The Big Picture – How To Start An Airbnb:
-
- Understanding local laws is crucial before listing your property on Airbnb, as many cities have strict regulations and taxes on short-term rentals.
- Price your Airbnb competitively against local hotels, not other rentals, to attract guests by offering better value while maintaining profitability.
- Approach short-term rentals as a full hospitality business, emphasizing cleanliness, responsiveness, and guest satisfaction to earn positive reviews and repeat bookings.
Disclaimer
The information provided on this website is for general informational purposes only and should not be construed as legal, financial, or investment advice.
Always consult a licensed real estate consultant and/or financial advisor about your investment decisions.
Real estate investing involves risks; past performance does not indicate future results. We make no representations or warranties about the accuracy or reliability of the information provided.
Our articles may have affiliate links. If you click on an affiliate link, the affiliate may compensate our website at no cost to you. You can view our Privacy Policy here for more information.
Have you ever been curious about how to start an Airbnb and become a host? How much extra income could you earn if you transitioned a property from a long-term to a short-term rental? Let’s talk about it.
Why Start An Airbnb and Become a Host?
Here are just some of the pros of being an Airbnb host:
| Benefit | Description |
|---|---|
| Extra Income | Earn additional income by renting out unused space or properties. |
| Flexibility | Hosts can choose their own rental schedule, allowing for flexibility in managing bookings. |
| Meeting New People | Opportunity to meet travelers from around the world and share cultural exchanges. |
| Utilize Unused Space | Make use of empty rooms or properties, turning them into profitable assets. |
| Tax Deductions | Potential tax benefits, such as deductions on expenses related to hosting. |
| Enhanced Hosting Skills | Develop skills in hospitality, communication, and property management. |
| Positive Reviews and Reputation | Good hosting can lead to positive reviews, increasing the likelihood of future bookings and higher earnings. |
| Local Community Benefits | Contributing to the local economy by attracting tourists to the area. |
| Personal Satisfaction | Enjoyment and satisfaction from providing a positive experience for guests. |
| Networking Opportunities | Building a network with other hosts and industry professionals for support and advice. |
For a better look, we tracked down several Airbnb experts to explain how to start an Airbnb with minimal fuss and maximum profits. They were quick to point out that managing a short-term rental business is not for everyone—or for every property—but it can be extremely profitable.
From broad-level strategy and narrowing into more tactical tips, here are 14 tips for how to start an Airbnb as you try out Airbnb rentals as a landlord!
How to Start an Airbnb
Real estate investing and property management aren’t “rocket surgery,” as my ex-girlfriend used to say. But as you research how to become an Airbnb host, you quickly realize that throwing up a listing with a few photos snapped with your smartphone won’t land you huge returns.
Follow these host tips from the experts and prepare to work hard.
1. Run the Numbers
“Before you become an Airbnb host, calculate whether the additional effort is worth the money, compared to what you could earn if you rented out the same space on a long-term lease.”
Paula Pant, the sharp mind behind Afford Anything, uses Airbnb and short-term hosting for some of her rental properties. But not all.
Here’s how she breaks down the math:
“Let’s say you could rent an apartment on a 12-month lease agreement for $1,200/month. You could Airbnb the same space for $100/night.
“On the surface, that $100 per night sounds like a no-brainer. At full occupancy, that’s $3000 per month. Why wouldn’t you take that?
“But if Airbnb only gets you 18 days per month of occupancy, then your gross income would only be $1,800/month.”
The vacancy rate is far from your only expense, though. You’ll need to pay for gas, electricity, water, internet, and consumables like toilet paper and soap. And don’t forget extra occupancy taxes tacked onto short-term rentals!
“Once you subtract these from that $1,800/month gross, you’ll find—in this example—that the long-term 12-month lease actually makes more money.
“That’s not to say that all long-term rentals are better or that all short-term rentals are better. It simply means that you should not make assumptions based off gross income alone. Compare the two options to see which one is more lucrative.”
2. Price Against Hotels, Not Other Rentals
Al Williamson, arguably the country’s top expert on Airbnb rentals, urges a counterintuitive approach to pricing.
“Your Airbnb pricing should not be related to what you could charge for a long-term rental. Don’t even price your nightly rates based on other nearby Airbnbs!
“Your competition consists of nearby hotels. Look at comparable hotels’ nightly rates and try to beat them by 15-25%.”
When I asked Al about units with multiple bedrooms, he said the same principle applies. “A family of six could either book three rooms at the nearby hotel chain… or they could book your three-bedroom unit. In that example, consider pricing your three-bedroom at the cost of booking two hotel rooms to make your unit an easy decision.”
Want a complete online lesson from Al about how to succeed as a short-term rental business? Here’s a free webinar we hosted with him, breaking down how he’s doubled his rental revenues.
