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How to Start an Airbnb Business & Make Money | HostStarter

· AirBNB Management

How to Start an Airbnb Business

Are you considering starting an Airbnb business and earning passive income by renting your property? The sharing economy has opened up new opportunities for people to make money from their homes, and Airbnb is one of the most popular home-sharing platforms.

But before you jump in and start listing your property on Airbnb, it's essential to understand what you're getting into and what's involved in creating an Airbnb business. This informative article will guide you through the process of creating an Airbnb business, including what the Airbnb market looks like in the US, the benefits, earning potential, and the steps involved.

So, are you ready to turn your extra room or entire home into a money-making machine? Read on to find out how to start an Airbnb business and make money with HostStarter.

How Does Airbnb Hosting Work?

Airbnb is a marketplace that connects people who need a place to stay with people with a room or space to rent. Through listing your property on Airbnb and renting it out to guests worldwide as a host. The process of Airbnb hosting is straightforward.

Here's how it works:

  • You create a profile and list your property on Airbnb, including photos and descriptions.
  • Guests search for a place to stay and book their property on Airbnb.
  • You receive the booking and communicate with the guest to coordinate their stay.
  • During the guest's stay, Airbnb handles the payment and supports you and the guest.
  • After the guest's stay, you receive payment and can provide feedback on the guest's behavior.

That's it! You can earn money from your extra space without hassle with Airbnb hosting. Understanding that being an Airbnb host also involves responsibilities such as managing the listing, cleaning, and communicating with guests is essential.

The Airbnb Market in The US

In the US, Airbnb is one of the world's biggest and most profitable markets. With millions of people traveling across the country each year, there is a huge demand for unique and affordable accommodations. As a result, many property owners have started to capitalize on this opportunity by renting out their homes, apartments, and even spare rooms on Airbnb.

According to recent data, the average return on investment (ROI) for Airbnb properties in the US is around 3.6%. Therefore, for every $1,000 invested in an Airbnb property, you can expect to make $36 in profit each year. This number, however, is highly context- and property-type- and demand-dependent.

For example, some cities, such as San Francisco and New York, have a much higher demand for Airbnb rentals and, therefore, a higher average ROI. On the other hand, smaller cities and rural areas may have a lower order, which means a lower ROI.

Overall, the Airbnb market in the US is constantly growing and evolving. As the demand for affordable and unique accommodations continues to rise, it's a great time to consider starting an Airbnb business and taking advantage of this lucrative opportunity. Starting an Airbnb business can offer several benefits, making it a lucrative income option for entrepreneurs and property owners. These benefits include:

The Benefits of an Airbnb Business

Starting an Airbnb business can offer several benefits, making it a lucrative income option for entrepreneurs and property owners. These benefits include:


Airbnb hosting allows you to control your schedule and choose when to host guests. In addition, you can choose how often you rent out your room, so it's a great choice for individuals who want to earn extra money but do not want to take this as full-time work.

Increased Income

By renting out your property or spare room, you can earn extra income you wouldn't otherwise have. On average, Airbnb hosts in the US make $924 per month, which can increase significantly during peak travel periods.

Travel Opportunities

As a host, you may also have the opportunity to travel and stay in other Airbnb properties, experiencing new destinations at a discounted rate.

Sense of Community

By hosting guests worldwide, you can meet new people and build community. Many hosts also report feeling a sense of fulfillment from sharing their space and positively impacting their guests' travel experiences.

Tax Benefits

When renting a room or property, you may be eligible for tax deductions to help offset the costs of running your Airbnb business.

These benefits, among others, make starting an Airbnb business an appealing option for those looking for a flexible, low-cost way to earn extra income and travel the world.

How Much Money Can You Make From an Airbnb Business?

Before starting a business, it's essential to understand your earning potential. An Airbnb business can be a source of income for individuals looking for a flexible and profitable side hustle. According to Airbnb, the average host in the US earns about $924 per month. However, it can vary depending on location, the number of guests, and property type.

It's also worth noting that the Airbnb business is not limited to just renting a room in your home. You could also rent out an entire house, a treehouse, a boat, or a castle. The options are endless, and your earning potential will depend on the type of property you choose to list and its location.

If you're considering starting an Airbnb business, research your local market to see what kind of properties and locations are in demand, and plan accordingly. You can use resources like the Airbnb Host Dashboard and the Airbnb Neighborhoods tool to understand the market better and find the right location for your business.

How to Start an Airbnb Business

Starting an Airbnb business is a straightforward process that involves several key steps. Here's a list of things you require to do to get started:

Determine if Airbnb Hosting is Right for You

Before starting an Airbnb business, you'll want to ensure that it's the right fit for you. Consider factors such as your availability, the type of space you have, and your willingness to host guests.

