entrepreneurship

How To Make Money With Airbnb: Turn Your Free Living Space Into Profit

Ian Chandler

WealthFit Contributor

If you have any property that’s gathering dust—even just a spare bedroom—becoming an Airbnb host is one way to make extra money with what you already have. The best part is that you have the freedom to either spare rooms every so often or build an ENTIRE business on Airbnb.

Read further for a closer look at how to make money with Airbnb and leverage the platform to create a thriving income stream.

Background: What is Airbnb?

Founded in 2008, Airbnb has been helping people find affordable, memorable hotel alternatives around the world.

There are over 4 million Airbnb listings worldwide, and on any given night, 2 million people are staying in Airbnb rentals across the globe.

But it’s not just the guests who benefit from Airbnb. As it turns out, the sharing economy is helping countless people turn a profit using nothing but free space in their homes.

Many people use Airbnb as a source of income, and some people are full-time Airbnb hosts.

You don’t need several swanky spaces to enjoy Airbnb success, but you do need to take a good, hard look at the numbers. This includes:

  • value of your property
  • estimate of your profits
  • Airbnb charges and fees

If this sounds intimidating, don’t let it worry you—it’s a lot more straightforward than it seems.

Of course, you’ll need to put the work in if you want to learn how to make money with Airbnb, but it’s totally doable. Ready?

Step 1: Calculate the Worth of Your Property

Before listing your home, you need to take a look at the actual property you want to turn into an Airbnb rental.

The first step is to determine the property’s value and figure out how much you could charge. A lot can go into these calculations, and it’s easily one of the most involved steps here, so be ready to crunch some numbers.

The simplest way to start out is by comparing your property to existing Airbnb listings. Use Airbnb’s built-in search engine to find properties near yours that are similar in four categories:

  • size
  • appearance
  • quality
  • guest capacity

If possible, pick out 5-10 listings that are similar to yours, and make a note of their prices and fees—be sure to include the nightly rate and any cleaning fees or host service fees that may apply.

There are tools that can help when conducting market research:

  • Airbnb’s streamlined financial tool: this helps you get a better idea of what you could earn by simply entering your location, type of space, and guest capacity. Although useful, it’s not the most in-depth application, so it shouldn’t be your only basis when it comes to estimated earnings.
  • AirDNA and Eliot & Me: these offer calculators and estimators that are more detailed than Airbnb’s tool. However, these tools aren’t considered official, so the results won’t be 100% accurate.

Only after conducting this research will you will have a good idea of what your property is worth as a rental.

When you’re first learning how to make money with Airbnb, understanding your property’s value will have a huge impact on your success, so it is critical to NOT gloss over this step.

Step 2: Set Your Rates

Now that you know how much your property is worth as an Airbnb, it’s time to set your rates.

Naturally, you’ll need to consider how much similar properties near yours are charging, but there are other important factors to assess when thinking about how to make money with Airbnb.

First, think about affordability. Ideally, people want to stay in a space that has good value for their money.

This doesn’t mean you need to undercut your competitors, but you do need to think about how you can create a better offer than them, and this may mean a lower nightly rate. If you can provide a competitive experience and help your guests save money, that’s great!

Second, consider the fees involved. With Airbnb, both the guests and hosts pay different fees. The guests are responsible for a variable booking fee (usually around 6% to 12%) while the hosts are responsible for a 3% service fee.

On top of those fees, you’re able to add other applicable fees, such as:

  • late check-in fees
  • pet fees
  • equipment rental fees
  • cleaning fees
  • security deposit (Airbnb uses its resolution system when it comes to collecting security deposits.)

Consider the related expenses involved in hosting. Hosts are required to provide certain essentials to their guests, such as soap, towels, toilet paper, pillows, and clean sheets.

It’s also highly advantageous to provide other perks (like a coffee maker or even a stocked pantry/refrigerator), so if you’re thinking about going above and beyond, be sure to factor those costs into your rates.

