How to make money from airbnb

Here’s a little information about me: My name is Jerry Xiong and I am a Super Host with 9 listings in Columbus, OH. I am a millennial who graduated from Ohio State and was a real estate agent before moving to Los Angeles. While I’m not the largest Airbnb host by any means, I believe many people looking to get into the Airbnb business are similar to myself.

Jerry Airbnb Host

Within 2 years I have amassed over 500 five-star ratings and generated a six-figure income with a minimal investment in both time and capital. I’ll go over the various steps I took to acquire the properties as well as tips on managing the properties remotely so you can still keep your day-to-day job.

If I can manage my Airbnb listings from across the country, you will be able to manage it while having a full-time job if you choose!

In This Article

What is Airbnb?

Airbnb began in 2008 as an online marketplace to arrange lodging between individuals looking to rent out their space and those looking for accommodations.

It seems like a lot of work to manage an operation that is effectively a mini motel. The truth is, you don’t have to have experience or a ton of capital to get started. The sharing economy is in its primitive stages right now and if you get in on this side hustle while the market is yet to be saturated, you can build a nice nest egg for your journey towards financial independence.

How Does Airbnb Work?

Have you ever wondered how people are renting their apartments or homes on Airbnb?

The business model is very simple: individuals like yourself have extra space in their property and want to utilize it in a way to subsidize their cost of ownership, just like house hacking. Travelers need an affordable place where they can rest for a quick trip to town or an alternative option to corporate housing if they need longer accommodations.

Airbnb was created with a sharing economy in mind – it started out just as a small startup in San Francisco but is operating more listings than the largest hotel chains in the world!

Should I Become an Airbnb Host?

Where do you fit in this equation?

Airbnb is almost completely dependent on potential hosts like yourself. The company itself does not hold any property and effectively acts as a middleman to connect travelers with hosts. Over the past few years, the popularity of Airbnb has continued to rise resulting in a shortage in inventory on Airbnb. As a Super Host myself, I have seen my occupancy rates shoot up to over 90% during peak demand months! Even as I increase the price of my listing to allow my cleaners some rest time and allow for renovations, it seems like the demand never stops.

This indicates a HUGE opportunity for prospective hosts to capture their piece of the pie and increase your passive income.

Airbnb – Become A Host

Price: Free to List

List your space, set your terms, then start earning easy cash by hosting qualified guests.

List Your Space

How To Make Money With Airbnb

Now that I have your attention, I want to run through the financials of operating an Air B and B. One of the most important things to do before you tackle any side hustle is planning your business. Of course, don’t be too risk-averse but you need to take calculated risks to achieve maximum profitability as well as ensure success.

Make sure your market has demand for your listing. Don’t try to rent a fancy mansion in the middle of nowhere. You need to understand your market and make sure you can cover the expenses you incur.

Traditional Lease vs. Short Term Airbnb Rental

The example will assume we are financing the property, but if you need a low capital venture you can rent the property. Of course, you will need permission from the landlord but if you can pitch your proposal correctly most landlords will allow it!

Airbnb as a Real Estate Investment

Here’s where “other people’s money” comes into play. When you acquire an investment property, you will generally put 15-25% down. If you want to apply for a mortgage as a primary resident (this works extremely well if you want to maximize your return by living in one room and leasing out the others) you may even only be required to put as low as 3.5% down using an FHA loan for a property up to 4 units. By leveraging your debt capacity, you will be able to effectively invest more money than you would otherwise be able to.

Still, need convincing? In this article, Grant goes over how you can create a real estate empire. You can also get some more detailed information regarding the specifics of stepping into real estate investing (avoiding PMI, expansion, etc).

Airbnb vs. Traditional Leasing: Case Study

Traditional Tenant Revenue

What’s the Return on Investment?

What…? That’s it?

If you’re thinking that’s a bit low and you’re 100% right. The return of 10.42% is not our actual return.

Remember those 12 monthly payments we made? Each one of those payments has unrealized principal included in them. That means if we were to sell the house, our basis would be the balance minus accrued capital cost reduction! In simple terms: we’re paying off the house by making these payments! In addition, if you file your property on your taxes as an investment property your CPA will be able to deduct interest expenses, depreciation, and other costs from the total revenue generated by the property.

If you aren’t a tax wiz and need help, there are CPAs that specialize in offering sharing economy accounting. Disclaimer: I haven’t used them but from my communication with them I think they can be a resource.

