Are you looking to make money with Airbnb?
In this article, we will provide you with a comprehensive guide on how to earn money through this popular platform. Whether you have a spare room, a second home, or an apartment, Airbnb offers an opportunity to list your space and connect with people from around the world.
Let’s dive into the details and explore the various strategies for maximizing your earnings on Airbnb.
What Is Airbnb & How Its Work?
Airbnb is an online platform that connects property owners (hosts) with short-term renters (guests). Hosts list their property, including details like rental rate, photos, and amenities. Guests can search for properties and request to book a rental.
Reviews are left by both guests and hosts, helping to build a reputation. Hosts are only charged when a guest books a rental, and there are no monthly fees for using the platform.
How To Make Money With Airbnb
If you are interested in making money on Airbnb you must have a property available for rent, simple you’ll have to become a Airbnb Host. It can be a single room or a whole house. Some guests go for unique options like treehouses or tents, but this works best in tourist hotspots.
Additionally, owning a property is not a mandatory for earning money on Airbnb. You can generate a significant monthly income through alternative methods outlined in the guide below.
How To Become An Airbnb Host
Becoming an Airbnb host is a straightforward process. The website guides you through it by asking questions about your property or room.
The key steps include providing rental information, uploading photos, setting availability, establishing house rules, determining prices, and reviewing local laws. If you find any step challenging, Airbnb offers tutorials and guides to assist you in making informed decisions.
Once you become a host, you’ll receive booking requests. Before accepting, you can check the guest’s profile for ratings from previous hosts and communicate with them through Airbnb’s messaging platform.
Should I Become An Airbnb Host in 2023?
Airbnb relies heavily on hosts to provide properties, acting as a platform connecting travelers and hosts. The popularity of Airbnb has grown, leading to a shortage of available listings. As a Super Host, people have experienced high occupancy rates, even during peak months, with demand constantly rising. This presents a significant opportunity for prospective hosts to enter the market, increase their passive income, and benefit from the ongoing demand.
How Much Does the Average Airbnb Host Earn?
Insights on earning potential as an Airbnb host:
- The global average nightly stay is $137, while North America has the highest average at $208.
- Fully booked months with 100% occupancy are rare.
- Nearly half of hosts earn at least $500 per month, with an average of $924.
- Some hosts exceed expectations, such as Alexis Schroeder earning $2,000 in her busiest months, Kristen Sarah and Siya Zarrabi making $10,000 in their first month, and Susan and Boris Mordkovich earning an average of $5,000 per month.
What To Consider When Pricing Your Airbnb
Considerations when setting the price for your rental:
- Insurance: Have renters insurance to protect against litigation or property damage.
- Service fee: Airbnb charges a 3% fee on each booking.
- Taxes: Consult a tax professional for guidance on taxes and maximizing write-offs.
- Utilities: Account for water, electricity, internet, trash, and gas expenses.
- Cleaning fees: Factor in cleaning expenses and consider charging guests upfront.
- Emergencies: Have maintenance contacts for potential repairs.
- Supplies: Include the cost of soap, toilet paper, and cleaning supplies when pricing your rental.
Who’s Eligible To Become an Airbnb Host?
Key requirements for Airbnb hosts:
- Follow proper sanitation guidelines for COVID-19.
- Provide essential amenities.
- Respond to booking requests promptly.
- Maintain a high customer rating.
- Comply with local hosting laws and regulations.
- No recording devices in bedrooms/bathrooms without consent.
- Clearly mark fire escape routes.
Who’s Not Eligible To Become an Airbnb Host?
Considerations before signing up as an Airbnb host:
- Check your lease agreement for subletting restrictions.
- Some buildings or communities limit rental nights or specific floors for vacation rentals.
How to Start an Airbnb Business (+ Co-Host) & Make Money
Starting an Airbnb business requires time, effort, and investment. Here are the key steps to begin your Airbnb venture.
Step 1: Obtain necessary permissions
List your space on Airbnb, no matter how small or unique. Just ensure you describe your place accurately, including any unique features like narrow doorways or rustic staircases, to set clear expectations for guests. Get permission from your landlord, co-op board, or homeowners association if needed (for Co-Host). Read your lease for any subletting rules.
