and more than I would get for long term renting, which is a must – due to the extra work involved. As we were targeting young back-packers and travelers – we chose to use a young colorful bedspread and this also helps our listing to stand out from the other listings. It worked quite well for us.


Fee structure

There is no wrong way to set up your fee structure on your Airbnb listing, so just work out what makes sense for you. Note that people will pay more for privacy – i.e. a granny flat or full house with all their own facilities, or for a secure, lockable room with a private bathroom. Make sure when you are comparing pricing of your competitors to work out a value per night, that you compare like for like in terms of shared or exclusive facilities, and also the standard of accommodation and style/furnishings. As you can see, our listing was quite basic furnishings and shared facilities with some privacy being at the back half of the house, so we set a budget price. If you don’t like having 2 people in the room so much, you can use your pricing to discourage this and charge a ridiculous amount. In my experience there is always a price you can find that something becomes worthwhile, even if you don’t necessarily like it, at least it is always temporary.

The trickiest thing is deciding on the pricing structure. This is how I have set my first listing up to begin with to give you an idea:


Fee for cleaning after the stay
A small cleaning fee of $10 to go towards the effort of cleaning bed linen – which helps to discourage short-term stays and encourages people to stay longer

Fee for extra person
I charged an extra $10 per night for an extra person. You can up this or just request the room is only suitable for 1 person only depending on the size and bedding configurations. If you are renting out multiple rooms, think about the worst case scenario or the most amount of people who can live there comfortably without making the place claustrophobic or not functional.

Cancellation Policy choice
The moderate cancellation period means that the guest can cancel up until 24 hrs prior to the booking, however they lose the fee for the first night. You also have to be careful with how you advertise your place. BE HONEST! If they claim they have been mislead or if the place is not clean to meet basic sanitary standards – they can cancel within the first 24 hours after check in and get all of their money back! But if they lie, don’t forget you can give them a poor rating – so I think the chance of someone trying to get a free night out of you is quite slim.

Security Deposit
I also ask for a small security deposit of $200 in case there is any damage. The way I understand this – is – it is like a hotel – Airbnb keep the guests credit card on file and can charge the credit card if a damage claim is made after check out. I also have a minimum of 3 nights stays, and offer weekly or monthly stay discounts to encourage people to stay longer. Let’s face it – no one wants a different person in their home every night of the week and to have to clean and wash the sheets every day!

Discounts for longer stays
We normally would rent out the room for $160 per week for 3 or more months long term. With the discount (which is there to encourage people to stay at least one week) it ends up being around $230 per week, and if they stay for a month – it comes down to $190 per week. My advice is do the maths and come up with something that makes logical sense like this. Also do some research on what is on offer in your local area, as you need to be very competitive to get people in early when you have no reviews yet. Once you have some good reviews, you can always jack up the price then.


Other little tips:

Consider having a welcome pack with house rules, and instructions on how to log into wifi and use basic appliances, i.e. to help guide the guest on what is fine to use and help themselves, so they can feel comfortable to settle in.
Consider in room tea/coffee facilities, and a room TV for those hermits who like to stay in bed and not socialise. Consider a desk or shared use of a study for those travelling workers or students, or even nomad bloggers.
Have clean and fresh sheets and towels. In my opinion white sheets and towels look and feel clean and comfortable, like a hotel.

All in all we managed to earn almost 40% more than what we could have done from long term leasing. Yes this isn’t always guaranteed and you can suffer from some vacancies, especially in non-holiday periods. However, this is a great alternative if holiday periods line up with quiet times in long term rental periods – which they seem to here in Newcastle, Australia!

I’ve heard people renting out their whole home for a week or two for over $1000 per week, and staying at their parents over the holidays! What a great way to pay for all your Christmas presents while doing nothing but spending time with your family!

Airbnb Booking Fees for Guest and for Host

What are the costs you ask? Well… airbnb costs nothing to set up an account. As a host, you do give them 3% of all the booking fees you receive. And as a guest you pay between 10-15% on top of the asking price as a booking fee. Do you have to declare this as income to the taxman? Well yes – I would. Let’s face it – you have a paper trail on the app and on your bank statement – so if you ever get audited they would catch you! I have had guests ask me if they can extend their stay outside of the app using cash. I would strongly recommend against this as then you have no legal protection that airbnb offer, no longer on a contract, no longer available to claim damage, etc. Not to mention it is against their terms and if airbnb ever found out they would block you from using the app & may seek legal action. So do it at your own risk!

We have actually used it to find long term tenants – but we signed them up straight after on residential tenancy agreements. No shortcuts guys – it’s just not worth it in the end when something goes wrong!

All in all – I love airbnb and I have not had a bad experience so far after 8+ bookings. The transparency of having such a great 2-way rating system means that everyone is on their best behaviour!

If you have any other questions about Airbnb feel free to comment below!


As Jade Hamilton does not know your individual circumstance and is NOT qualified as a financial adviser, accountant or solicitor, this blog contains information and opinion only. Jade is speaking only as a Real Estate Agent and Investor from her own Personal Experiences, and recommends you seek your own personalised advice from a suitably qualified person.