Unrealized Gain and Tax Opportunities

This will yield a much higher return than 10.42%, which will make it a significantly more attractive investment opportunity. Note: Bear in mind that most mortgages will be amortized, this means that your principal/interest spread will be heavily skewed towards interest during the early stages of the loan (you may be paying mostly interests for the first few years of the mortgage). This is to protect the bank and reduce their risk. Sneaky, I know.

Please note: these numbers are all estimates. They may differ in your market but for most areas outside of large cities, I have found these numbers to be indicative of the rental market. Another factor you must consider before considering acquiring a rental property is your personal career mobility. There are large transaction costs associated with selling a house (realtor fees, funding, closing costs, etc) so when you are analyzing an opportunity you must be cognizant of this risk.

How Does an Airbnb Rental Compare?

Using the same property as an example for our short-term analysis we start by considering our market. Use tools like AirDna or Airbnb search listings to check for comparable properties in your area. We will list our example as a shared house with private rooms. Simply check the map function in your area with a filter set for private rooms to check out nearby listings. Look at the reviews as well as the availability of the properties you’ve selected as comps.

Identify Your Comps

To ensure the most accurate comps, you need to make sure the properties are actually similar in terms of amenities, cost, and location. Once you’ve determined the average nightly rate, you need to check out their calendars to see if the cost is actually representative of what is listed. Check their calendars and look for discrepancies in pricing (some hosts will put a specific date at a very low price just to have Airbnb list a price that is not bookable).

Now that you have an average daily rate, we can move on to the financial analysis going on the short-term rental path.

Estimating Airbnb Operation Costs

Additional Expenses of an Airbnb

How many times does an Airbnb listing get cleaned each month?

Airbnb Utility and Supply Cost

Another expense that you must account for is the cost of supplies. Air b and b owners must provide sheets, towels, soap, and other essentials to their guests. We can just put aside 10% of each month’s revenue towards expenses.

Is Airbnb Profitable?

Here is the incremental cash flow from short-term rental conversion:

Airbnb Revenue

Wait a minute….Airbnb is profitable!

I bet you’re now interjecting in your mind: but there must be large amounts of time required to run an Airbnb! There must be more risk involved when it comes to short-term rentals!

I will now give you a rundown on why I think a planned short-term rental is actually LOWER in risk and time requirements than traditional rentals.

When is a Traditional Lease a Good Option?

Dependable Renters – once you carefully vet your potential tenant and run their credit you can generally expect a monthly rental check to come in. In high-demand areas, you will have the next set of tenants in place before the first ones move out! You can plan aggressively throughout the year using projected cash flow from your property.

Low Initial Investment – unlike short-term vacation rentals, your initial investment will be lower. You do not have to provide furniture for most traditional leases. You just hand them the keys and start making money!

Easy access to management – Long-standing management companies are abundant in most areas. Finding a qualified management team will not be an issue for traditional leases. Given this competitive landscape, you can also be sure that your management cost will not be exorbitant.

Low risk of regulation – Most properties are approved for traditional leases. You don’t have to worry about not being able to rent out your property when it comes to the city. As long as your property passes city inspection and follows code a shutdown order is extremely unlikely.

3 Reasons to Become an Airbnb Host

High potential revenue – as we can see from our financial analysis, the potential income of a short-term rental is significantly higher. If you’re able to correctly operate your business your return will be magnitudes higher than a traditional lease.

Low variance revenue– A misconception that many new hosts have is that there is a huge risk when it comes to making money, especially in the starting months. Short-term rentals are actually a LOWER variance route than traditional leases. This is because your average occupancy will not fluctuate nearly enough throughout the year if you price your listing correctly. In a traditional lease, if you are unable to rent out the property for a month you will lose 1/12 of your yearly income! A bad month for Airbnb would just result in a 10% loss in your monthly revenue.

Less damage and wear on your property – you heard that right. I just said that short-term rentals result in LESS damage and wear on your property than traditional leases. Hear me out: short-term rentals require your property to be constantly turned over. Any damage will be immediately identified and sorted out through you and the guest. The guests do not stay long enough to inflict sustained damage (ever seen those bathrooms where people don’t turn on the vents?). Any small damage is settled between the host and the guest or by the Host Guarantee.

Part-Time Airbnb Listings

While I would recommend most people go the short-term rental path at this moment, you can also consider a mixed approach with it comes to renting out your property. If there is a cap on the total amount of days you can rent your property out on short-term rental platforms, this may be a way to capture the best of both worlds.

