Are you interested in starting your Airbnb Business and asked yourself: “How to pitch landlords on Airbnb?”. Then this text is for you.
For most people who want to get started with their AirBnB Short Term Rental Business, the hardest part seems to find a property and especially get the allowance of the landlord to sublet their property on AirBnB. This part is also the hardest for me since I do not consider myself as a significant talent when it comes to Sales (at least not in the classical “Pitch Sales”).
What you can do when you feel the same is first to prepare yourself and practice, practice, practice or team up (or outsource) with someone more of a natural in this area. In the end, you need some kind of property to start renting out and automate it (e.g. the messaging).
It might also be the reason why many AirBnB Hosts do not ask for permission when they start renting out. I can NOT recommend this option for the sake of your good night’s sleep and also the risk of getting evicted in the worst case. The likelihood that the owner finds out sooner or later is real. How fast they find out depends on your property, neighbors, how many properties your landlord owns, and more. Better is to start clean.
At the latest, when you start to grow your business and have multiple properties, you want to make sure that you have granted permission to sublet your apartments; otherwise, one potential fuckup can follow the other and destroy what you build before.
In this article, I will try to answer the following questions:
- How to prepare for the conversation with the landlord?
- How to talk to the landlord about hosting on Airbnb?
- What are the most common objections of a homeowner and how to overcome them?
- What are you able to offer to the landlord?
Let’s right jump into it.
We start by doing our homework to improve the odds of having a positive conversation and get what you want. This phase is all about doing your Research and being prepared. Do not expect that you get a YES from the first landlord you ask for permission. You will probably get rejected a lot. Do not give up.
Airbnb Rules and Regulations
Start here and do some first research on the legal situation for the city where you want to add your listing(s). Information is not always easy to find but no worries, you should be able to get something out of just doing a first google search. Just type “YOUR CITY“ Airbnb in Google and get an overview of what is coming up.
To keep track of your Research I recommend starting a swap file to collect valuable information for later reviewing. Evernote is an excellent tool for that purpose.
Airbnb is also offering information on this topic for many countries and cities. Here is an example of Hosting in Austria and local regulations in Vienna.
After this step, you have an overview and a feeling of how the regulative situation in “your” city is.
Research numbers about your location
If you want start your Short Term Rental (STR) Business, you need to think if the property that you want to list is in an area where it makes sense in other words profitable to do so. In the end, we want to make and not lose money with this, therefore better do your Research.
Again this step is more to get a feeling for the numbers, find out what your limits are in the negotiation process, and less to get 100 % accurate estimation.
I would start an Airtable, Google Sheet, or Excel Table to enter the data I have researched. (Of course, linked to my Evernote Swapfile). Use the tool of your choice and keep track of your Research. Otherwise, you can get the feeling that you start over and over again to work on the same thing. I am sure you know this feeling, when you get lost in your Research rabbit hole.
AirDNA is a Short-Term Rental Data & Analytics Tool that will give you valuable insights into the performance of existing Airbnbs, your competitor’s occupancy rates, revenue, and pricing. Some of the data is available for free. For a more in-depth analysis of a city, you have to pay. The detailed pricing information you can find here.
For a first analysis, you can check the rental demand, the revenue growth, seasonality, regulation, invest ability, average daily rates, average occupancy rates, and average revenue per property. You can really go in detail here, find the top listings, and much more, but again when just want to get an overview at this stage.
You should find out enough to make the first calculation. Add your research (avg Rate, avg Occupancy, etc.)and the fix costs that you are expecting for fixed expenses like gross rent, energy, insurance, internet, etc. — done with that? Have a first look at your sheet and check your estimated number to get a feeling for your potential profit margin.
“Knowing” your numbers can help you if you need to offer a piece of the cake to the landlord later on in the negotiations.
Properties & Homeowner
If you have direct contact with the homeowner respectively you know who owns the property you want to rent out, try to find out information about the landlord, that helps to understand his/her situation. How many properties does he own, is the landlord living in the house, how old is the landlord?
That information can help you later on during the communication to understand the owner of the home better and help him to overcome his objections.
Enough Research, for now, let’s try to get new properties.
“Pitch” the landlord
First of all, try to put yourself into the landlord’s shoes, probably he was putting a lot of his savings and assets into the real estate to make a long term, low risk, and moderate-income. It’s not just an object; the property is, in many cases, a vital asset to them that you do not just give away easily.
