How to make money on airbnb: 3 different ways in 2023
When I was considering starting an Airbnb I was completely overwhelmed at the what and the how. It seemed like so many people had Airbnbs and it was a giant mystery to me which options were available to me. In this article, I dive into the 3 primary options for starting an Airbnb business as well as some alternatives that don’t involve owning real estate at all.
How does Airbnb work?
Airbnb offers a platform to make income through short-term rentals while also giving its guests an alternative to hotels. The Airbnb website and apps are accessible from anywhere in the world. Airbnb also has options to host an Airbnb Experience which is a way to provide a service to the Airbnb community rather than a Short-term rental for them to stay in.
As an Airbnb host, the first step is to open up and log in to their site. You must describe the location, dimensions, room size, amenities, and prices. Airbnb secures the payment for the hosts once guests have logged into the property. Airbnb charges a 3-percent host fee for bookings.
How do you make money on Airbnb?
Airbnb allows you to make money as a host by charging guests per night and/or with fees for additional services such as cleaning or laundry. You can also collect taxes and fees where applicable, though these are often built into the rates you charge your guests. The amount of money you make depends on the location, condition, and amenities of your rental. Additionally, you can host an Airbnb Experience.
What are the 3 main ways for how to make money on Airbnb?
The 3 main ways I recommend to earn Airbnb income are:
- host short-term rentals (be it through a spare room in your home, an entire home, or a vacation rental).
- host long-term rentals which are greater than 28 days. There are some significant pros and cons to this approach which I go through in greater detail here. Many people who host long-term guests are connecting with traveling nurses, remote workers, or retirees.
- Host an Airbnb Experience. These are things like cooking and private tours.
What is a short-term rental?
A short-term rental is an accommodation that is rented out for a period of time that is generally less than 28 nights. These can be private rooms, entire homes or apartments, vacation rentals, and more. Airbnb offers a platform allowing people to easily rent out their spaces on a short-term basis. Short-term rentals are popular options for travelers as they offer flexibility, affordability, and convenience.
I have experimented with renting the spare room in my home, part of a duplex, an entire stand-alone cottage, and large vacation beach rentals on the Outer Banks, North Carolina. I definitely have preferences for which ones work best for my lifestyle but the first thing you need to do is understand the possibilities.
What is an Airbnb Experience?
Airbnb Experiences are unique activities that local hosts provide. These experiences offer guests the opportunity to learn new skills and explore their destination beyond the traditional hotel experience. Airbnb Experiences can be anything from cooking classes, hikes, kayak tours, and so much more. Hosts of these experiences can charge a fee for their service which is then split. When I was working as a photographer I thought about using Airbnb Experiences to market portrait sessions to travelers. I have a friend who hired a photographer in Venice through and Experience and not only did they get amazing photographs but they got a mini tour of parts of the city they wouldn’t have known about.
Airbnb Experiences I’ve loved have also been cooking and dancing classes where I believe I paid anywhere from $35-300 for these various experiences. Is there anything that’s coming to mind you could consider offering?
What is a long-term rental?
A long-term rental is a rental agreement that spans more than 28 days in length. Long-term rentals can be an attractive alternative to short-term rentals, as they often require less cleaning and preparation time for the hosts. Additionally, by renting out your home or other property on a term basis, you have the potential to make more money as you are essentially “locking-in” a certain rate for the duration of the rental agreement. Long-term rentals can be ideal for people who don’t want to be constantly dealing with different guests or having to clean and prepare their property each time they have a new booking.
Long-term rentals can also be beneficial for Airbnb hosts located in cities or areas where there are restrictions on short-term rentals. By offering a long-term rental, you can avoid having to pay fees associated with vacation rental properties and can still make a profit from your home. Long-term rentals also offer guests the opportunity to become more immersed in the culture of their destination, as staying in one place for a longer period of time allows them to build relationships with locals and go beyond the typical tourist experience.
If you are interested in long-term rentals, make sure to check your local laws and regulations regarding rental agreements as some areas may require certain documents or contracts. Additionally, if you decide to go with this option, make sure to thoroughly review the rental agreements to ensure you are protected from any potential liabilities. I wrote an article in greater detail about this so feel free to check it out over here.
How much can people make on Airbnb?
People can make a variety of amounts from renting their spaces out on Airbnb. How much you will make depends largely on the type of rental and location. Typically, people make more money for short-term rentals than for long-term rentals as they have more flexibility to adjust prices based on demand, but this also requires more time spent preparing and cleaning the space after each stay.
Airbnb has this great tool to help you estimate how much money you can earn starting a rental business. For example, in Durham NC their tool says you could earn $812 in a week of hosting a home that accommodates 4 guests. That is $3,248 monthly! Now, these numbers are just estimations but they do give you a sense of what you could expect.
My spare bedroom earned roughly $55 nightly and I rented it a maximum of 20 days per month to give me some solo time where I wasn’t worried about my dogs barking at a guest or if what I was cooking was going to cause issues for a guest.
Airbnb vs. traditional rentals
I hate traditional property management! I said it, okay now that that’s out in the open let me expand on why I think short-term rentals are a far better way to earn money with real estate. You can charge more money per night, and if you have a problem guest they are typically only there for a weekend. I had a long-term renter once that refused to pay, refused to move out, and then destroyed my home when I finally took possession. I know that’s an outlier experience but it really left an impression. Running a short-term rental is definitely more hands-on but the rewards are much greater the way I do it.
Do you have to own property to rent on Airbnb?
No, you do not have to own property to rent on Airbnb. You can also rent out your own apartment or a room in someone else’s home if you don’t own real estate. This can be a great option for people who are just starting out with renting and want to gain some experience before investing in their own property. Before renting or sub-letting your apartment you must check with your landlord to confirm that’s not a problem.
Other ways to work in the short-term rental business without owning property:
Find an Airbnb host who will add you as a cohost
Even with no income like a host will earn, cohosting may be worth your time. A co-host helps hosts handle the responsibility of hosting Airbnb including communications before and after their stay, guest checking and exit procedures, coordinating cleaning and maintenance staff and storing any requested goods or services if necessary. The payment depends on what you agree upon from Airbnb hosts hiring you. Typically you pay between 10% and 20% on the nights or pay a flat rate monthly.
Offer Your Services as an Airbnb Copywriter
There is so much effort involved with marketing an Airbnb property that copywriting is incredibly important. When property titles are not appealing to prospective tenants they will probably not receive reservations. It is possible to set a price and then look at current Airbnb copywriting jobs. For example, a copywriter’s website provides an entire Airbnb listing for $219.
Start an Airbnb Cleaning Service
Probably you live somewhere with many Airbnb listings. Having a cleaning company for Airbnb can also be a great way to earn income. You have to pay cash upfront to advertise your product and purchase cleaning supplies. It may require some help to clean up the house for your company. Airbnb hosts need cleaners and by actually doing the turnover between guests you will get first-hand experience on how that works.
In conlcusion
Airbnb can be a great way to earn extra money or have it become a primary career. I started out small with a space bedroom and then grew my business from there. It was slow at first but it felt manageable the entire time. What option seems best for you?
