Starting an Airbnb Business in Kenya

Starting the business

Starting an Airbnb business in Kenya is easy. This is because the Government has set up measures encouraging real estate investments in Kenya.

First, you have to register as required by the Kenya Tourism Regulation Authority (KTRA).
Second, you have to be inspected and licensed by KTRA before you can begin operating as an Airbnb host for security purposes.
You have to pay a one-time initial registration fee and annual license fees to KTRA, among other fees required for licenses.
There are also other contracts and rules that Airbnb hosts should look out for. These include their lease agreements, protocols that tenant organizations set, the Government as well as property policies.
Airbnb hosts should also ensure they have active insurance. This is for coverage such as damage protection and liability insurance.

Types of Airbnb rentals in Kenya

There are different types of Airbnb rentals here in Kenya. They include:

1. Apartments

This is where you find most Airbnb spaces. For apartments, owners can choose to rent their apartments as Airbnb instead of leasing to tenants. Also, hosts can rent or lease single units in the apartment and then use it as an Airbnb, where they rent to clients charging per night.

2. Houses

Investors build homes, especially in gated communities, for the sole purpose of using them as Airbnb. Also, sometimes homeowners who are looking to sell their homes opt to rent them for use as Airbnb.

3. Unique stays

These include vacation rentals. For example, villas, cabins, cottages, private and shared rooms. People mostly look to stay in these while on vacation.

Factors to consider when starting an Airbnb business

1. Location

To ensure you are chasing success in the Airbnb sector, you have to consider the location in which you set up your business. It is advisable to consider areas that experience a lot of human traffic. For example, the Coast, areas near the Masai Mara, Areas within Nairobi, which is Kenya’s capital, and areas that tend to host seasonal events such as the WRC in Naivasha. These areas have a high demand for accommodation because of tourism and this ensures that your business is moving all year round.

2. Amenities

Also, consider factors such as amenities. The properties you rent out should have proper drainage and sanitation, air conditioning, electricity, an internet connection, work-friendly and safe environments, etc. Also consider how close they are to hospitals, towns, and roads, among other infrastructure. This puts your business in a more likely to thrive position.

Nairobi has the highest number of Airbnbs in Kenya. Areas such as Kilimani, Kileleshwa, Westlands, etc are especially very popular when it comes to Airbnb. This is because not only are they fancy, but are also secure, and close to the CBD. They cater to tourists and businessmen/women who are operating within Nairobi. Areas on the coast such as Kilifi, Diani, and Watamu follow suit. They experience high tourism all year due to the fair coast weather and therefore a good opportunity for Airbnb owners to make profits. The top-rated vacation Airbnb in Kenya is a villa in Diani.

‍

Legal and regulatory considerations for Airbnb in Kenya

To operate freely as an Airbnb owner in Kenya, some certain licenses and permits are required.

First, you need to register your property (Apartment, flat, villa, hostel, etc.) with the Kenya Tourism Regulation Authority (KTRA). First-time owners pay an application fee of KES 1000. The annual license for a serviced apartment, for example, goes for Ksh 26000. Also, KTRA handles inspection and licensing.
Also, you need a Single Business Permit from the County Government, which is mandatory for all businesses. This can cost about kes 10000.
You will also incur other costs, which include a NEMA (National Environment Management Authority) license fee, and a Digital Service tax of 1%. Also, for limited liability companies, hosts will be required to pay a 16% VAT tax.
Other than that, an Airbnb host will need documents such as a copy of your rental or lease agreement. Companies will require a registration certificate, a memorandum, etc. You will also need documents to show that you comply with KTRA. Remember to keep your tax receipts because they are important when doing expense deductions on income tax.

Airbnb owners are required to pay taxes on their rental income. Income from Airbnb and furnished apartments between kes 288,000 to kes 15 million per month is taxed 10% on the gross rent received yearly, monthly, or quarterly.

Creating a compelling Airbnb listing in Kenya

When listing your Airbnb, it is important to include a very detailed description of the property so that your clients know what to expect. It is also important because it makes it easy for clients to make a good choice for their stay. It is also important to include unique features available in that particular property that will encourage clients there. Also don’t forget to mention local experiences that clients can be able to enjoy while staying there.

Remember to use clear high-quality quality and appealing images that capture the details of the property. Showcase clearly all parts of your property. Do not leave out anything as this will show that you’re an honest and credible host.

Also, due to the fact that Airbnb is very popular now in Kenya, it is important to set prices that are fair and competitive at the same time. Find out what other similar properties in the area charge and base your pricing on them. It is however important that you assess your property value because they cannot all be the same. The average cost of Airbnb in Kenya starts from $20 and increases based on the location, luxury, etc.

Managing your Airbnb in Kenya

As an Airbnb owner, you need to stay ready and always on your toes. Ensure you are communicating with your guests or potential guests all the time. Respond to inquiries on time. This ensures that you do not lose clients to other owners because of your unavailability. Once you secure your client, you must give clear instructions on what is required of them as well as other policies set in place. This allows for a professional relationship with your guests.

Also, as a host, you have to perform background checks or screening. You need their details such as names, Identification or passport, age, etc. You can also check their data against public records to check for criminal records. Guests and their luggage should be checked before they check-in. This ensures they do not bring in illegal substances or perform illegal operations. Due to the increasing theft rate, they should also be checked before they leave to ensure no one steals.

Being transparent about what your property has to offer will help manage guest expectations. Offering quality services to your guests should be your only concern. Simple things such as extra pillows, towels, and clean sheets can charm your guests and increase your rating.

Conclusion

Key points

Register with the Kenya Tourism Regulation Authority (KTRA).
Acquire the necessary licenses and permits such as a single business permit and pay all the necessary registration fees.
File your income taxes on time. Also, obtain all the necessary documents e.g lease agreements.
Consider locations with good amenities, security, and infrastructure.
Use high-quality photos for your listing and give clear details of your property to manage guest expectations.
Approach screening your guests for security purposes.

Conduct further research before starting an Airbnb business. Analyzing the market will help you make better-informed decisions before you start the business.

FAQs

Q: Is it legal to operate Airbnb in Kenya?

A: Yes. With the required permits and licenses, you can run a successful Airbnb business.

Q: How much can I earn with Airbnb in Kenya?

A: The amount of money you make from Airbnb will depend on the location, the type of property, and how much you charge.

Q: What are the tax implications on Airbnb in Kenya?

A: Airbnb hosts are required to pay taxes on their rental income. There is a 10% tax on income ranging from kes 288,000 to kes 15 million whether paid annually, monthly, or quarterly.