3. Know Your Local Laws
The hotel industry is no pushover. With billions of dollars on the line, hotels aren’t just surrendering the loss in market share.
And their cries — lobbying dollars and campaign contributions — tend to fall on sympathetic ears in local legislatures. After all, many municipalities charge special hotel taxes.
Many local governments have outlawed or severely restricted Airbnb and other short-term vacation rental services. For example, San Francisco only allows people to list Airbnb units if they live in the property themselves for at least 275 days per year.
Research the best cities for vacation rentals, including both returns and legal regulations. Always understand your local laws, and make sure you can comply before listing on Airbnb!
4. Approach Short-Term Rentals as a Complete Hospitality Business
4. Approach Short-Term Rentals as a Complete Hospitality BusinessBeing a landlord is largely hands-off, with occasional spurts of effort. That’s what attracts most landlords in the first place — the promise of passive income!
Short-term rentals can produce strong income, but they’re far less passive. And they require a more holistic approach to operate profitably.
“So many people who try out Airbnb just throw up the listing and then sit back and wait,” laments Al Williamson. “They don’t do marketing outside of Airbnb or VRBO. Then, when it’s off-season, these hosts don’t make any money, which ruins their annual returns.
“What they should be doing is launching multi-pronged marketing campaigns. They should register with travel websites like Booking.com, post on Craigslist, leverage their own website and audience, and even use hyper-targeted Facebook ads to reach extended-stay business travelers.
“Short-term landlords who approach it as a business can virtually eliminate vacancies, while those who just think of themselves as Airbnb hosts will wonder why their vacancy rate is so high.”
Al mentioned earlier that you should price against the competition of hotels. That also means you should aim to operate with the smooth efficiency of hotels.
5. Furnish Affordably (But Tastefully!)
When most people approach furnishing their rental, they first think, “I guess I should go to the furniture store.”
Wrong. False. Incorrect.
Your potential guests don’t expect their bums to be the first to sit on your sofa. Not a single piece of furniture in your unit needs to be new.
Buy used furniture, and make sure it’s in good condition.
Options include Craigslist, Freecycle, garage sales, Goodwill, the Facebook Marketplace, and used furniture stores. Or maybe your family or friends have some extra furniture lying around in their storage units that they’re willing to lend or give to you. If you go about it with discerning taste, you can furnish your unit for a few hundred dollars.
Just make sure the décor matches within each room. You don’t need to be Betty Draper when learning how to start an Airbnb; just pick a color scheme and go with it. Black and white is an easy one, and blue and wood tones are another easy scheme.
When in doubt, take a tasteful friend with you to do your shopping.
One other tip: avoid political, sexual, or juvenile wall decorations. If that sounds obvious, I’ve stayed at numerous Airbnb units that broke those rules. The weirdest was decorated with rabbits wearing leather S&M outfits. Seriously.
(article continues below)
(article continues below)
Real estate investments? Awesome. Being a landlord? Less fun.
Learn how to earn 15-30% on passive real estate investments in one free class.
6. Never Misrepresent the Property
Every landlord wants to paint their property in the best light. And that’s fine — as long as guests won’t be disappointed when they see the real thing.
Your listing photos are not the right place to show off your Photoshop skills, and your listing description is not the place to wax poetic.
By all means, show off the property’s strengths—brag a little. But be honest about its weaknesses.
That doesn’t mean you can’t put a positive spin on them. If you’re renting out a small studio, “intimate” and “cozy” are reasonable alternatives to “cramped” and “tiny.”
Your guests will rate your property not just overall but also on the accuracy of your listing. If they feel gypped when they arrive, they’ll leave terrible reviews—a fast way to sink your short-term rental business.
7. Accrue 5-Star Reviews ASAP
First and foremost, ask all guests to leave a review for you. Pretty please. With a cherry on top.
Many will forget or not get around to it if you don’t ask.
But building your rating doesn’t stop with asking for reviews. Initially, you might need to price your unit more competitively and go the extra mile with each guest.
“People love a deal, and as a new Airbnb host, it can be difficult to stand out amongst the other AirBnb listings in your area,” explains Andy Kolodgie, owner of Cash Home Buyers Georgia. “By initially lowering the price of your Airbnb, you will draw in more people because most are looking for affordable accommodations. This will build your Airbnb reputation and allow you to start getting reviews. Building this credibility early on will attract more people to your Airbnb, enabling you to increase the price down the road.”
The faster you can score your first five positive reviews, the faster you’ll drop that vacancy rate. Many guests refuse to stay in units without at least 5-10 reviews, so make gathering reviews a priority when you start your how to become a host for Airbnb.
