Renting out a room in your home on Airbnb brings the world to your door and can be lucrative. Some millennials are counting on Airbnb income to help them pay for their first home. For homeowners over 50, Airbnb might just be what helps them hang onto their homes. Either way, hosting through Airbnb or a similar home-rental company is a business, and like every successful business, a well-thought-out strategy is needed.

Hosts in more than 465,000 U.S. homes, including condos and apartments, had Airbnb guests last year, according to the company. The guest wish-list includes homes in Savannah, Ga., the Florida Keys, and Hood River, Ore., among many other places. Some people rent out their whole house or apartment for short periods; others offer a private room, a shared room, a carriage house, or even a tree house nestled in the woods. New homes are being built with income-producing space included, says Bobby Berk, a designer of interiors and products. He’s working with builders to create these homes in Las Vegas. Here’s what Berk and other designers suggest doing if you’re thinking about becoming an Airbnb host.  

The ABCs of Airbnb

Learn the Ins and Outs of Airbnb
Listing your space is free. Airbnb collects a 3 percent host service fee per reservation and handles all payments. Guests pay before they arrive. The company makes it clear how hosting works and the standards it expects. Guests can rate their experience, and the reviews appear on your listing page. Remember, they're picking your home over a hotel, whether it's for an authentic experience, hospitality, or to save money. 

Find out What Local Laws Allow
Some local governments don't allow short-term bookings, plus enforcement varies and may include fines. Before you list your space, you may need to register or get a permit or license. This list of cities from Airbnb spells out their various regulations. Find out whether hosting is allowed in your area, and check your lease or the regulations of your homeowners’ association or co-op board. 

Figure Out Who Your Guests Are
Whom does your neighborhood and home appeal to, and why are they coming? A family of tourists, business travelers, or an artist looking for a quirky place to explore will have different needs and expectations. Is public transportation available? How good are the restaurants, and are they for big-spenders or the budget-conscious? All of this will help you determine who is likely to be your guests. Also decide whether you want your guests to stay for a few days or a few weeks.

Estimate What You Can Charge
Check out your Airbnb competition and see what they’re offering and charging, then tally up how many days per month and year you hope to rent your space. Airbnb suggests that first-time hosts consider lowering the rate to encourage bookings and gain experience. Once you’re a host, you can access an Airbnb tool that sets a price factoring in similar spaces and travel trends. And note that some hosts charge a one-time cleaning fee or extra-guest fee, and then there are taxes.

Consider Your Budget
The space must look inviting online to your market and be clean (that includes any space guests can access). Airbnb says the terms most frequently searched are pool, WiFi, pet-friendly, free parking, family-friendly, and kitchen. Figure out how much you need to spend to make your place a hit on Airbnb. Clean bed linens and towels are expected, along with toilet paper, soap, and other essentials. Airbnb urges hosts to install smoke and CO alarms in the listed space—and some municipalities require them. If you don't have detectors, you should mention that in your listing’s description. “If you have to spend more money than you can make in a couple months, why do it?” Berk says. “It has to look good, but first figure out your budget.”

Spruce Up the Space
Use neutral colors for wider appeal and dashes of color to keep it interesting. If you’re renting out more than a room, paint the entire area the same color so it’s easier to do touch-ups all at once. The idea is to always keep your market in mind and what your guests expect and would like.