How Much Money Can You Really Make Hosting with Airbnb?
How much money can you really make with Airbnb? That’s the big question if you’re thinking about becoming an Airbnb host, and one that’s hard to answer definitively. With multiple factors at play (your rental prices, how often you rent out your space, and more), it’s nearly impossible to tell someone exactly how much they can expect to make by hosting on Airbnb until they try it out themselves.
However, there are some indications you can look at before deciding whether or not this side gig makes sense for you based on your lifestyle, your budget and your location.
Considerations Before Starting in Hosting with Airbnb
Set Your Rates
Before you sign up to be an Airbnb host, set your rates. This will determine how much money you can make and what types of guests are staying in your home. The Airbnb website provides a calculator tool that is useful for figuring out your potential profit by subtracting expenses from income.
It’s important to note that it doesn’t account for fees, taxes or insurance requirements, so you should consider those additional costs when setting your rates.
Also know that if you are renting out space in a residential area where short-term rentals aren’t permitted, there is a chance you could lose your lease (and property) because of it. So make sure to check with local law officials before signing up as an Airbnb host.
Decide What to Offer
As an Airbnb host, you’re essentially offering your home to travelers. Your decision of what exactly to offer on your listing is one of the most important parts of getting started as a host.
While there are many variables, you want to do your best to choose something that will appeal to a wide range of potential guests and give them something they can’t get elsewhere—but isn’t too much work for you or extremely expensive.
Some hosts choose amenities like a well-stocked kitchen or a washer/dryer in order to set themselves apart from other hosts in their area, while others opt for special perks like airport pickup or discounts at local attractions.
Choose What’s Right For You
There are a lot of factors to consider when choosing whether or not to become an Airbnb host. If you live in a tourist destination and have prime real estate, it might be worth looking into.
If you're just starting out and don't have money to fix up your space, maybe it's best to sit tight for now. Knowing your personal needs is essential before investing any time or money into becoming an Airbnb host.
Of course, there’s no harm in doing some research before jumping into anything! Get familiar with everything hosting involves so that you can make a more informed decision about how much money you want to earn by renting out your place on vacation rental platforms.
Figure Out Taxes & Other Fees
If you plan to rent out a room or an entire property on Airbnb, you'll have to pay taxes and fees—for starters. As of October 2017, here are some of them: The federal government gets 14% (6% Social Security tax and 8% Medicare tax), while state and local authorities can levy their own hotel or lodging taxes on top of that.
If your guests leave behind any personal property when they check out, you may have to pay up to an additional 5.7%. In other words, if you make $100 in profit from renting a room for one night in your home on AirBnB during a week in which all your expenses add up to $75, that leaves $25 —but don't forget about those extra taxes!
Get In the Right Mindset
Preparing your space, setting your price and getting real about how much money you can make as an Airbnb host requires you to be in a particular mindset. If you want to earn enough money for full-time income and you’re serious about getting into business for yourself, then start thinking like a self-employed person.
Believe it or not, as a host on Airbnb, you're running a small business! Before starting on any new venture in life (business or otherwise), think about what your long-term goals are. Maybe even ask yourself: What does success look like to me? The clearer your understanding of what success looks like at each stage of planning and execution will help keep you focused on meeting those goals over time.
Set Up Safety Precautions
As an Airbnb host, it's your job to ensure that guests have a safe stay. The accommodations aren't hotels, but that doesn't mean safety isn't something you should worry about when listing on Airbnb. Think about all of your house rules, and make sure that you're adhering to them.
Also consider having property-liability insurance, especially if your space is in an area where there are many accidents or break-ins.
For example, if it's near a busy street or an airport, think twice before inviting strangers over to sleep overnight. To become a successful airbnb host and get paid at least once a month is easier than you think; all you need to do is follow safety procedures!
Get The Amenities Right
As an Airbnb host, you don’t get much control over your guests. Once they book your space, you are forced to accept them for who they are and hope for a good match—and there’s nothing that kills a good experience faster than bad housemates.
