Wednesday, April 1, 2020

5 Financial Tips for Airbnb Hosts During the Covid-19 Outbreak

Through the news of industries that have been affected by the COVID-19 outbreak, one that has been slightly ignored is the world of Airbnb. There were 650,000 global hosts in 2019. There's a good chance all of them have been affected one way or another. To stem the loss of income, here are five financial tips for Airbnb hosts during the COVID-19 Outbreak.

1. Halt Design Improvements

Though big-box stores are promoting huge sales and low credit interest rates to stabilize their profits, this is not a time to invest in a huge renovation project. In other words, tearing down walls or building a new room from scratch. There are two reasons for this.

First, hosts won't find a contractor. If they do, there's a good chance they'll charge top dollar to risk their health to start a project. 

Second, if hosts take on improvements themselves and get seriously injured, then they can end up going to the hospital. Though it may seem selfish, beds in those medical facilities should be saved for those infected with the virus.

2. Don't Exhaust Savings Accounts

Connected to the first tip, hosts can't exhaust their savings accounts. They need to utilize what they have gotten from patrons to pay the mortgage, rent, and necessary bills. Any extra must be put aside in case the crisis goes longer than predicted. No need for hosts to jump online and spend their earnings on additional decorations.

In reality, Airbnb hosts should have at least six months of emergency savings available. In addition, they should be charging enough to have their expenses paid. That's how to make money with Airbnb.

3. Invest in Online Programs to Enhance Hosting

The one thing to do with the money previously earned from Airbnb guests is to invest in online programs about hosting. Companies like Bnbformula offer these learning sessions to help others become as successful as they have.

Should the number of guests be lower during the COVID-19 outbreak, it is a prime opportunity for Airbnb hosts to gain a better understanding of their industry. With the available time, they can absorb the material offered instead of rushing through it. 

In turn, they'll retain knowledge that can be utilized once the travel and business markets pick up. Overall, the return on investment in one of these online programs may be greater than the initial cost.

4. Refinance Your Mortgage

With interest rates at zero percent due to the COVID-19 outbreak, there is no better time for Airbnb hosts to refinance their mortgages. By taking measures to accomplish this task, they'll be able to lower their monthly payments. If they do this while maintaining their regular guest fees, the hosts can increase their profits. Thus, they will stay ahead of the curve should another issue emerge.

Granted, some Airbnb hosts might be afraid to head to their bank to fill out forms. Luckily, many financial institutions allow homeowners to obtain refinancing estimates and complete the process online. All that's required is the necessary paperwork. That can be sent to the bank via secure document scans and uploads.

5. Look for Other Airbnb Properties

The COVID-19 outbreak hasn't shut down all businesses across the globe. Airbnb hosts still have plenty of tools at their disposal to search for other property investments in their area. This is the right time to review available locations. When the economy recovers, there's an excellent chance people cooped up in their homes for months will want to travel.

Therefore, hosts should consider investments not only near their current property but also those near tourist attractions. For instance, places in the mountains or near the beach that will not take a huge investment to freshen up. Even if hosts live in a shelter-in-place area, they can still travel to the other property for minor updates. As a result, the residences will be ready for use when the restrictions are lifted.

Though the circumstances are serious, there are opportunities for investment and financial security for Airbnb hosts. Yes, during the moments of nothingness there will be urges for these hosts to buy on impulse. If they can push those back and maintain their existing finances, the results for them will be more successful than they were prior to the COVID-19 crisis.

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