There’s also utilities to keep in mind, since you’ll naturally have a higher bill.

Step 3: Prepare Your Home and Establish a Process

Make sure your space is clean and tidy before you photograph it and present it to guests.

A  professional photographer isn’t a requirement, but you do want crisp photos that clearly show your space off in the most appealing way possible.

It’s also worthwhile to spend a significant amount of time on your actual listing. After all, potential guests will scour your page looking for more insight about your space. Here’s a 3-step process to ensure your listing is ready:

1) Create a list of all your amenities and benefits (e.g., Wi-Fi, balcony, proximity to public transit and/or tourist hotspots, etc.).

2) Write about yourself so your potential guests can get to know you better.

3) Look at high rated listings and, if something catches your eye, take an idea from their book.

For example, if you see a host using a bullet point list to outline amenities and like that format, use it for your own listing as you try and determine what works best. Feel free to experiment!

Also, it’s critical that you have a process in place for everything related to your guests. You should know exactly how check-in will go when guests arrive, how guests should contact you, and what happens when guests check out.

Keep in mind that on your end, you may be required to pay some taxes to ensure everything is legal. Some hosts will need to pay local taxes, and if you don’t own the space you’re renting out, you’ll need to get the approval of your landlord or management company — it doesn’t hurt to strike up a contract with these entities specifically for Airbnb hosting.

Making Money With Airbnb

By now, you have a solid idea of how to make money with Airbnb. There’s no doubt that starting an Airbnb takes a lot of work and preparation, but it can also be incredibly profitable by creating another cash flow stream.

If you have a spare room or even an entire house that’s not seeing any use, turning that space into an Airbnb might be the perfect job for you.

Share

Written By

Ian Chandler

Ian Chandler is the author of The No B.S. Guide to Freelance Writing and writes about marketing, entrepreneurship, and freelancing.

Read more about Ian

RELATED TRAINING

 in 

ENTREPRENEURSHIP

article
How This Entrepreneur Raised $103,737 for His Business By Crowdfunding

Struggling to raise money for your dream business? Learn how to run a fully funded crowdfunding campaign by following these steps.

How This Entrepreneur Raised $103,737 for His Business By Crowdfunding

Ian Chandler

Read Now
article
How to Get (and Keep) Clients

Learn the 6 tenets of winning new clients — and discover how to nurture the clients you already have to boost your referrals.

How to Get (and Keep) Clients

Ian Chandler

Read Now
article
12 Kickass Ways To Make Money From A Website

Learn 12 different ways to monetize your website and turn your traffic into profit.

12 Kickass Ways To Make Money From A Website

Ian Chandler

Read Now
article
The Ultimate New Hire Checklist

Learn how to get the most out of your new hire by going through this step-by-step checklist. Whether they’re full time, part time, or even a freelancer — this checklist has you covered.

The Ultimate New Hire Checklist

Ian Chandler

Read Now
article
How to DOUBLE Your Revenue Without Raising Prices: Horizontal & Vertical Integration

Learn how to use horizontal and vertical integration to grow revenue and dominate your industry.

How to DOUBLE Your Revenue Without Raising Prices: Horizontal & Vertical Integration

Ian Chandler

Read Now
article
Working for Free Isn’t Working for Nothing: The 4 Times It Makes Sense to Work for Free

Working for free isn’t always a bad move. Here’s when and why you should work for free to boost your business and make MORE money.

Working for Free Isn’t Working for Nothing: The 4 Times It Makes Sense to Work for Free

Ian Chandler

Read Now
article
How to Fund Your Business with Government Grants

Who doesn't want cash from their favorite Uncle Sam? Here's how you can find grants and fund your business with free government money.

How to Fund Your Business with Government Grants

Ian Chandler

Read Now
article
Bootstrap Your Startup & Kickstart Your Success

Launching a startup without investors may seem like a one-way ticket to failure—but it’s one of the best ways to kickstart your business.