One example: some cities have proposed a cap on the total amount of days that one can rent their properties out. Many hosts thought this would be an end to the profitability of hosting but I’m here to tell you it’s not.

If you’re in an area that has a large student population, you can offer a 9-month lease. This is a highly sought-after lease in that most students will either go home for the summer months or have internships in other parts of the country. By offering a shorter lease that caters to their needs, you will be able to charge a premium. In addition, you will have furniture in place for short-term rentals in the off months. This will result in higher monthly rent as tenants would no longer have to incur transaction costs of moving large pieces of furniture!

Rent on Airbnb When Demand is HIGH

Additionally, you will be able to operate your short-term rental during the months with the most demand! Summer months have traditionally been the highest occupancy months for Airbnb. You will have a reliable stream of income during the low-demand months and still be able to capture the excess value in the months where short-term rental demand is at its peak.

For example from my own experiences, I have been able to charge a significantly higher daily rate during the summer due to the fact that people need a place to stay before moving into their long-term accommodation.

What Are the Risks of Airbnb?

As with all investment opportunities, you will need to understand there are risks that are involved. Investment properties are no exception.

With traditional leases, you will need to plan for periods of vacancy as well as potential nonpayment from your tenants as well as unexpected repair bills. A savvy investor needs to be able to plan accordingly to address any issues should they arise.

For short-term rentals, a host must secure ample coverage for operating a business. Do research to make sure you are protected when it comes to liability.

Have a plan if your city regulates the vacation rental market. Be ready to convert to a hybrid or traditional lease if it platforms like Airbnb become prohibited. Adjust your expectations and budget for any unexpected expenses and reinvest your additional profits back into the business via expansion or mortgage paydown.

Are You Ready to Be An Airbnb Superhost?

I hope this article has convinced you to consider becoming an Airbnb host. Sometimes you just have to tackle a challenge head first and take a risk. The sharing economy is here to stay and I want each one of you to join me in this adventure.

Airbnb is just one of the best side hustles and it’s easy to start making money with Airbnb. It complements other platforms like Turo and Uber. The freedom from a rigid schedule allows you to take advantage of any opportunity that arises. Thank you for reading and good luck in your journey towards financial freedom and early retirement.

Jerry Xiong runs a blog called SharingEconomySecrets where he helps new hustlers start their businesses. Learn how he integrated various opportunities to make a full-time income using apps like Airbnb, Turo, and Uber.

The Risks and Rewards of Making Money With Airbnb

Here’s how to make money and protect yourself from the risks.

Peer-to-peer short-term rental services, such as Airbnb, are becoming an alternative for many travelers. Some travelers are looking for the feel of a home away from home. Others are looking for accommodations that will cover large groups in one place. Many also look to short-term peer-to-peer rentals as a less costly option than the standard hotel room.

If you are thinking about getting in on the trend and renting out a room—or an entire home—here’s what you need to know first.

Key Takeaways

How to List With Airbnb

It is up to you to decide when to make your space available and at what price. Listing is free, and you can individually approve potential guests. In setting your price, you’ll want to consider the going rate in your area by looking at competing listings. You’ll want to consider the costs of hosting—including cleaning, higher utility bills, taxes, and Airbnb’s host fee, which is 3% for payment processing. Your guests pay Airbnb’s 6% to 12% booking fees. Make sure you understand Airbnb’s hosting standards for listing accuracy, communication with guests, keeping your reservation commitments, cleaning your place for each guest, and providing basic amenities such as soap and toilet paper.

You’ll want to clean and declutter your space before you photograph it to present it in the best possible light. In most cities, Airbnb will even send a professional photographer to capture your space for free if you’re an active host. When describing your place, think about what makes it unique, and try to consider it from an out-of-town visitor’s perspective. Is your place within walking distance of public transit? Is it located near great restaurants, nightlife, or cultural activities? What amenities can you offer: wireless internet, a fully stocked kitchen, cable television, an outdoor patio?

Your listing will be displayed on Airbnb’s website, and you can also cross-promote it through social media or your own website.

Legalities and Taxes

Before listing your place on Airbnb, you might need to get permission. If your property is controlled by a homeowners’ association or co-op, check its rules to make sure you’re allowed to host. If you rent, you’ll want to get your landlord’s blessing. Airbnb suggests adding a rider to your contract with any of these entities to specifically address hosting through Airbnb.

In addition, your locality might require a business license, and you might owe local taxes on any income you earn. For example, you might have to pay a transient occupancy tax, the same tax that applies to hotels. Hotels usually pass this tax onto their guests: You might recall the extra 12% that was added to your bill the last time you stayed somewhere. You can look up Airbnb’s information on many cities’ regulations.

