The more you know, the better your property will be.

Deciding to list your house or investment property as a short-term rental can be one of the most lucrative ways to earn a living or second income. It’s enthralling to think about the rewards you could potentially reap. However, if you’re considering listing your house or property on Airbnb, be sure to take into account the major factors that can affect the value of your rental and your overall ability to host. Here are five key actions to take before listing your house on Airbnb:

Understand the Local Laws and Regulations

As Airbnb grows in prominence, so do the laws and rules that define its operation in each location. In recent years, changing regulations have laid out what can or cannot be used as a rental, as well as how many days you can technically allow guests to stay.

Cities and towns have had varying responses to this growth, but it’s constantly changing, so be sure to look up and stay current on what the local rules and laws are. You could encounter short term occupancy rules or licensing requirements. Confirm that you’re able to operate inside those spheres legally.

Consider Your Present & Future Finances

Where this is not an actual requirement, it’s always good to be mindful of how much you plan to invest in your property and consider its future financial needs. Upfront expenses, such as permits, licenses, or even getting your property ready for guests, should be considered before going forward.

Thinking about refinancing your home in the future? Though the market is changing, you could encounter difficulty when including short-term rental income on your application. Fortunately, with the ever-growing demand, more lenders are considering Airbnb-income as valid for consideration.

Ensure Your Property is Safe and Up to Date

The last thing you want is for a guest to report that your property is unsafe. Be sure to clean and fix your house. Make repairs, change the batteries in your smoke detectors, change light bulbs, and tackle any other house to-dos you’ve been putting aside. Once you begin hosting, either you or your management crew (should you employ one) will be continuously checking the property after each stay.

Fortunately, the money coming from your Airbnb rental can help with major upgrades for your property. Think painting, room improvements, or even new appliances!

Be sure to review your homeowner’s insurance to see what it covers and what you’re protected against. Though Airbnb offers Host Protection Insurance, you’ll want to know that you’re covered in the event that Airbnb isn’t able to.

Consider the Market

Where would your property land in relation to the value of other properties? Are you in the city? A town? Near a beach? Do you have a porch? Updated appliances or luxurious amenities? All these factors affect your property’s appeal on Airbnb

You want to find that sweet spot between supply and demand. If you’re in a city or located near a tourist-heavy destination, add a location-premium to your price. Located in an area that isn’t popular but still sees a stream of visitors? Consider upping the “luxuriousness” of your property to create one-of-a-kind stays. Anything that can be deemed particularly unique about your rental creates added-value and will help you set your base-rate.

Consider Your Time

If you plan to run an Airbnb rental by yourself, prepare to invest significant time into management, cleaning, and maintenance. According to GuestReady, you could be looking at 2-3 hours a day merely managing your property and between 5-8 hours a day during guest changeover. Not to mention being on call 24/7 for your current guests and communication on the Airbnb platform.

All aspects of running a short-term rental, marketing, management, and maintenance, can be successful with the time that you devote to it. If you have the time or if your goal is to make Airbnb hosting your full-time responsibility, then the payoff will be generously rewarding

If you’re planning for this venture to be a second source of income or if you have little of your own time to spare for managing, you might consider using an Airbnb property management service. These services take a management fee anywhere between 10% – 40%, depending on the company. To some, this may seem high, but services include optimized marketing, pricing, guest communication, and not to mention, peace-of-mind knowing your investment is receiving the utmost attention and care.

Listing your house on Airbnb is the beginning of a fun and dynamic journey. Set yourself up for success by doing your due diligence. Prepare yourself early, so that you can step out confidently as an Airbnb host for the long run.