Tips on Being an Airbnb Host in the Philippines

Tips on Being an Airbnb Host in the Philippines

I’ve been an Airbnb host for more than 3 years now, since Nov 2011. It’s true that you can generate significant income from posting your place on Airbnb. It’s free to post and the site makes a small commission when someone books your place.

How significant?

Well you can more than double the average monthly rental you usually get for your property. So if the market rate for your property is around PHP20,000 a month then, if you have a healthy stream of Airbnb airbnb logobookings, you can easily double that to more than PHP40,000.

Yes, that’s net even of utility bills and other expenses.

So how do you get on the Airbnb bandwagon? There a lot of Philippine hosts now and it’s difficult to get noticed if you’re just starting out.

Don’t be discouraged though and here are some tips to get started. Happy hosting!

1. When you start, price below the market

If you think your place is worth PHP5,000 a night then when you first post it make it PHP4,500 or even PHP4,000 a night. In your first 6 months or so of operations you’re not after so much profit as volume, you want a lot of people staying with you so that more people can review your place. This is very important for new hosts who have few to zero reviews.

Trust me, when I first started on Airbnb I priced our 2BDR at USD120 a night. After a month of no one booking I slashed the price to USD90 a night, that’s when we started seeing some action. The nightly rate of the 2BDR now? USD140 a night.

A lot of properties look the same - set yours apart.
A lot of properties look the same – set yours apart.

2. Encourage people to review you by reviewing them

Reviews are life for new hosts. You can encourage guests to review your place by reviewing them. Airbnb allows both host and guest to review each other. To encourage honest reviews one party can’t see what the other wrote until both parties have written reviews. But the system will alert one party if the other has already reviewed them.

So if you (the host) review a guest who hasn’t reviewed you yet then Airbnb will inform the guest they have been reviewed. People like to reciprocate and if a guest knows that you’ve reviewed them this increases the changes that a guest will review you.

3. Reply as soon as possible

I leave my computer on throughout the day with my browser open to my gmail. When I receive an inquiry or booking request Airbnb shoots me an email and I log on right away to respond. Quick replies benefit you in two ways.

One, it’s believed that Airbnb takes note of how quickly a host replies and ranks the properties of hosts with quick reply times higher in the search rankings. So if someone is searching for a 1BDR in Cebu the search results will be factored, in part, based on which host has an average faster response time.

Two, guests naturally prefer quicker response times and many will even thank you for responding quickly. A fast response time means that you’re on the ball and this is what you want the guest to feel – that you know what you’re doing and that he will have a great time at your place because you are an experienced, professional host.

4. Location, location, location

If you’re on Airbnb you most likely already own a property in the Philippines and want to make some extra money from it. Your location then is fixed, wherever your property is will be where you will be hosting.

While you can’t pick the location of your current property you can emphasize descriptions of the location to entice guests. Are you near a mall or the airport? Put that in the title of your property!

Names of places like Greenbelt, Intramuros or Mall of Asia are well known even to foreigners traveling to the Philippines. They will often use these places as landmarks and you should as well. So in your description of your property you can put that you’re 5 minutes away from Mall of Asia or a 10 minute walk away from Ayala Center Cebu.

5. Have a system

The best hosts do a lot of their work behind the scenes. Have a system in place to handle regular cleanings, laundry, meeting the guest and maintenance. Having a system ensures that common concerns (eg. how do I get the key) are not an issue and that you can respond promptly to anything out of the ordinary.

Out of the ordinary events can range from a guest losing his key, or the toilet in the bathroom backing up or even an air conditioning unit suddenly dying on you.

If you have a system and people in place you can more easily respond to these situations.

(Having an aircon die on you is a real pain.)

6. Don’t let them see you sweat

Airbnb is great in part because it’s person to person. Interacting with a true local allows for some interesting spontaneous events. I was an Airbnb guest once in Seattle and the night I arrived my hosts, as part of their annual family event, burned their Christmas tree in their backyard. The flames reached so high one of the neighbors called the fire department. You would never see anything like that in a regular hotel or condotel setup.

My Airbnb hosts in Seattle and a mini fireball in their backyard.
My Airbnb hosts in Seattle and a mini fireball in their backyard.

The vast majority of guests and hosts on Airbnb are awesome folks. But inevitably you will get some characters, people who think that just because they booked your place then that means you are their personal concierge for the rest of their stay.

Be polite with these type of people but also be firm. Give in to requests that are reasonable (could I have an extra blanket) and put your foot down when the requests are absurd (I need a blender in the kitchen).

Most importantly, don’t ever let your guests see you sweat. Be calm, relaxed, informal.

Stay cool even if one of the main lighting fixtures in the dining room spontaneously disassembles or instead of 5 people staying at your place there is a whole barangay of relatives and helpers.

Houses Photo credit: my neighborhood via Photopin and a Creative Commons License

 

26 thoughts on “Tips on Being an Airbnb Host in the Philippines

    1. We pay all taxes (VAT, income, withholding, etc.) in connection with our apartment rental business. Admittedly it’s a pain to get registered (with your LGU and the BIR) but ultimately that’s the best way to deal with it. One benefit to being registered is that you can issue official receipts to your guests, something business travelers look for.