You’ll also owe federal taxes on Airbnb income, which will be reported to you and to the IRS on form 1099. However, you may be able to reduce your taxable Airbnb income by deducting business expenses, such as cleaning fees and insurance.

Personal Safety

If you’re renting out your home when you won’t be there, you’re probably not at risk of physical violence. However, you’ll want to find a safe place to store anything of high sentimental or financial value. Your wedding dress, Grandpa’s gold watch, photo albums, your emergency cash, and your tax returns are all examples of things you’ll want to secure. Don’t give guests the opportunity to steal your possessions or your identity.

Things get trickier if you’re renting out part of your home while continuing to live there. You can keep a closer eye on your stuff (though you’d still be wise to safeguard it), but you’re physically vulnerable if your guest turns out to be dangerous. It’s not realistic to run criminal background checks on guests before they book or before they check-in; you can do some basic internet sleuthing, but it’s not a failsafe process.

Reviews from previous hosts can offer reassurance, and you can always decline a reservation or even cancel a booking, though in some cases, Airbnb will impose penalties. You can also limit the reservations you accept to guests who have completed Airbnb’s Verified ID process. Both hosts and guests can have Airbnb verify their identity by uploading a valid government-issued ID and connecting a Facebook, Google+, or LinkedIn account to an Airbnb account.

Airbnb Home Safety

Airbnb also provides guidelines for hosts to make their homes safer. If basic human decency doesn’t give you enough incentive to make your place safe for guests, minimizing safety risks to guests minimizes your risk of being sued by a guest who is injured on your property.

Guests also might give you lower ratings if you haven’t taken basic precautions to protect them, such as installing smoke and carbon monoxide detectors and eliminating or pointing out any trip or fall hazards. If you’re particularly negligent, Airbnb could refuse to let you continue to host.

Insurance and Liability

“Airbnb provides an option to procure a refundable security deposit, which is what I do for each guest,” says Deb Glassman, who has been renting out her Venice, California, home on Airbnb for the last four years. “In one or two situations where I have had to collect the security deposit for minor issues, Airbnb has always backed me 100% with the guest.” She adds that staying in the studio in the back of her house while renting it out seems to be an automatic deterrent to potential guests who might want to party.

Payment Guarantees

Is it possible for a guest to crash and dash—that is, to stay overnight in your place without paying you?

Guests actually pay you through Airbnb. As long as there are no problems, Airbnb will release your payment within 24 hours of your guest’s arrival, and you’ll receive it within one business day, if you choose to get paid via PayPal or via Payoneer prepaid debit card, within a few days for a bank transfer, or within 15 business days for a mailed check.

Guests must notify Airbnb within 24 hours of check-in if there’s a problem that warrants a refund. If you don’t respond to guests who try to contact you about a problem, they might be allowed to complete their reservation and receive a partial refund.

Airbnb could require you to refund a guest’s payment if you cancel a reservation at the last minute, forget to leave the key, misrepresent your listing, don’t clean your home, or otherwise fail to meet Airbnb’s hospitality standards. In your listing, make sure you describe your room type, number of bedrooms and bathrooms, and amenities accurately. If you choose to provide linens and towels, make sure they’re clean. Also, note whether there will be any animals on the property.

You could also get burned if you arrange payment with a guest outside of the Airbnb website. A guest might try to do this to avoid paying Airbnb’s guest fee or might be planning to rip you off. As a host, you only stand to save 3% by not going through Airbnb’s payment system, plus Airbnb could refuse to do further business with you if you get caught. So don’t try to circumvent the system.

Airbnb suggests making sure you’re available within 24 hours of guests’ scheduled check-in to address any concerns they might have since many problems are easily resolved.

Can You Make Good Money Hosting an Airbnb?

As with any sort of side business, success with Airbnb will depend on a number of factors including the desirability of your property’s location, its amenities, condition, and price point.

What Are the Best States to Host an Airbnb in the U.S.?

According to Airbnb’s own data, the following were the top 10 states to host an Airbnb in 2021, based on aggregate income (note that Airbnb incomes vary drastically within each state from city to city):

Which Dates Are the Most Profitable for Airbnb Hosts?

Airbnb data show that these were the highest income-generating dates in 2021:

The Bottom Line

The growing sharing economy offers ways to make extra income that weren’t available even a few years ago. Many of these opportunities require you to be comfortable navigating unclear local laws, sharing your most valuable possessions with strangers, and taking on additional legal liability. Airbnb is no exception, but if you’re willing to take on the risks, you could make thousands of extra dollars a year.