8. Cleanliness Is Next to Godliness
Everything about your unit and your guests’ stay could be perfect, but if they see one cockroach cruise across the kitchen counters, you can expect a bad review.
Your units must be spotlessly clean. That goes doubly for kitchens and bathrooms.
And while we’re speaking of reviews, cleanliness is another category that guests will use to rate your unit. And not just on Airbnb, but on travel websites as well.
If you hire a maid or cleaning service, screen them well, and inspect their work regularly. Check that the bed linens are spotless and turned down professionally. If you do the cleaning yourself, make sure you do a spectacular job worthy of Mr. Clean’s shining pate.
9. Turn on “Instabook” If You Can
9. Turn on “Instabook” If You CanAs a businessperson (you’re a businessperson, not an Airbnb host, right?), you should be on the lookout for differentiators, like ways to make your product more attractive than your competitors.
Lily He-Prudhomme, who writes about her frugal journey to financial independence at The Frugal Gene, uses Airbnb rentals as part of her strategy. “Turn on ‘Instabook’ if you don’t have specific schedule demands. It really does make a difference in the appeal of your listing, which translates to higher prices and occupancy rates.”
As a frequent traveler and guest on Airbnb myself, I’ve had plenty of bad experiences with approval delays. There have been times when I’ve thrown my hands up and said, “That’s it, I’m not booking any other places without Instabook.”
Sometimes it’s the little things that make the big difference.
10. Be Extremely Responsive
Experienced hosts know that communication with guests is crucial—so much so that it warrants its own rating category when guests leave reviews.
When a prospective guest inquires about your rental space, answer immediately. Do likewise when approving requests to book (if you refuse to turn on Instabook). And when future guests (or currently staying guests) message you with questions, hop to it.
Your response rate is the percentage of guest queries that you respond to within 24 hours. You need it to display as 100%.
(article continues below)
11. Create a Concierge Document or Booklet
What do guests need to know to stay in your unit?
What would make their stay even more enjoyable?
Start with the basics: an emergency contact name and number, the WiFi network name and password, which key is for which door, check-out procedure, and so on.
But don’t stop there. What neighborhood restaurants are divine? Which are tourist traps?
What entertainment or activities are available in the area? Do you have any tips for getting the most out of your experiences? Do you have any recommendations?
Can you include any coupons for local restaurants, events, etc.?
Don’t feel like you need to go overboard with this. Start with the basic necessities and add to them over time.
12. Leave a Free Bottle of Wine for Guests
12. Leave a Free Bottle of Wine for GuestsIf you know what you’re doing, you can buy a good-tasting bottle of wine for under $10.
Since most people don’t know what they’re doing, just ask for a recommendation from an oenophile friend or a boutique wine shop if your friends are all beer drinkers.
Once you’ve chosen the perfect sub-$10 bottle, buy it by the case for a discount. Half your guests won’t drink the bottle you leave for them, cutting your costs even further.
Leave a little handwritten note under the bottle, addressed by name to your guest, inviting them to enjoy the bottle as they enjoy their stay.
It’s a nice gesture that guests won’t get at a hotel.
Which is your competition, remember?
Just make sure you leave a corkscrew and silverware in the unit!
13. When in Doubt, Hire It Out
“Being successful with any Airbnb property will take time to manage, regardless of how close it is to where you live,” reminds Danny Margagliano, a Realtor and Destin Airbnb expert. “You will not only have to be available to field questions and inquiries but also be ready to spring into action when a problem arises.
“If an appliance breaks or the toilet gets clogged, they will call upon you to fix it. This not only takes time, but you also need to be available and flexible in your schedule. If you work a 9-to-5 job where you can’t access your email or phone, you may want to rethink the idea of self-managing your rental property through Airbnb.
“Some of the responsibilities include but are not limited to, cleaning between guests, general maintenance, answering general inquiries in a timely fashion, and making sure guest check-ins go smoothly. If this list doesn’t scare you, you may be a great candidate for hosting an Airbnb property.”
14. Stop Talking About It and Try It Already
Know those people constantly talking about this or that thing they will try out but who never actually get around to doing it?
Don’t be one of them.
Success requires some experimentation. Airbnb might not be for you… or it might be wildly successful for you.
Lily from The Frugal Gene has had the same conversation repeatedly: “My friends kept asking me about it, and a year later, I checked in with them, and they still never did it. It’s new, so I understand the hesitancy, but to a degree, you just have to jump in!”