Before you start hosting, research the local laws and taxes that apply to short-term rentals in your area. While Airbnb doesn’t provide legal or tax advice, they can assist you in finding information about hosting regulations.
Step 2: Prepare your Airbnb space
Whether it’s a room with a shared bathroom, a separate wing with its entrance, or your entire home when you’re away for the weekend, you’ll need to invest in the space.
Invest in keyless lock for easy check-in. Add amenities like fridge, microwave, and Keurig for guest comfort. Create privacy with a wall or separate furnished TV area. Provide essentials: clean sheets, towels, toilet paper. Budget for higher utilities, arrange cleaning between reservations. Consider compensating co-host, factor in taxes and Airbnb fee.
Step 3: Determine your pricing
Consider affordability, your target audience, and the market.
Most hosts are charged a 3% fee on the booking subtotal. This fee may be higher for Airbnb Plus hosts, hosts in Italy, or those with strict cancellation policies. The listing price seen by guests is higher than your earnings.
Airbnb provides metrics that compare your nightly prices with other listings in the area. Use this information to determine when to adjust prices based on demand or specific days of the week. Setting minimum stay requirements can help offset turnover costs (cleaning and maintenance). You may also consider charging for additional guests or extra services like cleaning, equipment rental, pet-friendly accommodations, or tours.
Airbnb charges guests before arrival and sends your payment through your preferred method (PayPal or direct deposit) within 24 hours of guest check-in. Cash payments are not accepted. Visa, Mastercard, American Express, Discover, debit cards, Apple Pay, Google Pay, and PayPal are accepted.
Other factors that can impact your earnings include weekly or monthly discounts, weekend or seasonal pricing, payment arrangements for co-hosts, and value-added tax (VAT) in certain non-U.S. locations.
Step 4: Create your listing
Compose a truthful description; avoid exaggeration or omitting details about any issues. Showcase unique aspects of your space to distinguish it from other listings. Specify accessibility amenities that facilitate guest mobility within the space. Incorporate high-quality photos to provide a clear understanding of the space’s dimensions and characteristics.
Step 5: Consider hiring a co-host
Consider having someone else assist you with the following:
- Managing emails and communications.
- Handling repairs or on-site requests.
- Addressing urgent matters.
- Providing guests with neighborhood-specific tips.
- Streamlining the check-in process.
Include your co-host in your listing (up to three are allowed) and ensure they are familiar with Airbnb’s Co-host Terms of Service. You and your co-host can decide on their payment for each reservation. If you’re unable to find a reliable co-host, third-party companies are available to assist hosts with inquiries, cleaning, and other tasks.
Step 6: Explore hosting an Airbnb experience
If you’re unable to rent out a home, you have the option to host an Airbnb experience instead. Airbnb Experiences is a service provided by the platform that connects guests with knowledgeable hosts who offer unique, locally-focused activities. These can range from yoga classes near the Eiffel Tower to surf lessons at Venice Beach, a Harry Potter walking tour in London, or a pasta-making class in Rome. Keep in mind that Airbnb experiences may not be available in every city.
As a host, you have the flexibility to choose your own schedule, determine how frequently you can host, set the group size you can accommodate, and establish your rate.
To get started, you’ll need to submit an application to Airbnb, which will review both you and your proposed experience. Typically, Airbnb responds within a week. Depending on your local regulations and whether your activity qualifies as a business, you may need to register as a business or obtain a business license. Be sure to comply with any legal requirements if your planned experience involves alcohol, food, or transportation.
How much can you make owning an Airbnb Business?
On average, US Airbnb hosts earn over $9,000 per year, but earnings vary. Your potential income depends on your rental price, occupancy rate, and investment in furnishing and maintenance. With millions of listings worldwide, hosting is typically a part-time gig. Manage profit expectations realistically if you can’t commit significant time and effort.
To improve your hosting reputation, focus on creating a beautiful, functional, and comfortable space, promptly addressing guest concerns, and providing excellent communication. Positive reviews enhance search rankings, leading to more bookings and higher earning potential.