Bnb Duck Blog

I. Duckworth October 4, 2018 Host Tips

The rise of Airbnb has seen the average person turn their homes and other properties into a successful business with huge incomes. Even if you don’t own a home, you can still get in the game. In this guide, I will answer the burning question – how to make money on Airbnb without owning property?

You don’t need to own or even be renting a property to make money on Airbnb. For example, managing someone else’s property, co-host, become a cleaner, run an Airbnb experience or even become an affiliate.

I know of savvy people who are earning 6-digit salaries on Airbnb, despite not owning any property! I know this, because I have met them myself and picked their brains.

In this article I will show you the ways people are making money on Airbnb without owning property. In fact, I’ll show you 9 of the best ways.

There are so many options and you can make a lot of money if you’re thrifty. So let’s get right into it.

#1 Managing Properties

Property management could be a good option for you, especially if you are a time rich person. This way, you get get involved in Airbnb without the risk of investing in your own home.

It’s a great way to make money on Airbnb without actually owning any property. There are many people who want to list, but simply don’t have the time or the resources to look after their property. This is where you would come in.

So how does this work? The owner of the Airbnb will hire you to manage all aspects of the property. You will reply to guest messages, check guests in, top up amenities and turn the property over after each booking.

I think most people could live quite comfortably on a wage like this.

#2 Airbnb House Sitting

This is an interesting one. When travelling through Bath in the UK, I met a couple that go away every winter (I don’t blame them!) and gets someone to house sit and run their Airbnb.

Their listing is in their basement. The house sitter would live upstairs and the listing continued running while they were off sunning themselves.

The owners would work out a percentage depending on how many bookings they have and the house sitters get to live rent free for 3 months. Not a bad deal.

#3 Renting a Furnished House

A furnished rental could be your pot of gold. This option may appeal to you if you want to go the whole nine yards and run your own Airbnb, but lack the funds to do so.

A lot of times a furnished rental will come with everything you could possibly need to set up an Airbnb. Extra linens, towels, a fully stocked kitchen and even a washing machine.

Your start-up costs will be quite minimal with only the basics like shampoo, coffee and tea to provide out of your own pocket.

The only hurdle you will face will be getting the landlord to agree sublet their property as an Airbnb. You will also have to look into your local laws and regulations as some cities are cracking down on sub-lets.

But if you do your homework, there is definitely scope here to make money on Airbnb without the expensive start-up costs.

It’s definitely an interesting way to make money on Airbnb that many people are currently doing.

#4 Approaching Home Owners Looking To Rent

This tactic is similar to that of renting a furnished house as an Airbnb except this one doesn’t require you to take out a lease.

What you do here is approach a landlord that is looking to rent out their property. You would start a conversation with them about how they could be making two to three times more income renting their property out as an Airbnb.

This I’m sure will raise the eyebrows of the home owner and they will want to know more. This is where your offer to run their place as an Airbnb would come in.

You wouldn’t be renting, you wouldn’t have to pay any bills or outgoings, you would simply run their property as an Airbnb for them and take a cut.

In other words, all the rewards without the risk. The hard part is finding the right landlord. The best place to start is websites like Craigslist or Oodle where you can see people wanting to let out their properties.

Emailing or approaching the landlord is the next step. You could discuss an arrangement on the premise of making them a lot more money than a traditional long-term rental.

You will make money this way, but it requires a more hands on approach. You’ll need to wrangle the right property.

#5 Become an Airbnb Cleaner

I speak from experience here that one of the most time-consuming parts of running an Airbnb is the cleaning.

This is the #1 job that hosts will outsource which leaves plenty of opportunities to make some good money. Websites like Craigslist have a huge amount of people advertising for help, there is certainly no shortage of customers.

The pay rate of a cleaner varies greatly with each property. You can either set your own price per hour, per room, per property or per month.

To get a better idea of what cleaners in your area are making, have a look at a tool called Properly. Airbnb endorse these guys and they’re a great way to research your potential income.

So with a check-in/out window of around 5 hours, you could potentially clean 3 properties per day. A very solid income and a great way to make money on Airbnb without owning property.

In conclusion, you should check out my Airbnb cleaning checklist if you are interested in making money with this.