    1. We’ve been at it for almost 5 years so mostly it’s experience coupled with an awareness of what out competitors are charging. Airbnb also has a suggested price feature which is generally ok but sometimes undervalues the property.

        1. We don’t have any set schedule for raising prices. Once we see a sustained trend where an apartment always seems to be fully booked for a month we decide to raise the price a little to see if bookings will drop.

          In our 5 years of operations we’ve only raised prices around 3 times or so. And those were for specific apartments, not a blanket raise covering all of our apartments.

  1. Good day! Asks ko lang po what if hindi ko mairegister iyong place ko sa BIR or LGU. Like what you have mentioned it was painful. Gusto ko lang pong malaman iyong advantage and disadvantage. Thank you Sana po mkpgreply kayo I’m really interested to be a host In Airbnb.

    1. To be honest there isn’t much of a disadvantage. It’s unlikely that the BIR and/or your LGU would run after you got operating one Airbnb apartment. You could even argue you technically do not need to register if you’re just hosting in a couple of units.

  2. May I know your tax range as an income tax? How can we apply Rental business to LGU and BIR? Can you kindly explain here?

    1. I’d rather not discuss how much Alcoves makes 🙂

      You don’t need to register with your LGU and BIR. If you are just handling one or two units that you can simply report your income in your personal income tax statement every year.

      If you take on more units then it might be a good idea to register as a corporation. A basic benefit of being a corporation is that it has a separate personality under the law. So in case any legal issues arise then the corporation is the proper party, not you in your personal capacity.

      As a corporation you are automatically registered with the BIR once the SEC approves your incorporation papers. Getting a business permit depends on your LGU but basically the LGU asks you for Barangay Clearance (which usually just means paying an amount to the Barangay) and then asks you the nature of your business (I put real estate lease) and how much money you earn (if it’s your first year of applying for a business permit I think they have a set fee).

  3. Hi, I’d like to know how long before you started to register with LGU/BIR for your taxes. I’m currently hosting for one apartment in manila, I’ve just started renting it out a month ago. I’m looking for other units to be rented out in a few months. So I’d hope to get an insight on how start up rental business should deal with LGU/BIR. Also here’s Catch: I’m currently employed in the government. So I am quite unsure whether I should file for a mixed income. Hope you could shed some light into this.

    1. It was around a year or so that we only had 2 apartments and that I was reporting my income from rentals under my personal ITR.

      I don’t have any experience with how government employees are required to file their ITRs but I imagine the ITR is the same form as someone in the private sector who receives income from multiple sources (ie. not just purely compensation income).

  4. Hi! I am getting ready to rent my townhouse soon. Do I need to talk to the property management that manage the Subdivision and HOA regarding hosting my property? Do I need to ask for a permit?
    my property is in General Trias Cavite.

    1. It really depends if your HOA has specific regulations governing short term rentals.

      My suggestion would be to go to your association and ask for any regulations in general pertaining to leasing out your property. I would not disclose at this point that you are considering specifically letting it out on a short term basis as this is a bit out of the ordinary and why draw attention to yourself.

      For us all of our building admins know that we rent out the apartments on a short term basis. None of the buildings have any regulations concerning this particular activity. Some condo buildings (eg. Rockwell and Ayala developments) have already passed restrictions on short term rentals.

        1. If you’re a US citizen or are a US resident you would have to ask a US lawyer for the tax treatment of income earned outside of the US.

          1. You’ll need to report the income you made to the Bir (Philippines). You also will probably need to report it the irs (US) but you should consult a US tax attorney as I don’t know the law there.

  5. Plan of having my 2 br condo in Mandaluyong near Megamall to join the airbnb as a host. What are the steps or procedures i have to do. Thanks.

    1. What you need to do can be broken down into several categories.

      Airbnb:
      1. Sign up as a host with the site. This is relatively easy and straight forward. You will need to price your unit, ie. how much do you want to charge per night.
      2. Once you have been accepted as a host, avail of the free photography option. Airbnb will send over a photographer to take pictures of your place. Make sure your place is ready (furniture in place, sheets on the bed, etc.) before you ask for the photographer.

      The condo building:
      1. Ask if there are any regulations pertaining to short term rentals.
      2. Comply with the regulations. If it’s a Megaworld development you usually just have to fill up a move in/out form for each guest. Note that some properties (usually Ayala or Rockwell developments) do not allow short term rentals.

      The apartment:
      1. Make sure it has the basics, cold AC, internet, cable tv, fridge, toiletries, etc.
      2. Figure out how you will give the guest the key (do you meet them, do they look for it in the mailbox, can you leave it at the desk).
      3. Figure out how you will get the key back before the guest departs.
      4. Figure out who will run to the apartment when an emergency happens. Sooner or later something will happen that you will need to rush over to the apartment to fix. Sometimes it can be minor. Just last night I had to go to one of our apartments because a guest couldn’t figure out the TV. Sometimes it will be major. One time our water heater burst in the middle of the night, threatening to flood the room if we didn’t act quickly.

  6. Very helpful article.
    May i ask the percentage of the tax you file? Is it like car rentals that usually pay 3%? Thank you very much!

    1. Honestly I’m not familiar with the 3% tax you mentioned, which tax would that be? We report our earnings as income so the applicable tax is the corporate income tax of 30% on gross income less deductions.

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