How much are Airbnb taxes?
Airbnb taxes include sales tax and income tax. Sales tax may be required by your city, and you’ll need to inform guests of the amount. Income tax is applicable, and you must report your Airbnb income and expenses on your federal tax return. Airbnb provides a Form 1099-K for earnings over $600. Deductions can be claimed for expenses such as mortgage/rent, utilities, property insurance, repairs, and cleaning services.
How to Make Money with Airbnb without Owning Property
There are several ways to make a substantial income, even without being a Airbnb homeowner. Online data suggests that Airbnb business owners can earn around $100,000 or more per year through various means such as co-hosting and offering vacation rental consulting.
Here are the top 10 ideas on how to Make Money with Airbnb without acquiring a property:
1. Airbnb Rental Arbitrage
Airbnb rental arbitrage involves renting a property solely to sublet it on vacation rental platforms. To make it profitable, your earnings must exceed the rent and expenses.
However, it’s crucial to consider local laws and obtain landlord permission, as some cities prohibit subletting. The advantages include starting with minimal capital and keeping 100% of your income. Downsides include stricter regulations and the challenge of finding a willing landlord.
How much you can make from Airbnb Rental Arbitrage?
Earning potential depends on location and property size, with potential profits of at least $2k per month. Promising markets for rental arbitrage include Savannah, Charleston, New Orleans, Nashville, and Jacksonville.
2. Become A Airbnb Co-host
Becoming an Airbnb co-host is a good starting point for newcomers in the industry. Co-hosts assist hosts with tasks such as bookings, guest communication, check-ins, inspections, cleaning, maintenance, restocking, and guest reviews. Pros include flexible working hours and not needing a license, but it’s less profitable than being a host, and income may vary.
How much you can make as a Airbnb Co-host?
Co-hosts typically earn 10-20% per booking, so if an Airbnb generates $30,000 annually, you can expect to earn around $3,000-$6,000. Taking on additional responsibilities may increase earnings to approximately 25% per booking.
3. Short-term Rental Property Manager
Becoming an Airbnb property manager offers a straightforward way to earn money without owning a vacation rental. The industry’s growth has increased the demand for property managers, who enjoy flexible working hours.
Key responsibilities include owner management, bookings, guest communication, check-ins, marketing, property inspections, and maintenance coordination. Understanding your state’s legal requirements is important, as some may require licenses. Although not mandatory, furthering your property management education can give you an edge. Pros include flexibility and not needing your own property, while cons include potential education expenses and managing multiple rentals. Using vacation rental software like iGMS can automate tasks and streamline operations.
How much you can make as a Property Manager?
The average pay for a short-term rental manager in the United States is $43,168, with income typically ranging from $34,067 to $54,398.
4. Airbnb Consultant
To help other entrepreneurs succeed in the Airbnb industry, you can become an Airbnb consultant. With experience in managing rentals and marketing skills, you can assist hosts in maximizing bookings, improving rankings, and even facilitating property transactions. Identifying a specific niche is crucial for success. Minimal startup costs and the ability to position yourself as an expert are advantages, but prior hosting experience and self-motivation are essential.
How much you can make as a Airbnb Consultant?
On average, Airbnb consultants earn $60,580 per year in the United States, with senior consultants making around $82.46 per hour, 62% higher than the national average.
5. Vacation Rental Franchise
To make money with Airbnb without starting from scratch, joining a vacation rental franchise is an option. By paying a fee, local property managers can obtain a special license from an existing franchise owner, allowing them to use the brand name and resources. Pros include access to established processes, defined and protected territories, and training with ongoing support. Cons include limited control due to franchisor branding guidelines, an initial fee requirement, and a contractual commitment.
How much you can make from Vacation Rental Franchise?
Income varies based on the chosen franchise program, with fees ranging from $55,000 to $100,000. Consider the brand’s reputation and whether the affiliation will yield sufficient profit to cover expenses when selecting a program.
