How to Start An Airbnb (With or Without Owning Property): 3 Steps to Start Making Passive Income Now - NextAdvisor

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” The entrepreneur has steadily turned his vacation rentals into an airbnb business that produces positive cash flow each month.
There is a lot of money to be made from having a successful Airbnb business.
Here’s what you need to know about how to start an Airbnb business, listing your short term rental property, and how an Airbnb business can become a profitable side hustle.
What You Need to Get Started on Airbnb If you’re wondering how to start an Airbnb business, there’s good news: the process is relatively straightforward.
If you want to list an apartment or room for your Airbnb business, you first need to make sure it’s allowed in your lease and that your listing complies with local zoning laws.

How to Start An Airbnb (With or Without Owning Property): 3 Steps to Start Making Passive Income Now - NextAdvisor

Editorial Independence We want to help you make more informed decisions. Some links on this page — clearly marked — may take you to a partner website and may result in us earning a referral commission. For more information, see How We Make Money. If you’re looking for a side hustle that can move you toward your FIRE goals without requiring a lot of time, an Airbnb can be a profitable way to earn extra money and cultivate financial independence. “I had been in digital marketing for years and hated that it felt so short term; you’re always worried about how you’ll make money next month,” says JR Rivas, an Airbnb owner, real estate investor, and co-founder of BNB Leverage, a company that helps people buy and list their first Airbnb. “I knew I needed to diversify my income streams.” Rivas got into real estate investing. Seven months after purchasing his first property, he listed one on Airbnb. The income was surprisingly impressive. “I listed four more of my properties, and now have five on Airbnb that generate six figures of revenue a year,” he says. “I want to play a long game.” The entrepreneur has steadily turned his vacation rentals into an airbnb business that produces positive cash flow each month. Since it first started in 2007, Airbnb has grown into a major rental platform with four million hosts and over a billion guests. You can list a home, apartment, room, or shared space as a vacation rental property; there are options to make money in various ways from short term rentals. Airbnb has over six million listings in 220 countries, and its hosts have earned over $150 billion, according to internal reporting from the company. There is a lot of money to be made from having a successful Airbnb business. Here’s what you need to know about how to start an Airbnb business, listing your short term rental property, and how an Airbnb business can become a profitable side hustle. What You Need to Get Started on Airbnb If you’re wondering how to start an Airbnb business, there’s good news: the process is relatively straightforward. You need a home, apartment, room, shared space, or other rental property to list. If you want to list an apartment or room for your Airbnb business, you first need to make sure it’s allowed in your lease and that your listing complies with local zoning laws. Assuming you are in compliance with local laws and homeowners association rules (if you own and will list a home), here are the steps to getting started on the vacation rental platform. No. 1: Sign Up as a Host and List Your Property Go to Airbnb.com and create your account. Then, select “add a listing.” You’ll be directed to fill out a form asking for the general information about your Airbnb rental property, such as: The number of guests allowed in your Airbnb rental The city you’re listing your vacation rental in What amenities your listing includes The number of bathrooms, bedrooms, and bed types your rental property has The type of property you’re listing Airbnb Property Types You can list an “entire place” that gives guests full access to the rental property and all its available amenities, such as a backyard or pool. Or perhaps you might want to list a “private room” that gives guests access to certain rooms and common spaces (bathroom, kitchen), but limits their access to other areas based on what you designate. There’s also an option to list a “shared room” for your Airbnb business. This option gives guests access to a room that is shared with you or others. Think of this as being similar to a hostel or other low-cost short term rentals; the guest shares a room and gets access to only the shared spaces you designate. “I have what I call a ‘tiny house mansion;’ it’s 1,000 square feet,” says Judy Winslow, an Airbnb owner and brand strategist who helps business owners build their personal brands. Winslow’s vacation rental business sees regular interest because her property is in close proximity to a beach. “Guests have their own bedroom and bathroom, but we share the house,” she says. “I live by the beach, so most people come here to go to the beach and play. My experience renting out part of my home on Airbnb has been awesome. I’m careful who I rent to because I’m a single female.” Winslow notes that her decision to start an Airbnb business has led to both financial and social benefits. “I’ve met people from all over the world, and have used the income to pay off 60% of my mortgage,” she adds. No. 2: Make the Listing Appealing Once you’ve selected your property type, you’ll be asked to add photos of the property and create a description of what guests would be renting. This is your chance to crack the code on how to start an Airbnb successfully and make a first impression that will stand out from the crowd. “A year ago, I wanted to buy a church,” says Jami A Hearn, Airbnb owner and founder of Blue Aspen Incorporated, a company that offers short term rentals that have historical significance. “I wanted to give my husband a reason, so I told him we could Airbnb it. We bought a church in Jackson, Pennsylvania, renovated it, and listed it on Airbnb last winter. We market our listing to people who are interested in historic buildings, and we’ve been pleased with the results.” Hearn says her vacation rental has a 50% occupancy rate, which yields between $4,000 and $5,000 a month, and that an Airbnb business is great as a side hustle because the amount of administrative effort needed is low. “We self manage, with just a cleaner on staff, and spend one to two hours a week on the admin tasks,” she says. No. 3: Set Your Airbnb Booking Settings, Calendar, and Rates Review Airbnb’s guest requirements. You can also