#6 Airbnb Experiences

Airbnb experiences are a creative way to make money on Airbnb that doesn’t require a huge amount of time or cash to set up. In fact, I have given you a head start. Check out my article on 11 great ways to make money with Airbnb experiences.

An example of an experience could be

Your guests want to experience your city like a local. They want to see things that they would never have known was there, so you need to wow them. The list is endless and is only bound by your imagination, so put yourself in their shoes and think like a tourist.

For a full run down of what an Airbnb Experience is, check this link. I give you a step by step guide and some great example ideas to get started.

#7 Co-Host with an Established Airbnb

A co host is similar to managing an Airbnb property, except that you are more of a consultant or concierge rather than a manager. This ‘title’ will come in handy as some states and countries make it hard to be a property manager for Airbnb.

*Learn how much an Airbnb co host makes in my detailed guide.*

The role is more of a helper to an established host. While your jobs may be the same as being a full time manager, it doesn’t come with all the paperwork. It is more suited to the everyday person wanting to get into the game.

The host will reach a monetary agreement with you and allocate a percentage that Airbnb will send straight to your bank account.

You will then receive an invite to share their listing. When accepted, you will have access to the calendar and can respond to guests if that is part of your job.

If you don’t want the hassle of setting up your own property, this is a good option. You’ll still be able to make money on Airbnb, but your co host will do the hard work for you.

#8 Become an Airbnb Affiliate

What is an affiliate and how do you make money on Airbnb with it?

An affiliate is a person who advertises a product owned by someone else. Take TripAdvisor for example. Their website advertises hotels from all around the world and gets a commission from every room that gets booked.

Therefore, to be an Airbnb affiliate you would advertise users listing to potential guests and if they get booked, you get a cut.

On top of that, your website has to be relevant to the field of hospitality and must have an audience intent on booking accommodation. They certainly drive a very hard bargain here.

#9 The Airbnb Referral Program

A little more user friendly than than trying to become an affiliate, the referral program is open to any Airbnb user.

A unique referral link is available for you upon signing up to Airbnb. You can share this code with your friends and family and earn rewards for both yourself, and them.

Ok, so you’re technically not making money on Airbnb to spend in your day to day lives. But if you love to travel it will help pay for your accommodation which is always a welcomed bonus!

Time to Make Money on Airbnb

Earning money on Airbnb is much easier than you would imagine. Most people believe you need to own a property, but you now know that is not the case.

I have now helped you discover that there are many ways to make money on Airbnb without actually owning any property.

Some methods are a little harder than others and some require a bit of a sales pitch. But if you put your head down and are prepared to work hard, you can quit your 9-to-5 job and make a business out of Airbnb.

I’ve heard of some savvy people making 6-digit salaries a year by doing the methods I’ve explained in this article. I know for a fact it’s possible.

Therefore, it’s time to get cracking! What methods will you use?

How to Make Money on Airbnb without Owning Property: 10 Smart Ways

If you ever searched for ideas on how to make money on Airbnb without owning property, you probably thought that subletting was the only option. That, however, is not the case. There are a number of other ways to earn on Airbnb without being a homeowner.

Do You Have to Own a Property to Earn with Airbnb?

As mentioned earlier, to start making money on Airbnb, you do not have to be a homeowner. Moreover, in most cases, you do not need considerable funds to get started with your Airbnb venture. There are several other smart and creative ways to enter the vacation rental industry and build a profitable business.

Top 10 Ways to Start Making Money on Airbnb without Owning a Property

1. Take the Airbnb Rental Arbitrage Route

In short, Airbnb rental arbitrage is when you rent a property with the sole purpose of subletting it on vacation rental sites. For this business model to work, the money that you generate must be more than your rent and other business-related expenses.

Before you start with this strategy, you will need to consider legal rules and regulations as some cities do not allow subletting. Moreover, you should obtain permission from the landlord before you attempt to rent out your rented accommodation. In many cases, long-term rental lease agreements do not allow tenants to rent out properties on listing sites. If a tenant violates the agreement, they run the risk of being evicted. However, if both parties have agreed, rental arbitrage can be a great option to enter the industry.

What are the pros and cons of Airbnb arbitrage?

How much can you earn with Airbnb arbitrage?

At the end of the day, how much you will be able to earn using this strategy will depend on location and the size of your property portfolio. If you do this right, you can generate up to three times more than the sum of your expenses.

According to AirDNA’s data, markets that can earn the highest rental arbitrage premium are Savannah, Charleston, New Orleans, Nashville, and Jacksonville. Their data has also revealed that bigger units offer more rental arbitrage opportunities.

