We looked into this as we have a home within 3 miles of downtown and Austin hosts multiple festivals/events (SXSW, ACL, Formula 1, etc.).
The thing that gave us pause was that while Air B&B and other services do have a generous insurance policy against something bad happening to your stuff (things getting stolen, damaged, etc.) their policy did not cover liability lawsuits/injuries that occurred in your home by a paying guest (at least at the time we looked into it). Likewise our homeowners policy and umbrella insurance policies were explicit in stating that if someone was paying to be in our home through a service like this, our policies wouldn't apply in the same way they would if it was a typical houseguest. That turned us off the idea since we have some steep stairs and a general aversion to being sued. Edited to add: Look at that! Their insurance policy now covers liability! It definitely did not when we looked into this several years ago. I would still recommend reading the fine print and making sure you feel good about the coverage, but its great to see liability is included.
Of course, the likelihood of a guest suing you is probably astronomically low, but that issue combined with the costs we estimated to secure valuables, buy guest linens, install a changeable electronic code lock, etc. made the whole thing not worth it for us. Our city would have also required a yearly permit to participate in a service like this.
If you do want to do it, look into the liability insurance portion.