Of course, they have objections and concerns about what you want to do with their investment.
The key is to find the best solution for both you and the landlord’s world. Try to build an excellent deep relationship to help each other, to profit both from the upside and protect against the downside.
Build rapport and trust first
Like in other areas of life, there is no “one-wins-all “sales script out there. Think about the chat more as a dialogue than a pitch.
In my opinion, it is essential to be authentic, upfront, honest, and explain what your plans are. Try to listen more than you talk. Understand their objections, pain points, and concerns. Do not argue with the homeowner.
Let your landlord know more about who you are, how you care for your home, house, and your neighbors, and why you want to host on Airbnb.
If you can not meet them in person, write them a message. If the landlords say no, do not be afraid to ask “why “and try to address their concerns.
There are different techniques (e.g., the yes ladder, “feel-felt-found, “porcupine close) to move forward here if you are stuck, but this goes too far for this article. You can find plenty of information on that. Just Google it.
Common objections and how to overcome them
During the dialogue, you hopefully get a feeling of why the landlord is not feeling comfortable with letting you sublet his property. Here a list of widespread objections and how you can overcome them.
Legal situation and regulation
“Is this legal in my city or location of the property, what if I get a fine?”
Overcome this Objection:
Did you do your homework and research your location? You should know the answer by now, and you should be in the “talk to the landlord “phase AirBnB is not allowed in your city.
Inform the landlord about the rules, and short-term rental is ok and not against the law. This objection should be easy to vanish. In Vienna, for example, the situation is a bit more complicated. It depends on the actual location of your apartment and the apartments dedication if you can do Short Term Rental with your apartment.
“My insurance is not covering damages if the space was rented as a business. That is too risky for me. “
Overcome this Objection:
You can explain to the landlord how AirBnB Insurances works. AirBnB is covering up to USD 1.000.000.
You can take your additional rental insurance and add to the contract that you are liable for damages yourself. There are specified insurance offers for different markets. One for the UK is Guardhog.
You can suggest increasing the size of the security deposit.
Increased Depreciation and risk of damage on their unit
“All those guests will increase the depreciation, and I am sure there are more damages happening.”
Overcome this Objection:
You can also mention to them that most guests are there to either take a vacation or on business trips, so they are not in the building most of the time. Another advantage we deep clean the apartment after every stay, and we take care of the property since if we do not, we get bad reviews and lose money.
If there are some small damages, we have a big interest in fixing them as soon as possible not to influence our business in a bad way. We take good care of the apartment. If you have someone four years in the flat, you do not know what is going on there till they move out and if they take care of your place.
“We do not have bad behaving, loud people in our property that maybe even harass the neighbors or steal.”
Overcome this Objection:
99% of the guests are reasonable and great; of course, there are also some black sheep under the guests. I guess the distribution is like everywhere else.
You can mention that AirBnB is doing a carefully pre-screening, and you can only accept guests with a profile that fits your standards. Guests also have to accept your strict house rules before they book. You can share those rules with the landlord to be as transparent as possible.
Too important can be that most of the guests are doing business trips or vacation, which means that they are not in the apartment a lot usually. Those guests are low-risks and typically do not cause any problems. If this does not work, you can offer to host just to specific groups like families, business travelers, and so on.
If you are only planning to rent out a room, you can tell him that you will be there during the guest’s stay.
The objections are very individual for each landlord, but those above should cover 80 % of the most common ones. But wait, what if you can vanish all the concerns, but the landlord asks you.
Why should I do that? What is in for me?
What can you offer the landlord?
Imagine: You own a property: Your tenant approaches want you to let him sublet their space to a large number of strangers (going in and out) for their profit.
Why should he let you do that?
There are many things that you can try to do to convince the landlord. The obvious, but not always necessary thing is to pay more rent or give a share of the revenue that you earned with your Short Term Rental (STR) Business.
You can try to convince the landlord that you are going for a long-lasting partnership. If the landlord has more than one property and working together works well, he does not ever again worry about having his apartments empty since you can take them and rent them out as well.
You also will take care of the properties, far beyond deep cleaning after every stay, since this is your business, the source of your income, and only if your guests are happy and your reviews are reasonable, you will make profits.
If you have more questions you can book a call with me.