Is Renting on Airbnb Still Profitable for Hosts Today?
Becoming an Airbnb host is most definitely profitable given the industry growth rate.
A 2021 study estimated that there are over 2.58 million rental properties in the United States that are seasonally occupied. With that, 600,000 Americans use online platforms, such as Airbnb, to rent out their homes, condos, apartments, and/or rooms to short-term guests.
A second study by Grand View Research roughly calculated that the global vacation rental market size was valued at $74.64 billion in 2021. Between 2022 and 2030, it is expected to expand at a compound annual growth rate (CAGR) of 5.3%.
How Much Can You Make as a Host?
As a host, you have every possibility to become financially successful. According to Futurestay, a leading vacation rental optimization platform, “profits for ‘rentalpreneurs’ listing their properties on Airbnb can range from supplemental numbers, like an extra $10,000 a year, to ‘quit your day job’ numbers, like the $300,000 this investor made.”
Airbnb hosts Amon and Christina are able to make $7,000 to $10,000 per month running their short-term rental. They recommend creating a business plan, taking professional photos, and hiring a professional cleaner.
They also provide the following advice: “Understand what you want to accomplish with your Airbnb business from a business perspective. How much money you want to make, how much you want to charge, and who your target audience is should be in your business plan.”
That said, gaining financial freedom through passive income will depend on how much forethought you put into your business plan. Your earnings also depend on your Airbnb property itself, the location, and its pricing. These three factors affect whether or not you achieve a high occupancy rate.
How Airbnb Hosting Works
Becoming a host on Airbnb is a great way to achieve passive income while being able to manage your own personal life and finances. Airbnb hosts have to go through a four-step process before they can actually start listing their properties.
The sign-up process includes:
- Inputting your personal and property information
- Uploading photos and a description of your property
- Establishing your booking settings and pricing
- Publishing your property for listings
Once certified as a legal homeowner, Airbnb requires a minimum of 30 days of availability during a twelve-month period per listing.
Hosts are expected to provide guests with essentials like soap, towels, toiletries, and linens. It is a host’s job to be responsive and helpful to guests who are requesting to book with them. This includes responding promptly and answering any questions the guest may have.
Additionally, it’s a good idea for Airbnb hosts to be able to manage their time. Through various software tools, hosts can automate their listings, payments, guest communication, and more. Hosts who do not automate these simple tasks often find themselves overworked and underbooked.
The First Step of Airbnb Hosting: Find Your Why
There are several reasons one might want to start an Airbnb business. No one reason is right or wrong, but identifying your “why” will help you make the right business decisions down the road.
The following will help identify some of the top reasons why current successful Airbnb hosts took the leap and started listing their properties.
Financial Freedom
If you’re working multiple jobs to pay rent or buy groceries — or saving for that dream vacation — hosting gives you the opportunity to achieve financial freedom.
Melissa Naman, owner and Superhost of Beach Life Bliss, states:
“One of my many top reasons for starting an Airbnb is to strive toward financial freedom. My goal is to create monthly semi-passive Airbnb income and long-term wealth. Short-term rentals can generate way more cash flow than yearly rentals and get you to your goals faster.
Another big reason for me personally is to share the town that I live in with others. Lake Worth Beach is a small eclectic beach town that brings Key West vibes to everyone that visits. I have had several people come to stay at my Airbnb and wind up buying a house of their own down the street. This warms my heart and makes all of the hard work worth it.”
More Free Time and Flexibility
As a vacation rental host, your work hours are determined by you, for you. You can put in as many or as few hours as you’d like, depending on your goals and preferences.
If you’re ready to ditch the full-time, 9-to-5 lifestyle to spend more time with your kids, travel, pursue a new hobby, or something else, securing an Airbnb investment may be for you.
Entrepreneurial Undertaking
Many Airbnb hosts have a true entrepreneurial spirit and view running an Airbnb as another venture to put under their belt. In these cases, hosts may rely on property management companies and automation software to assist with day-to-day operations.
Build a Lucrative Vacation Rental Business
The process of owning an Airbnb rental can be lucrative and worthwhile. However, according to the team at Futurestay, “it’s incredibly important to go into a decision such as this with your eyes wide open.”
Ready to take your short-term rental dream from side hustle to success? Visit our other blogs to get tips about everything from financing your investment property to optimizing your listing to growing your empire.
