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How to start an Airbnb business?

How to start an Airbnb business?

The founding of Airbnb in 2007 was the stepping stone into a new era of hospitality. Rapid growth has been seen in short-term rentals in the hospitality business and Airbnb has been a major player. Airbnb currently has over 4 million hosts worldwide, in nearly every country with a guest count of over one billion.

Within a few short years, Airbnb has transformed the way we book accommodations while on vacation and for business trips. Airbnb hosts have been able to make great money renting out their entire house or even just a spare bedroom. Airbnb hosts in the US have made millions of dollars hosting with Airbnb since welcoming their first guests in the first six months of 2021 and that too - having just only one listing! If you're wondering how to get started with Airbnb, the good news is that it doesn't require specialized skills.

Read on to learn how to set yourself up for success starting with finding the right property and making it guest-ready.

Is owning an Airbnb profitable?

The financial returns of owning an Airbnb can be rewarding, but it also comes with a certain amount of risk. In the post-pandemic era, people are even more cautious before becoming vacation rental hosts. Nevertheless, the demand for short-term rentals will be increasing as travel picks up, and Airbnb's CEO Brian Chesky predicts the company will have to hire millions of new hosts.

If you're thinking about investing in a vacation rental property, you should weigh all the perks and disadvantages involved. Let's explore what it is like to own an Airbnb home and its benefits.

What kind of income can you expect as an Airbnb host?

According to a survey from Earnest, Airbnb hosts make an average of $924 per month. Several hosts' earnings exceeded $12,000 per month, while some fell below $200. Earnest also found that the median monthly income for an Airbnb host was $440.

Here’s a breakdown of their survey results:

  • 15% of hosts earn $0 to $99 per month
  • 38% of hosts earn $100 to $499 per month
  • 22% of hosts earn $500 to $999 per month
  • 11% of hosts earn $1000 to 1499 per month
  • 5% of hosts earn $1500 to $1999 per month
  • 10% of hosts earn $2000+ per month

According to Marcus Radar CEO at Hostaway,

“An Airbnb short-term rental that has a steady queue of occupants may be more profitable than leasing the same property to someone on a long-term basis. The reason is that Airbnb nightly rates are usually higher. An added advantage is that a host has the freedom to set his or her pricing on Airbnb. This is a routine practice, and guests will pay more to rent through Airbnb, allowing hosts to earn more than landlords.”

What to consider before getting started on an Airbnb business?

Here are a few things you should consider before becoming an Airbnb host:

1. Is Airbnb the right fit for you?

To run an Airbnb is to take on a certain degree of responsibility. You need a bit of understanding of how the hospitality industry works, organization skills, business acumen, and good communication. Airbnb is driven by customer satisfaction, so if you're not a people person, it certainly is not for you.

Whether you're looking to ease into retirement or have more flexible work hours, Airbnb could be what you're looking for. You will need to be conscious of the challenges and realities of hosting

Pro Tip : Start off hosting on Airbnb as a side hustle over a main source of income. You can then determine if it is the right fit for you!

2. Analyze the Market Demand

You will need to extensively research your market and find out the worth of your property and the average occupancy rate in your local area. In touristy areas, it may be easy to turn a decent profit. Highly seasonal markets can have a big impact on regular cash flow throughout the year. You could make use of AirDNA statistics in your location to gauge the earning potential and to understand the demand.

Airbnb also offers tools to help you scope your earning potential.

3. Do Extensive Research!

There are many aspects surrounding research when it comes to starting an Airbnb.

Here’s why:

1. Legal Aspects

There are many Short term rental laws, rules and regulations when it comes to running an Airbnb. For example, if you are on rent and you want to sublet your apartment or rent out a spare room you will need to speak to your landlord plus look up the regulations pertaining to your city or county. Plus there are HomeOwner Association rules to think about as well.

2. Location

Location plays a vital role when it comes to starting an Airbnb business. Setting up in a prime location where there is a high demand for tourism or business travellers is a key factor.

In order to find out if your rental space is in high demand, you should research the market in your area first. Unless you live near a major Airbnb hub, you may be at a disadvantage from the start. Many aspiring hosts are unaware of how location, as well as the demand for Airbnb travel, influences the earning potential of their properties.

3. The Property

How easy is it to reach the property in question? Are there different ways to get there? What kind of facilities, stores, cafes, and bars are in the vicinity? Having an accessible property, close proximity to amenities, and stable demand will have a positive impact on a successful Airbnb rental.

4. Target Audience

What is your target audience? For instance, are you planning to host families with children, business travellers, travel groups, or even long term tenants such as digital nomads? Different types of properties cater to different types of travelers.

  • Buying a larger property in a quiet area is better if you are targeting large groups.

  • A smaller apartment or condo in an urban location will be better suited to attract younger travelers or couples.

  • If you want to attract business travelers, you need to find a property that is close to public transportation and convention centers, but can still provide a quiet atmosphere.

Any future plans for scaling the Airbnb business?

Before taking on any additional debt, make sure you have adequately assessed the return on your investment. In order to rank among the top 10% or higher of Airbnb earners, you usually need more than one property. When scaling an Airbnb business by buying or renting out more properties, you usually need to invest capital to get started.

Other ways to scale your business is to consider Airbnb Arbitrage opportunities or start co-hosting for other property owners.

How to start an Airbnb Business?

How to Kickstart an Airbnb Business?