2. Become a Short-term Rental Property Manager

Becoming a property manager is one of the most straightforward ways to make money on Airbnb without investing in a vacation rental. As the vacation rental industry is growing at a rapid pace, it means that so too is the demand for short-term rental property managers. Not only is there an increased demand, but the career of a property manager also offers flexible working hours. Your key responsibilities will include:

To become a short-term rental manager, you will first need to understand the legal requirements of your state. For example, some states will require a real estate broker’s license and/or a property manager’s license, while other states might not require any qualification whatsoever. That being said, it is better to continue your education in property management even if it is not a requirement, as this will help you to set yourself apart from your competition.

What are the pros and cons of becoming a short-term rental manager?

How much can you make as a short-term rental manager?

3. Become a Co-host to an Airbnb host

Co-hosts perform similar duties to short-term rental managers. The major difference is that they will act more like an assistant to a host than a manager. If you are still new to this industry, co-hosting is a good place to start. With co-hosting, your main tasks will include:

What are the pros and cons of becoming a co-host?

How much can you make as a co-host?

Co-hosts earn about 10-20% per booking. If you take on extra duties and essentially take care of the entire process, you could earn as much as 25% per booking.

4. Join a Vacation Rental Franchise

What are the pros and cons of getting a vacation rental franchise?

How much can you make by getting a franchise?

5. Become an Airbnb Consultant

As an Airbnb consultant, you will help hosts to maximize their bookings, improve their ranking, and possibly to buy and sell short-term rentals. You will also need to identify a specific niche – this is the secret of the most successful consultants. So, be sure to conduct research and keep your own skills in mind before deciding on which specific services you can advertise.

What are the pros and cons of becoming an Airbnb consultant?

How much can you make as an Airbnb consultant?

6. Start an Airbnb Cleaning Service

Starting an Airbnb cleaning service can be a profitable business as it is typically the first task that hosts will outsource. This means that you will have no shortage of work.

To become an Airbnb cleaning service owner, you will first need to do your research. What do other cleaning services offer? What are the industry standards?

It’s also important to find out if your state has any requirements, such as insurance and licensing, and what the standard cleaning costs are. Make sure to factor in expenses as well. Examples of expenses involved in this type of business are cleaning products, equipment, labor, and marketing.

What are the pros and cons of starting an Airbnb cleaning service?

How much can you make as an owner of an Airbnb cleaning service?

7. Host an Airbnb Experience

Hosting an Airbnb Experience is one of the most creative ways of making money without renting out any property.

Airbnb Experiences is a platform launched by Airbnb in 2016, and in five years, it has helped hosts to generate a steady source of revenue. By joining the program, you can offer a wide range of activities that guests can book during their stays, such as a traditional guided tour, cooking class, or art class. If you have a specific hobby or a program, it can be an excellent alternative to hosting stays.

What are the pros and cons of becoming an Airbnb Experiences host?

How much can you make as an Airbnb Experiences host?

8. Become a professional Airbnb photographer

Becoming an Airbnb photographer is another creative way to earn your bread and butter with Airbnb.

Whichever approach you take, you will need to know about interior photography. So, be sure to learn more about how to stage sets.

What are the pros and cons of becoming an Airbnb photographer?

How much can you make as an Airbnb photographer?

9. Become an Airbnb Copywriter

Offering copywriting services is another non-trivial way to generate profit without renting out an Airbnb property. Copywriting services are becoming more popular among Airbnb hosts. Similarly to becoming an Airbnb photographer, you can advertise your services on online platforms like Upwork and Fiverr.

What are the pros and cons of becoming an Airbnb copywriter?

How much can you make as an Airbnb copywriter?

10. Learn the Craft of Vacation Rental Marketing

To be ahead of the competition, it’s necessary for hosts to market properties. It’s getting even more crucial if they generate direct bookings and need to attract potential travelers to their website.

As hosts have a lot on their plate, they usually look for external help to set up and implement a viable marketing strategy to promote their rentals. If you already have marketing skills and are eager to enter the industry, it’s an excellent avenue for you to apply them. However, if you are not proficient in marketing but enthusiastic to get your foot in the door, you can start with social media. Once you’ve mastered this, you can move on to other marketing areas too.

All in all, vacation rental marketers provide the following services:

What are the pros and cons of becoming a vacation rental marketer?

How much can you make as a vacation rental marketer?