Other Important Factors to Think of When Starting An Airbnb
It wouldn’t hurt to prepare yourself before trying to become an Airbnb host. Here are several considerations:
-
- Researching local competition
- Understanding guest demographics
- Sustainable hosting practices
- Seasonal pricing adjustments
- Automation tools for managing bookings
- Marketing strategies
- Legal and liability issues
- Hosting multiple properties
- Advanced photography techniques
- Creating a unique guest experience
- Offering local recommendations
- Handling guest cancellations
- Utilizing guest feedback for improvements
- Understanding platform updates and changes
- Building a brand as a host
Final Thoughts On Starting An Airbnb
Stop talking, start walking.
Start with the webinar we hosted with Al Williamson, it’s a must-see tour of the short-term rental industry. You’ll enjoy Al’s laid-back style, and his examples of the fun (and profitable) tricks he and his students have used to multiply their rental revenue.
When you’re ready, sign up for Airbnb and launch your short-term rental business!♦
Have you tried Airbnb as a guest or host? How were your experiences? What are your own tips for success with short-term rentals?
I’ve been thinking about this for a while. Ok, ok, I guess I’ve been one of those “talkers” that Lily mentioned.
This was a nice kick in the rear though to get me moving. Thanks, great article!
Thanks Heidi! Always nice to hear when we’ve helped nudge people out of the stands and into the arena!
I always tell people to pay attention to local laws. Places with housing affordability issues like NYC, Seattle, SF, LA are cracking down on Airbnbs (unjustly so) as an escape goat instead of addressing deeper issues.
There was one couple who was fined in the 6 figures for not following their local laws.
Great tips. I’ve used Airbnb dozens of times when traveling, haven’t made the leap as a landlord yet. Maybe it’s time to give it a shot…
Great tips. I’ve low key always wanted to host on Airbnb. It sounds like such a cool way to make money but there is some upfront work and research required.
Thanks Chonce! And you’re absolutely right – it’s not truly passive income. Great potential revenue though!
Great tips Brian! I’ve been doing Airbnb landlording for a few years now, and most of these lessons I had to learn the hard way.
Wish I’d read this four years ago!
Thanks Karan! Glad to hear they rang true for you, and even if it was a slow start, I’m glad you’re seeing some success with Airbnb now!
WE JUST PURCHESED HOTEL IN FLORENCE COLORADO TURN IT INTO TINY APTS. IS NOT WORKING NO ONE PAYS THEY SQUAT THINKING ABOUT SHUTTING IT DOWN AND MAYBE DO AIRBNB
I hear you Mary. Given the increasing restrictions on landlords, a lot of them are doing the same thing and serving short-term guests rather than long-term tenants.
Renting an Airbnb vacation rental is very different from booking a hotel room, but that doesn’t necessarily mean one is better than the other. It’s a bit more complicated than you might think.
Ultimately it comes down to the kind of experiences you want to have, and how you want to travel. So let’s have a look at how Airbnb vs. hotels differ from one another, and which one is the cheaper option.
It’s true that Airbnb hosts can set themselves apart through offering a more unique, local, authentic experience, rather than a bland corporate hotel experience!
Impressive tips. I will surely adopt a few if not all.
Glad to hear they were useful Sammy!
Quality Photographs Make a Difference, Take photographs that capture the character of the place, the surrounding area. You should also consider hiring a professional photographer 🙂
Great point Sandra!
Awesome tips! Really appreciate the effort that you put in for us! Thank you!
Thanks Rizal, much appreciated!
These are the best strategies I’ve seen so far! I’m having doubts about hosting Airbnb but I guess I know what I have to do in the next month or two.
Just run the numbers Adam, and make sure you use conservative projections for costs like vacancy rate, property management, maintenance, repairs, cleaning, and so forth.
I have been running AirBNBs for years. I operate three units in Charlotte, NC (www.charlotteforless.com) and we do this exclusively on an extended stay basis. There is no shortage of folks relocating here to get away from the liberal cities who are defunding the police among other stupidity. We rent our spaces with a 30 day minimum either through our own website or through AirBNB. I’d rather rent closer to 100% occupancy at a cheaper rate than mess with 2-5 night stays. We aren’t a vacation rental – we are a lifeline to people wanting to get away from the insanity of their local government/city/etc.
I hear you Andrew!
This article is very resourceful, I really commend the author greatly.
In the near future I look forward to applying what I have learned to the dot. Hopefully I pledge to contribute my experience as a way of sharing and building this niche to the next level.
Keep us posted on your progress Joseph!
I consistently advise people to stay informed about local laws. In areas facing housing affordability challenges like NYC, Seattle, SF, LA, there’s a crackdown on Airbnbs (unjustly, in my opinion) as a scapegoat instead of addressing the root problems.
I heard about a couple who received a six-figure fine for not adhering to their local laws. It’s a stark reminder of the importance of being aware of and compliant with regulations in different locations.
Very scary! You definitely need to know your local laws before investing in real estate.