What is Airbnb Investing?
Airbnb is investment in an online marketplace that links hosts who aspire to rent out their residency or residencies to guests who are in search of accommodation in a precise location.
It commenced in 2008 when two designers who had space to share hosted three travellers looking for accommodation.
Now, according to data provided by Airbnb, it has an excess of six million listings, covering more than 100,000 cities and towns and over 220 countries worldwide. Accommodation spans from homelike cottages to elegant penthouses provided by hosts to potential guests. In Zimbabwe not every traveller can afford a hotel or want to stay in a hotel hence Airbnb gives a viable option.
How do Airbnb’s work?
Prior to 2008, the feasible option for travellers was to book into a hotel, lodge etc. but with Airbnb revolutionising the hospitality industry nowadays the same travellers are opting for Airbnb.
In Zimbabwe its slowly trickling into the market in spite of the fact that most hosts are Zimbabwean property owners living abroad but having co-hosts in Zimbabwe.
There are two parties involved when transacting using Airbnb which are the hosts and the guests.
The hosts are the owners of the property. To list their property, they take pictures of the property, appliances or furniture and register it on the Airbnb app. The hosts must abide by the terms and conditions set forth by Airbnb.
They also are mandated to give a description of the property, what the place offers in terms of kitchen, Wi-Fi, parking etc. Lastly, it’s a prerequisite for the host to state how much the stay is per night.
The guests are the travellers who are renting the property listed by the host. The guests must be connected to the internet and either download the Airbnb app or go to the Airbnb website to book. After that they create an account and enter the personal information i.e., phone number.
The next step is to search for the area they want the accommodation and pursue a place that suits their needs.
When the guest has found the ideal accommodation, they make a booking or reservation and wait for the host to accept the booking request.
The last step is to pay for the accommodation and message the host for the details such as the address and how to get the keys to the property.For longer stays the guest can negotiate with the host payment option and all payment is facilitated by Airbnb.
How to invest in Airbnb?
With the rise of Airbnb, the average citizen can now turn their home or other property to a profitable and lucrative business. There are two ways investors can invest in airbnb which are as a host or co-host
This is when you are the sole owner of the property and are in charge of booking to allowing guests check in and out. Mostly in Zimbabwe, Zimbabweans abroad manage the online side of the business and employ a co-host to manage the business on the property i.e., cleaning, handling of keys and assessing if there are any damages by the guest. This is the most prevalent way of investing in Airbnb as the whole caboodle goes through the host and it’s lucrative for investors as ownership is of essence to them.
This is when you are employed by the host to take care of the property in return you get a percentage of the rental income. This is usually a friend or relative entrusted to do the job in most instances. As of late co-host can put money in to make the property more lavish to attract high end guests or drive the accommodation price up and in return get a predetermined percentage of the rental income.
Anele Zifiso Dube is a Charted Professional Accountant student at CPA BC in Canada. +1 (778) 512-4588 or [email protected]