The key is to be sure and offer amenities that will attract guests whose needs align with yours (and be clear about it in your ad). For example, if you don’t like kids or pets because of allergies or otherwise, then make sure to mention that in your listing so that people looking for an adult-only experience won’t find themselves disappointed. Here are some other things you can do to make sure all of your potential guests feel welcome
Offer Wi-Fi: This seems obvious, but lots of hosts fail to include Wi-Fi as an amenity. If you want people from around the world to stay at your place, being able to connect online is pretty important.
Make Sure Your Space Is Clean: People will judge you based on how clean or dirty your place looks—so keep it tidy!
Be Upfront About Any Limits: Some people may not be comfortable staying in a shared space with other strangers; others might have specific dietary restrictions that require special accommodations. Being upfront about these kinds of limits makes everyone more comfortable during their stay and helps ensure positive reviews later on down the road.
Create A Smooth Process
One of the great things about Airbnb hosting is how simple it is to get started. You pick a space, take some pictures and publish your listing. It’s really that easy! However, managing guest communication can be tricky.
Because guests book directly through Airbnb, they often don’t have a means of contacting you without leaving a review on your listing page first—which means you may not know if there are any issues until much later on in your experience as an Airbnb host.
To make sure you have time to resolve any issues (and do so right away), figure out which platform(s) works best for communicating with guests and use them consistently throughout your experience as an Airbnb host.
Stay On Top of Maintenance Tasks
Before you list your space on Airbnb, ask yourself: how much time do I have to manage my airbnb listing and respond to guests’ inquiries? How many days a week can I clean? How much energy do I have for dealing with cleaning, cooking, and all those little details that will come up over time?
If you’re not sure that you can handle it all on your own, consider working through a site like TaskRabbit or getting help from a real estate management company.
They’ll help you keep your place in shipshape order while also handling communications with guests when necessary. And if they don't take care of everything themselves, they'll be able to point you in the right direction.
Airbnb hosting pros and cons
Of course, there are always going to be some Airbnb hosting pros and cons that apply to anyone who tries out being an Airbnb host, and it's important to keep these in mind before deciding whether or not you want to make your home available for short-term rental.
The biggest pro of becoming an Airbnb host is that if you do it right, you can make a ton of money by renting out extra space in your home.
Potential Airbnb hosts should also remember that every decision they make—including where they live and how much they charge for their space—is a conscious decision towards making more money or not. These are great lessons learned from Airbnb's top 20 earning hosts; it is sure to help first-time hosts who are trying to get started.
One of the biggest cons is that in many cities, homeowners are restricted from renting out their space for more than a certain number of days each year, or they need special permission to rent out their primary residence at all.
In New York City, for example, you can only host 180 days a year unless you're using an agent who's licensed by NYC. The other big disadvantage is that hosting on Airbnb takes time and effort. Preparing your home every time someone comes to stay can be exhausting. And while it might be nice to have extra cash flow from renting out your home or apartment when you’re away, you'll also lose some privacy—especially if people are wandering around your home and bathroom when you’re not there!
Conclusion of Hosting with Airbnb
As a host, you’re guaranteed to make your rent money back—and that’s great. But as we mentioned earlier, you might also want to use Airbnb as a way to offset your living expenses or do it for extra cash on top of your regular job. The question then becomes: how much can you make? Of course, there are variables at play here. Location matters (New York City will net you more than rural Indiana), as does how many nights per week/month you decide to host.
If you are only hosting as a source of extra income, then figuring out how much you’ll make is fairly straightforward. Airbnb will charge you 3% of your monthly revenue as a hosting fee. If your listing is available for 20 days each month, that means you’ll have 80 booking nights per month. At $150 per night (the average rate in major US cities), that comes to $12,000 in bookings per month. Subtract $1,200 (3% of $12,000) from that figure and there’s your potential gross income: $10,800.