Bootstrap Your Startup & Kickstart Your Success

Ian Chandler

Read Now
live talk
How To Find Financing in a Volatile Market

Whether you are a small business owner trying to survive the COVID-19 pandemic,  a large business owner trying to stand out in a crowded industry or an entrepreneur with an unwavering dream to start a business, Gerri Detweiler had insight for you in this live talk.

How To Find Financing in a Volatile Market

live talk
Why Right NOW is the Best Time to Start an Amazon Business

Did you know that two-thirds of those shopping for a product start on Amazon? What’s more: the other third starts on Google. Guess where the search results from Google go to? You guessed it: Amazon. This is according to Jason Boyce, who says that if you have an idea for a product, Amazon is the place to sell it. Jason knows how to sell on Amazon — he is a Top 200 Amazon seller. Under Jason’s guidance, his online company scaled from zero to $20 million in annual revenue. Jason also teaches how to Start Your Own Amazon Store and Advanced Amazon Seller Strategies here at WealthFit. 

Why Right NOW is the Best Time to Start an Amazon Business

High-ROI Content Marketing

High-ROI Content Marketing

How To Rapidly Produce Digital Content That Drives Traffic, Leads, and Sales

Joe Fier & Matt Wolfe

Watch Now
The “Money Train” Method

The “Money Train” Method

5 Steps to Generating Consistent Income as a Speaker, Consultant, or Salesperson

Mike Handcock & Landi Jac

Watch Now
Communicate, Sell, Win

Communicate, Sell, Win

How To Win Clients, Influence Employees, and Grow Your Business Through Effective Communication

Rene Kamstra

Watch Now
The 60-Minute Business Plan

The 60-Minute Business Plan

A Crash Course on Effective Business Design for Busy Entrepreneurs

Jason Smith

Watch Now
live talk
Connecting Extraordinary People With Extraordinary Lifestyles

Go behind-the-scenes with real estate agent to the stars, Rod Watson. This former athlete shares his humble beginnings helping struggling families with short sales to now working with high-end clientele. Meet the L.A. VIP Agent and hear his personal branding secrets.

Connecting Extraordinary People With Extraordinary Lifestyles

Digital Nomad

Digital Nomad

How To Free Yourself From the Ordinary, Travel the World, and Make Money Online

Laura Petersen

Watch Now
Business Badass

Business Badass

The "One Man Army" Approach to Planning, Leading, & Succeeding at Business

Dale Comstock

Watch Now
live talk
The 6 Billion Dollar Man: A Day In The Life

"The Man Behind the Brands", Bernt Ullmann, takes us deep into his learning experiences as a branding expert for fashion industry giants and the music industry.

The 6 Billion Dollar Man: A Day In The Life

live talk
The Renaissance Man, Jumping Ship & Family Businesses

Learn from the man who has done it all. Adam Mendler is a modern renaissance man who went from working in corporate America to starting a successful business himself.

The Renaissance Man, Jumping Ship & Family Businesses

live talk
Reading People, The Power of Listening & Winning an Emmy

Rene Kamstra, top speaker and communication expert, teaches us how to read people and their body language, a very important skill that helps us gain leverage.

Reading People, The Power of Listening & Winning an Emmy

Entrepreneurship 101 for Teens

Entrepreneurship 101 for Teens

How To Start Your First Business

JP Servideo

Watch Now
live talk
Conquering Cancer, Making Movies & Selling Businesses

This Cancerpreneur didn’t let the bad news of illness get in the way of his entrepreneurial spirit and positive mindset.

Conquering Cancer, Making Movies & Selling Businesses

live talk
Structuring Creative Deals, “Thin Slicing” & Exiting Smart

Roland Frasier is someone who has achieved great success in his life through highly-profitable business deals, yet believes that degrees and certain career paths are overkill.

Structuring Creative Deals, “Thin Slicing” & Exiting Smart

Idea To Income

Idea To Income

How To Start a Company and Turn Your Entrepreneurial Dreams into Reality

Didi Wong

Watch Now