If you have a room or second house to spare, you could be sitting on a potential gold mine. So you should just post a rental notice and watch the money flow in, right? It’s not quite that easy, but many people are earning extra income by listing their space on peer-to-peer rental marketplaces like Airbnb.

Whether you’d like someone to cover the cost of the rent for you while you’re overseas on holiday, or you’d like to make some extra dollars off that spare room, listing your property on Airbnb doesn’t come without its risks.

How it works

Travellers can search the Airbnb database for properties at any time but need to be a member of the website before they can make a reservation. Because of this, you’ll be able to check the rating of the person looking to hire your place and determine whether you are happy for them to stay the night or not.

Guests will also be able to rate you as a host, as well as your property, so other travellers can determine whether it’s worth taking the risk and booking a reservation at your property.

Payments are made through Airbnb to avoid any risk of misconduct for parties on both sides of the transaction. These payments are done through Paypal, direct deposit and international money wire and sent to hosts 24 hours after the guest has checked in.

Hosts also have the ability to message guests through the Airbnb website and app to organise check-in and check-out and to relay any important details guests need to know before staying at the property.

Benefits of listing your property on Airbnb

On Airbnb, you, as the host, set the availability and house rules for your listing. You can also choose to rent out just a single room and continue to stay at the property or rent out the entire property and take yourself on a holiday.

The host has control over calendar settings to determine when guests can and can’t stay at the property, as well as control over choosing who leases out the property.

Airbnb takes a host service fee on each reservation but what you charge guests for staying a night on your property is up to you. It can be an easy way to cash in on a spare room you have or covering the rent while you’re away.

Becoming part of a worldwide community of peer-to-peer rentals also has its social benefits. Playing host and providing guests with extra comforts might convince them to extend their own welcome on their own property, providing you with an affordable accommodation option on your next holiday.

Risks involved in listing your property on Airbnb

As with any rental property, you risk damage to your place. Although Airbnb offers their $1,300,000 Host Guarantee to protect your property from accidental damage, there’s still the risk of the damage being done. It’s important to keep your valuables in a secure location to avoid damage or theft.

Be aware of the tax implications renting out your property could have. Consider speaking to your accountant regarding declarations and claims you could  be eligible for when making money through Airbnb.

Other considerations are state and local laws and landlord permission that may limit or prohibit the renting of property so be sure to check that you have permission to do so, before you list your property.

Renting out your property requires time and effort on your part to provide a service that guests are willing to pay for. Most hosts clean their spaces regularly and provide essentials such as towels, sheets and toilet paper. Some hosts provide breakfast where others are more hands-off and let guests have full control of the kitchen. For hosts who just want to make some extra dollars on the side, it may be too much work for income that can be generated.

Renting out your space on Airbnb has its monetary and social benefits and can be worthwhile, however work is required to make your property something that appeals to travellers and potential guests. Weigh up the pros and cons before you consider creating your listing.