make additional requirements, such as requiring a government-issued ID. Set house rules for your short term rental property and provide details. Get specific on information that will be helpful upon arrival, such as whether your guests will have to climb stairs or find parking independently. As you figure out how to start an Airbnb business, know that your calendar will be used to set: When guests can book your vacation rental How far in advance guests can book your vacation rental How long guests can stay (you can limit long-term stays) Any date ranges in which you don’t want your property to be available You then decide how to price your listing. Some hosts offer discounts for booking a week, month, or more than 30 days to encourage higher utilization in their Airbnb business. Airbnb does have suggestions that you can use to determine a good price for your vacations rentals. How Much Can You Earn With Airbnb? As of March 2022, the average annual earnings per United States Airbnb host is $13,800, according to internal reporting from the company. Remember that your Airbnb will have monthly expenses, and if you choose to set up your Airbnb as a business, a business license, business insurance, and/or business bank account may be necessary. Airbnb allows you to charge per day, week, month, or longer; the ability to charge at different intervals can lead to higher income than the set rates of a typical real estate investment property. “If you have a property that’s a short term rental (like Airbnb), you’re going to see a lot more revenue than a traditional property,” says Patrick Perryman, an asset manager for Eden Companies, an investment company based in Kentucky. Perryman and his wife Rebekah own and operate an Airbnb. In May 2022, the Perryman’s Airbnb was booked for 19 of its 23 available nights; its $8,578 in booked earnings yielded net cash of $3,842.29 for the couple, according to an Airbnb hosting report and supplementary profit and loss statement that was reviewed by NextAdvisor. “The per-day rate for a short-term rental is higher than a 12-month lease,” Perryman says. “Because you have so many people coming through a short-term rental, the income can be three to five times higher. My wife and I have seen more revenue and income from our Airbnb than if we rented out the property as a long-term rental.” The Perrymans note that Airbnb has become a side hustle they can manage comfortably alongside the responsibilities of their jobs and two children. What Are the Requirements to Be a Host for Airbnb? Airbnb hosts have to meet specific requirements for each listing, as Airbnb wants guests to have a comfortable stay. Those requirements are: Respond to inquiries and trip requests within 24 hours Accept trip requests whenever possible to maximize vacation rental bookings Avoid cancellations whenever possible Maintain a high rating and consistent level of quality Hosts have the opportunity to check their Airbnb income and how they’re doing with Airbnb’s Performance tool. The tool tracks performance against the average for all Airbnb rental properties. According to Airbnb’s terms, listings that consistently fall below average could be subject to penalties. Tips for Being a Superhost on Airbnb Airbnb evaluates hosting performance over the past 12 months for all listings on an account; they do this evaluation every quarter. If a host meets the requirements by the assessment date, they’ll automatically become a Superhost—there’s no need to apply. Hosts are notified of their status at the end of each assessment period. To qualify, a host must: Have completed at least ten trips or three reservations that total at least 100 nights Keep a 90% response rate (or higher) Maintain a 1% (per 100 reservations) cancellation rate or lower, with exceptions made for anything covered in Airbnb’s extenuating circumstances policy Maintain a 4.8 overall rating based on past reviews left over the past 365 days Airbnb suggests providing essential amenities in your listing. These items are what guests consider necessary for a comfortable stay, and are a key factor for how to start an Airbnb successfully. Amenities can include toilet paper, towels, linens, pillows, and soap; the little things you provide encourage guests to leave a great review. “In my properties, I provide disposable toothbrushes, razors, and travel toothpaste,” says Rivas. “It helps get those five-star reviews. Also, if there’s something weird about your property, disclose it in the listing. There are many flaws that guests are willing to put up with as long as they know about them ahead of time.” Having the essential items makes guests happy, and you can add wow items to make their experience over the top. Great entertainment, a game-associated item (pool table, foosball, etc.), a hot tub, books, a nice sitting area outside—think of things you can offer guests in your Airbnb business that aren’t expensive but create a memorable experience. Pro Tip Consider adding special touches, such as special amenities, to encourage five-star reviews. High reviews build momentum and position you to become a Superhost. “The three Airbnbs I’ve stayed at allowed me to have more comfort and space,” says Marisa Sergi, the Chief Growth Officer at L’uva Bella Winery, a wine distributor based in Lowellville, Ohio, and a newer Airbnb renter. “Cleanliness and good amenities are why I left the listings a good review.” How Do Taxes Work With Airbnb? As an Airbnb host, you may be required to collect local tax or Value Added Tax (VAT) from your guests. If you need to collect sales tax, you should inform guests of the tax amount before they book. If your country of residence is in the European Union, Latin America, China, or South Korea, you may need to assess VAT on any services you provide. It’s wise to consult a sales tax advisor in your jurisdiction for more information on what you need to know. Additionally, you’ll also need to submit a W9 to Airbnb so that they can issue a 1099 for you to report host earnings in a year on your taxes. Do I Need to Own a Place to Airbnb? The good news is you don’t need to own your property to operate an Airbnb. If you’re within the regulations of your locality, and it’s allowed by the owner of the home or apartment complex, you could list a private room, shared room, or entire property. Start an Airbnb Today Starting an Airbnb can be a low-maintenance side hustle that grows your wealth over time. You don’t need to own a property to start, you can build this income stream at your pace, and maintaining an Airbnb doesn’t have to take up too much of your time.
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