What is Accommodation Sharing?
Accommodation sharing is a booming area of the Shared Economy, providing a service where people have the opportunity to rent out their spare rooms or entire houses to strangers for short periods of time.
You can also check out our online guide for more lucrative business ideas.
Who are the Big Players?
AirBnB – ‘Welcome Home’
AirBnB, a short-term property rental startup, is unquestionably the leading competitor in accommodation sharing. AirBnB has been shaking up the tourism industry; since late 2015, exceeding 10 million guest-stays since its launch and listing more than half a million properties on its database. The company is now a major player in the hotel industry, averaging nearly 22% more guests per night than Hilton Worldwide.
Couchsurfer – ‘You have friends all over the world, you just haven’t met them yet’
The best selling point of Couchsurfer? It’s free! Downside? You only get a couch. This platform creates a global community of travellers, where users share their homes with strangers without a fee.
Flatmates.com.au – ‘Make the most of your spare room’
Flatmates.com.au is the largest shared accommodation website based in Australia. Similar to AirBnb, this platform provides short-term property rentals that combat the extreme property prices of Sydney.
How to Become a Host?
Step 1: Pick Which Platform to Join.
If you are looking to make some extra cash, AirBnB or Flatmates.com may be the sites for you. But if you are looking for a fun and social experience to meet new people from around the world, Couchsurfer may be the way to go.
Consider what you want out of your experience and select the appropriate platform to use.
Step 2: List your Space.
Listing your space is often free. Include information about your space, it’s availabilities, pricing and don’t forget to include as many photos as you can. Guests often search for certain criteria when looking for a place, so include any amenities you offer.
Make sure your photographs are well-lit and of good quality; it helps your potential guests picture themselves in your space. AirBnB even offers a free professional photographer service for active hosts in certain areas.
Step 3: Respond to Requests.
Once your listing is up, you will start receiving requests. Research (not stalk) your potential guests before accepting their request to ensure you have the best experience possible – after all, you are hosting a stranger in your home.
Don’t forget to manage your calendar settings to control when and for how long guests can stay, for example, you may want to include a minimum stay requirement. You may also want to set up a notification system, so that you are aware of any requests as soon as they are made. Keep in mind that your response time affects your ratings.
*Remember that AirBnB takes a 3% service fee when you confirm a booking.
Step 4: Welcome your Guests.
Most platforms operate on a reviewing structure, so it is important that you try your best to make your guest’s stay as comfortable as possible. You may want to organise a key exchange so you have the opportunity to personally welcome your guests and an opportunity to share any neighbourhood tips. You may also want to consider keeping a spare key for emergency situations.
Things to Consider:
Insurance
Although AirBnB’s $1 million host protection insurance is comforting, it is still crucial to notify your insurance company. There have been cases in NSW where the owner of short-term rental property has been held liable, for example a NSW case in 2013, an owner was held liable for a slippery driveway.
Legalities
In NSW, local councils have differing policies that regulate the type of developments allowed in particular locations. Councils divide their land into zones, and zones determine what developers and owners can create in those areas. In the 2013 NSW case, case it was declared that short-term rental was illegal without the council’s approval.
Do research on the law surrounding short-term rentals in your area. AirBnB states in their T&Cs that it is the host’s responsibility to identify and abide by the rules of the governing authorities.
It may also be helpful to review your mortgage, as some mortgagors do not allow rentals.
Tax Implications
Hosts now need to declare income derived from accommodation sharing as rent money is generally regarded as assessable income. This also means you can claim deductions for associated expenses, such as part or all of the interest on your home loan. You may also need to pay Capital Gains Tax (CGT) if you decide to sell your property in the future.
Unlike, ridesharing however, accommodation hosts do not need to apply for Goods and Services Tax (GST).
Read more about the 5 New Tax Implications for the Sharing Community here.
Housemates
If you have housemates and are thinking of short-term renting, it will be useful to employ a Housemate Agreement. A Housemate agreement outlines the terms and conditions of the tenancy to prevent disputes from arising. It should include details about how often you plan to host, how you will enforce strict house rules and whether you will share revenue with your housemates.
Want more? Stay tuned for Part VI of this series as we learn all about task sharing.