Conclusion

Earning with Airbnb is now easier than ever. In many cases, you don’t even need to rent out or manage a property to make money and achieve success as an Airbnb professional. Even if you don’t have any prior experience, there is a career opportunity for you that can be started as a side hustle or turned into a full-time gig. Some of these strategies are more challenging than others and require more financial investment, but with hard work and commitment, you can make a decent living.

About the Author
Olga Vasylieva is the Content and Social Media Team Lead at iGMS. Olga is on a mission to help hosts and property managers grow their businesses and deliver an excellent guest experience. She is a travel enthusiast and is inspired by life in all its aspects.

How to make money with Airbnb

If you’ve ever considered ways to generate some supplemental income, you may have pondered the possibility of listing your home on Airbnb.

How to make money on Airbnb: Things to consider before listing

If you’re paying a mortgage for our outright own a single-family home, you should be fine renting it out. If you’re paying for a condo, apartment or town home, there may be some occupancy rules that prohibit such transactions. It’s up to you to do your homework so that you don’t run afoul of the law.

In many cases, local authorities have turned against Airbnb. Some municipalities have banned people from renting out their homes.

Money expert Clark Howard says, “The tremendous success of these platforms is what’s led to these strong reactions and the attempts to shut down your ability to earn some cash or have it be the principal reason why you have a place, and you just gotta know that that could happen to you.”

How much can you make on Airbnb?

There are some property owners that make six figures annually on Airbnb — but they’re typically investors with second and third homes. People who list their primary residences can add thousands of dollars a year to their wallets, but it takes time, preparation and realistic expectations.

Before you sign up, it’s a good idea to know what fees are associated with your payout. Airbnb calculates your payout as your nightly rate minus the host service fee, which is generally 3%.

Along with their homes, hosts can charge for “experiences,” which are Airbnb describes as “excursions or other activities designed and led by local hosts.”

Airbnb also usually charges hosts who offer an experience a 20% fee, largely based on the experience. They’re only available in certain cities as of now, but the list is expanding.

Consider how renting will affect your taxes

Keep tabs on your spending

Take gorgeous photos of your home

The importance of taking great pictures of your home’s exterior and interior is such that a whole photography cottage industry has popped up and Airbnb supports it. People have made careers out of just taking photos of rental properties.

If you plan on doing the photography yourself, some photo tips you’ll want to consider include always brightening the photo and shooting corners to show more space.

List your home on Airbnb

If your abode stays on the site awhile without any takers, that’s OK. Many hosts don’t get any guests until it’s vacation season or a really large event takes place in their town. But once you get some inquiries, that’s your cue to inquire a little yourself.

Try to find out as much about the guest as possible

If someone inquires about your home, you can approve or deny the request. But before you make your decision, it’s good to know why they are interested in your home. Read any reviews on the prospective guest’s previous Airbnb stays so that you can make an informed decision.

In many cases, individuals, friends or families may be on vacation and looking to explore a new city. In other cases, you may be able to surmise that they’re planning on throwing a huge party — one that could get them and you in huge trouble!

Once you decide to accept the guest, the next order of business is making sure your home is safe and clean.

Expertly clean your home

While it’s true that you may be able to take a mop or vacuum cleaner and make your floors look brand-new, when it comes to cleaning, there are nooks and crannies that you’ll likely need professional help with.

Cleanliness, along with safety, is probably the highest value that an Airbnb home can possess— and it’s easy to brush it off (excuse the pun). If you don’t have a few days to devote to it, consider hiring a professional cleaner or maid service to give your pad the stellar shine it deserves.

If you choose to forgo the DIY route, sites like Tidy.com and TurnoverBnb are primed to clean short-term rentals.

Make sure your home is well stocked

No, you don’t have to provide food, but regular toiletries and basic cleaning supplies should be stored in a common area for easy access. If your guests need some paper towels because of a spill, they shouldn’t have to be tempted to use a bed sheet.

Create some house rules

Be of service to your guest

While many hosts may never see or meet their guests, you can really score some points for hospitality if you make time to greet your visitors and perhaps answer their questions.

Financial blogger Paula Pant, who wrote for Clark.com about her experience renting her place on Airbnb, said she viewed the transaction as providing a service.

What to do if there are disputes

As with anything, disagreements sometimes happen. Airbnb usually errs on the side of the homeowner when it comes to disputes, so make sure you keep as many records as you can. That includes photos of your place from before guests arrive and after they leave.

If your guests want to start correspondence outside of the Airbnb app, politely tell them that you’d rather communicate inside the platform. That way, Airbnb has documentation in case there is a disagreement over the rental terms.