Everything you need to know about listing your home on Airbnb

If you've been thinking about renting out your space on Airbnb, here are five questions to ask yourself before you turn your space into an income property.

Your spare bedroom is nice enough, but it's not really doing anything, other than gathering dust. It might be time for your dead space to start pulling its weight.

Turning your quiet attic or abandoned craft room into an attractive income property and watching the Airbnb tourists roll in might seem like an act of financial genius. However, it's easier said than done. Before you put your space on the market and start counting that cash, ask yourself the following five questions. 

The first question to consider before putting your space on the rental market has to do with your goals. Knowing what you plan to do with your rental income will help you understand if it's worth the work you'll have to put in. If you decide it is, tracking your progress to that goal will keep you motivated when you face setbacks.

One obvious use of your rental income is to help offset your mortgage payments, but don't limit your options. Consider using the extra money to start paying down debt, saving for retirement, or building up a vacation fund for your own travels.

You're probably going to have to put some money into your space before it'll catch the eye of potential renters — and while most hosts account for the cost of a fresh coat of paint and an Instagram-worthy bed set, it's easy to forget that the costs don't go away once you put up the listing. Behind the scenes, you'll also need to clean in between guests or pay a cleaning service to do it for you.

Then there's insurance. If something happens to your property and it can't be rented out immediately, you'll want to be protected. Since the legality of short-term rentals in Canadian cities is still up in the air, it's unlikely that your home insurance will cover damages caused by a visitor. Platforms like Airbnb do offer liability insurance, but before you rent, call an insurance agent to see whether there's extra insurance outside of what vacation rental websites make available.

If you live in a high-demand area, you may have no trouble finding people who want to rent out your space. If you don't, you'll have to ask yourself whether you have a place people are going to want to stay in, or whether demand will be dwarfed by the work required.

Now's the time to add up all the advantages your place does have to offer and see how you might stack up against the competition. Are you close to transit or amenities? Do you live in a family-friendly neighbourhood? Is there a great local bar nearby? Can you afford to charge less than the rest?

Answering these questions will help you set your price, which in turn will help you determine if you're going to get enough of a return on your investment to keep moving forward with your income property.

Once you become a host, your life will change. This could be a good thing, especially if you like meeting new people from all over the world and experiencing different cultures right on your doorstep. But it also means the inevitable (and inconvenient) late-night or early morning phone call because the Wi-Fi is out or the toilet's overflowing.

If you're already overwhelmed with responsibilities and struggling to meet your obligations to your family and colleagues, ask yourself if your hectic life can accommodate adding in accountability to renters, too.

There has been backlash against short-term rentals in several Canadian cities, with calls to regulate companies operating in Toronto, Edmonton, and Vancouver. Some condo boards are also updating their bylaws to moderate Airbnb usage or to prevent illegal rentals. So, before you list your space, make sure you're not putting yourself on the wrong side of the law. Most city websites will have local information. If you own a condo, you can check the bylaws or ask a member of the condo board.

Renting out a room in your house or your entire space might entail some blood, sweat, and tears, but it also allows you to build equity in your property while forming fascinating relationships with your renters. Do some soul-searching and figure out if the effort is worth it. If not, there are plenty of other ways to meet your financial goals.