6. Airbnb Cleaning Service
Starting an Airbnb cleaning service can be a profitable venture as hosts often outsource this task. Research industry standards, requirements, and costs in your state. Expenses include cleaning products, equipment, labor, and marketing. Pros include a steady stream of work and lower startup costs compared to acquiring a franchise. Cons include the need for marketing and finding a reliable team.
How much you can make from Airbnb Cleaning Service?
Airbnb cleaners in the US earn an average hourly rate of $18, 41% higher than the national average. Self-employed cleaners aim for a minimum of $25 per hour. Monthly earnings range from $900 to $7,583, with potential for significant profits.
7. Airbnb Copywriter
Offering copywriting services is a non-trivial way to make a profit without renting an Airbnb property. Advertise on platforms like Upwork and Fiverr. As an Airbnb copywriter, you’ll write catchy titles, engaging property descriptions, and more. Pros include flexible hours and low upfront investment. Cons include self-motivation and self-marketing.
How much you can make as a Airbnb Copywriter?
On average, an Airbnb copywriter earns around $90,000 per year.
8. professional Airbnb photographer
Becoming an Airbnb photographer is a creative way to earn income. You can become a freelance marketplace photographer or advertise on platforms like Fiverr, Upwork, or Instagram. Pros include flexible hours and opportunities to travel. Cons include expensive equipment and self-marketing.
How much you can make as a Airbnb photographer?
An Airbnb photographer can earn an hourly rate of $40 to $68 and an average of $50,000 per year.
9. Host an Airbnb Experience
Hosting an Airbnb Experience allows you to earn money without renting out a property. Airbnb Experiences offers a platform for hosts to provide various activities, such as tours, cooking classes, or art classes. Pros include sharing your passion and offering online experiences. Cons include potential licensing requirements and expertise in your chosen service.
How much you can make by Host an Airbnb Experience?
As an Airbnb Experiences host, you can earn $25 to $150 per guest, and top hosts have made over $20,000 after transitioning to online experiences.
Airbnb vs. Competitors
While hotels are Airbnb’s primary competition, there are other websites and apps that can be considered alternatives. Here’s a comparison:
Airbnb vs. FlipKey
FlipKey is Tripadvisor’s rental platform. While not as user-friendly as Airbnb, it offers around 830,000 rentals and relies on Tripadvisor member reviews for credibility.
Airbnb vs. Vrbo
Vrbo (Vacation Rentals By Owner) has been around longer than Airbnb, with about 2 million properties compared to Airbnb’s 6 million. Although Vrbo has improved, Airbnb’s platform is still more convenient for booking and hosting.
Airbnb vs. Couchsurfing
The key difference is that Airbnb is paid, while Couchsurfing is free. Hosting couch surfers on Couchsurfing can give you a taste of having guests before listing on Airbnb. However, Airbnb provides an easy and supportive experience for new hosts.
What Are The Risks Of Airbnb?
Investment properties come with risks like vacancies, nonpayment, and repair costs. Plan ahead to handle these issues. Short-term rentals require business insurance for liability protection. Be prepared for vacation rental regulations and consider transitioning to long-term leases if necessary. Allocate funds for unexpected expenses and reinvest profits for business growth or mortgage payments.
When is a Traditional Lease a Good Option?
Dependable tenants ensure consistent monthly rental income. Traditional leases require lower initial investment and don’t involve furnishing the property. Accessing management services is easy and cost-effective. There’s low risk of regulatory restrictions for traditional leases, as long as the property meets city requirements.
Is it worth it to invest in Airbnb?
Investing in Airbnb can provide passive income and is suitable for beginners. However, remember that not all real estate investments are Airbnb properties.
What percent does Airbnb take?
The fee charged to guests is typically less than 14.2% of the total booking cost (including the nightly rate, cleaning fee, and additional guest fee if applicable, excluding Airbnb fees and taxes). The exact amount depends on various factors and will be displayed during checkout for transparency.
In the conclusion, we will summarize the key points discussed throughout the article and emphasize the potential of making money with Airbnb. We will encourage readers to take action and embark on their journey as successful Airbnb hosts.