Prepare Your Space

Once you've determined that Airbnb hosting is right for you, it's time to prepare your space. This may involve making updates and improvements to the area, purchasing necessary equipment and supplies, and decorating to create a welcoming environment for guests.

List Your Space on Airbnb

After you've prepared your space, it's time to list it on the Airbnb platform. This involves creating a listing that includes photos, a description of your area, and information about your location and amenities.

Set Your Pricing

When setting your pricing, consider factors such as the location of your property, the type of space you have available, and the demand for short-term rentals in your area. You can also use the pricing tool on the Airbnb platform to help determine an optimal price.

Start Hosting Guests

You may start taking in guests as soon as your listing goes online. Respond to inquiries and bookings promptly, and be prepared to provide your guests with a clean and welcoming space. You must check out the HostStarter guide on How to Host on Airbnb to understand the host's responsibility before diving in.

Are You Truly Ready to Start an Airbnb Business?

Before starting your Airbnb business, you must ensure you're truly ready. Listed below are some questions to ask yourself to determine if you're prepared to become an Airbnb host:

Do You Have Time to Host?

Hosting on Airbnb requires time, effort, and dedication. As a host, you are responsible for all managing and day-to-day operations of your Airbnb rental, including communication with guests, cleaning, and maintenance.

Have You Considered All the Costs?

Starting an Airbnb business can be expensive, and it is essential to consider all the costs before leaping. You must factor in insurance, taxes, marketing, and repairs. Ensure you clearly understand the costs and have enough resources to cover them.

If you have limited resources, check out the HostStarter blog on How to Invest in Airbnb Without Owning Property to get better insights into investing in Airbnb without owning property.

Are You Sure You Can Rent Your Space?

Before starting an Airbnb business, it is essential to consider whether you can rent your property. Sometimes, homeowners associations, landlords, and local laws may prohibit short-term rentals. Ensure you familiarize yourself with the laws and regulations in your area before starting an Airbnb business.

What are Some Other Questions to Consider?

Here are a few other questions you should consider before starting an Airbnb business:

  • Do you have experience in customer service?
  • Are you willing to invest in high-quality furniture and equipment for your Airbnb rental?
  • Are you comfortable with the idea of strangers staying on your property?
  • Are you prepared for the potential for damage or theft?

Answering these questions and considering these factors can help determine whether you are ready to start an Airbnb business. And if 50% of your answers are No, go for investing in property to list them on Airbnb. If you need help buying an Airbnb investment property in Dallas, look at the HostStarter guide on Tips to Buy an Airbnb Investment Property in Dallas. 

Common Expenses in an Airbnb Business

When starting an Airbnb business, there are ordinary expenses you need to keep in mind. These can include things like:

  • Cleaning services
  • Property maintenance
  • Furnishings and linens
  • Marketing and advertising costs
  • Hosting platform fees (Airbnb charges a service fee to hosts for each booking)

You may incur variable costs, such as repairs and upgrades to the property and unexpected expenses. On the other hand, some fees can be considered fixed, such as monthly utilities and insurance costs.

It's essential to keep track of all your expenses to ensure that you are making a profit. You can use a spreadsheet or financial software to keep track of your income and expenses, so you have a clear picture of your finances.

What Do Taxes on an Airbnb Business Look Like?

The tax structure for an Airbnb business varies depending on the location and regulations of the host. Generally, Airbnb hosts are considered self-employed and responsible for paying their rental income taxes.

In the US, Airbnb rental income is considered taxable and must be reported on the host's federal income tax return. Hosts may also be subject to state and local taxes, such as hotel or occupancy taxes. Additionally, hosts may be required to obtain a business license and pay sales tax on their rental income

For example, in California, Airbnb hosts must pay a state sales tax of 7.5% on their rental income and may also be subject to local taxes, such as a Transient Occupancy Tax (TOT) of up to 14%. This means an Airbnb host in California may need to pay a combined sales tax rate of up to 21.5% on their rental income.

Final Thoughts

Making Airbnb your business is a terrific way to make side money or a living. But first, it's essential to understand how the platform works, what the market is like in your area, and what expenses and taxes you may incur.

Before starting, ensure you are genuinely ready by asking yourself questions like if you have enough time to host, if you have considered all costs, and if you are allowed to rent your space.

It's also important to clearly understand how much money you can make to have a realistic expectation of your earnings.

To start an Airbnb business as an investor, consider following the steps outlined in this guide, and visit the HostStarter website for more helpful resources and tips. Then, with the proper preparation, you can be on your way to starting a successful Airbnb business.