Though the idea of starting your own Airbnb is a tantalizing prospect - it does come with its own highs and lows. So if you are still reading this - you certainly are keen to know more. With this step by step process - we will breakdown the process to make it easy for you to understand the work it involves

Understand how Airbnb Hosting Works

  • Creating a listing is the first step to getting started on Airbnb.
  • Include all basic information with accurate descriptions
  • Include Stand out photos that showcase the space, and emphasise what makes your space unique.
  • Set your listing fee, and you can vary it based on the time of year or the day of the week. Optionally, the Airbnb platform has a Smart Pricing tool that automatically adjusts your listing's rates based on demand in your area, seasonality, and other factors.

How does Airbnb's commission structure work?

Posting a listing on Airbnb is free. Though once a reservation is made, the company charges the host a 3-5% service fee.

What are the benefits Airbnb offers hosts who are listed on their platform?

Airbnb offers Aircover, which is a Host Guarantee that may provide up to $1 million in property damage protection, as well as Host Protection Insurance — a liability insurance program that may provide up to $1 million in liability coverage. Some countries and programs are exempt from coverage. You may want to purchase additional insurance.

How to start an Airbnb Business?

1. How will you Finance your Airbnb Start-up?

There are several options when financing your Airbnb business. You could opt for personal investment, family investment, mortgage, private lenders, or bank loans. Whichever the choice, make sure it aligns with your goals for a sustainable business venture with room to scale your business in the future.

2. Construct a Hosting Business Plan

Develop a hosting business plan that outlines every aspect of the business creation process. Indicate your short- and long-term goals, as well as potential setbacks and obstacles.

  • Describe the business management structure.
  • What is the preferred customer base for the property?
  • What are the income predictions?
  • Process for payments, banking information, etc.
  • Marketing Plan
  • Operations Plan
  • What are the recurring costs (cleaning, utilities, furniture, and equipment replacement)
  • Start-up costs and investment
  • Future plans for scaling the business

For a free business plan template click here

3. Legal Permission and Licenses

  1. Register your business and make sure you’re certified to host short-term rental stays.
  2. Research the zoning regulations and guidelines of the area in which you want to operate
  3. Check the Airbnb legal regulations pertaining to your city and find out if there are any restrictions
  4. Find out if there are any regulations of the Housing Owners Association (HOA) and neighbourhood restrictions if any.

If you think you need legal advice - consult with an attorney to ensure everything is intact to help you start your Airbnb business.

4. Tax Registration

It is critical to understand taxes to be paid, the types of taxes to be paid, and which deductions are available to short-term rental owners.

Tax advisors who specialize in short-term rental properties can assist you in identifying any taxes and fees you will need to pay.

5. Get vacation rental insurance

While Airbnb does offer basic protection, there are still many situations that are excluded, like theft of cash or intentional property damage. It is best advised to invest in insurance that is specifically designed for vacation rental businesses.

6. Welcoming guests to your Airbnb

You must complete maintenance work, property repairs, and get a deep cleaning done before you can welcome any guests. Before accepting bookings, you will also need to establish a smooth check-in process.

A few options for a smooth check-in process is to make sure to share clear and concise check-in instructions with your guests prior to arrival so they can access your rental without any hiccups. You could also look into options such as smart locks for self-check-in or installing an Airbnb lockbox.

Lockboxes do require you to change the passcode - at the next guest arrival.

7. Invest in Essential Amenities to add Panache!

Equip your Airbnb with the must-have essential items such as high-quality bed linen, Bathroom amenities, Kitchen essentials such as tea coffee sugar, and cream plus utensils, Smart TV, Cooker, Coffee machine, a few snacks, Fire extinguisher, First Aid kit, Refrigerator to name a few.

Remember an Airbnb that is well equipped will result in a fantastic guest experience and earn 5 star reviews for your accommodation - a sure fire way to reach super host status in no time!

Pro Tip : a good way to ensure your guests have a good stay is by investing in smart technology and learning a few hosting hacks to make their stay a memorable one.

8. Automate your routine hosting operations

By automating multiple hosting operations, you can focus on what is most important. You will be able to maintain the smooth running of your business using property management software while working on refining the guest experience.


How can Hostaway help ?

  • Managing multiple accounts and listings across multiple OTAs
  • Improve guest communications by using the unified inbox to organize your messages into a single feed by using automated templates
  • Easily share your daily schedule with your team and assign tasks automatically.
  • Automation of the guest review process
  • Automation on Payments

There are a wide array of services that Hostaway provides through the Property management system (PMS) which also serves as a channel manager. It is one of the most sophisticated state-of-the-art systems that supports, Managing inquiries, recurring guests, distribution channels, owners, and staff all in one place.

Contact our sales team or request a free demo if you need help setting up your Airbnb listing.


Planning and forethought are required when starting an Airbnb business. Getting ready for your first guests begins with finding the perfect property, a market evaluation, a comprehensive financial plan, and familiarizing yourself with the local rules and regulations, as well as tax implications.

So, it makes sense to break the launching of an Airbnb venture into smaller, manageable steps, and often having a checklist to tick off important tasks goes a long way. By doing so, you are less likely to forget an important aspect or become discouraged when you venture out into your new business.

Good Luck!

Ready to find out how Hostaway can transform your business?

Hostaway is proud to support thousands of Property Managers and Airbnb Hosts Around the world. We take pride in being Top Ranked in Vacation Rental Software Review Sites: Capterra, G2, Software Advice, Trust Pilot, to name just a few! Check out our reviews and read the Hostaway Case Studies from real successful and growing Short-Term Rental Managers!