Just between last year and the previous one, the number of Airbnb bookings in Wisconsin grew almost 100 percent. While most of the 40,000 Wisconsin hosts live in Madison and Milwaukee, even residents of smaller towns open their homes to paying visitors. If you’ve made plans to join the thousands of room-sharing hosts in this state, make sure you also make plans to run your business the right way.
Tips to Start Your Wisconsin Room-Sharing Business the Right Way
Most hosts use one of the popular room-sharing companies, like Airbnb, to help them connect with guests and to handle payments. Even if you work with one of these companies, you still aren’t considered one of their employees. You’ll be working as a self-employed businessperson, and as such, you have to take responsibility for the way that you run your business.
When you begin any business venture, you should make a plan. Browse this list to make sure you understand some of the most important things you should include in your business plan:
- Licensing and/or taxes: In some cases, the state and local government may not view your home-sharing business that much differently than running a motel or guest house. You need to learn if you need to get a license and file taxes upon your income.
- Neighborhood and building rules: Do you know if your neighborhood or building management has rules that govern room-sharing rentals? If you’re not sure, you’d be prudent to ask before you get a letter in the mail that includes warnings or even fines.
- Security: Some sensible security measures you might consider include fire extinguishers, good locks, a security system, and posting house rules and emergency contact information. You may need to take some of these steps for licensing and insurance, and in any case, they can help you reduce the risk of having problems with guests.
- Insurance: Don’t count on a typical homeowners insurance policy to protect you against damages or liability claims from paying guests the same way it protects you and your family. Most homeowners insurance policies will limit coverage for paid guests, and some companies won’t cover them at all. Airbnb includes their own limited coverage in every booking, but many other room-sharing companies don’t offer it at all. Even if you use Airbnb, you still need to tell your primary homeowner’s insurance company about your plans to rent rooms and learn about gaps in protection.
- Valuables: If you have heirlooms, cash, or even personal information in your home, you need to protect them. While most hosts have had reasonably good experiences with guests, some people have opened their homes to people who acted irresponsibly or even criminally. You should consider safely stowing valuable and personal items away from strangers.
Who Helps Room-Sharing Hosts Plan to Protect Themselves?
If you’re relatively new to running a room-sharing business, you can turn to Frydach Insurance for all kinds of advice and assistance. The professionals here can help you understand what kind of coverage you need to protect yourself. An agent can also give you good advice about other measures you can take to help minimize the risk of losses.
Between having the right insurance and taking sensible steps, you can run a profitable room-sharing business. If you ignore the basics, you’ll probably take a risk that you cannot afford.