Airbnb Expenses to Keep in Mind if You’re Going to Be a Host

airbnb expenses

By The Hospitable Team

Thinking about hosting with Airbnb? For many people, it’s a great way to earn some money on side while connecting with travelers from all around the world. And if you do everything right, you can grow a successful business that can become a source of your full-time income.

Starting an Airbnb requires investment. But you can only make good investing decisions if you understand your Airbnb expenses because they’re directly tied to how profitable your short-term rental business is.

So how much does it cost to start an Airbnb, keep it running, and ensure you can make money from it? Keep reading to find out. With a clear understanding of your Airbnb host expenses, you’ll be able to make better business decisions and set a pricing strategy that makes sense for you and your listing.

How Much Does It Cost to Start an Airbnb?

It depends. The cost to start an Airbnb business will likely vary in different areas, and you’ll need to take plenty of things into consideration. Will you be managing the rental property yourself, or will you need a co-host? Is there a year-round demand for your rental space? What type of travelers do you want to target, and what do they require from their accommodation?

For example, starting a glamping business on Airbnb is an option that requires a little upfront work and low investment. If you own a house, you can just purchase a tent, put it in your backyard, and market it to travelers who want to stay in unique accommodation where they can enjoy nature. Then your Airbnb startup cost can be about $3,000.

But if you want to rent out your house or apartment, you’ll need to consider upfront costs of redecorating and furnishing your home to make it perfect for your potential guests. You should create a cozy atmosphere and make your space look unique because you’ll compete with lots of other Airbnb hosts. That means you’ll have to spend about $1,500 for each bedroom and an additional $2,000 to $3,000 for the rest of the house and common areas.

When preparing your property for short-term rental, you need to maintain the balance between durability and building a cozy atmosphere. Our free guide will give you some practical advice.

What about Other Airbnb Startup Cost?

You’ll need money for basic amenities such as soap, toilet paper, shampoo, and other equipment to ensure your guests feel comfortable during their stay. We also recommend investing in

  • Extra towels (the more you have, the less frequently you’ll need to do laundry)
  • Installing WiFi
  • A SmartTV
  • Tea, coffee, snacks, salt, pepper, and condiments
  • Smart lock to make it easy for guests to access your place and offer them self-check-in

You may also consider providing more amenities like a fully stocked kitchen, air conditioning, a laptop-friendly workspace, and other amenities that make sense for your market. The majority of travelers say amenities are a top priority for a great trip. Guests even often filter their search results to find desirable amenities. We compiled a complete hosting startup checklist—don’t forget to download your copy.

Thoughtfully outfitting your rental space and adding popular amenities to your listing can help you attract more travelers and get many booking requests. But you should do your best to answer all inquiries as fast as possible if you want to secure more bookings and get great reviews.

Airbnb hosts make their money off of their reputation and guest reviews. That means that communication with guests is a must. Responding to your guests’ messages can be a challenge, so many successful hosts automate this process with tools like Hospitable.com. With Hospitable, you can ensure perfect communication with your guests and save a lot of time.

Have conversations with your guests even when you sleep.

We will detect questions and answer on your behalf; send fully custom messages triggered by events, and much more!

High-quality photos that reflect the positive features of your rental property are another important aspect of setting your Airbnb business for success. So you’ll need to hire a professional photographer to help your listing stand out and give it the best chance of being booked. On average, you can expect to spend $100 to $200 for a session. 

When you’re renting your place to strangers, it’s essential to protect your property from accidents. Airbnb’s host guarantee provides up to $1 million in insurance coverage for property damage in 29 countries, including the United States. But it doesn’t protect against theft or personal liability, has conditions and limitations, and it can be challenging to submit claims.

You should call your insurance company to see what is covered and whether you need extra coverage. You should probably purchase short-term rental insurance if you don’t want to pay from your own pocket when you have a bill for some expensive accidental damage. Such insurance is more expensive than regular homeowner’s insurance.

How Much Does It Cost to List on Airbnb?

You can list your property on Airbnb for free, but there is a service fee that helps the platform run smoothly. This fee covers Airbnb’s overhead expenses, such as the website and 24/7 customer support. It is charged when a booking is confirmed, and it’s the only fee that hosts need to pay.

So how much does a service on Airbnb cost to owner of a listed rental property? For a split fee, most host hosts pay a flat service fee of 3% of the booking subtotal, but Airbnb Luxe and Airbnb Plus hosts, as well as hosts with Super Strict cancellation policies pay more. For the host-only fee, property owners can expect to pay around 14-16% of the booking amount.

Airbnb Property Management Cost

You should also be realistic about your ongoing time commitment because time is money. Managing short-term rentals is a time-consuming process that requires hosts to wear many hats. You will need to do a lot of tasks on a day-to-day basis. Some of these routine tasks are essential to keep your business up and running, while others are crucial for your business growth. They are:

  • Communication with guests
  • Arranging cleaning and maintenance
  • Handling check-ins and check-outs
  • Managing reviews
  • Adjusting prices
  • Updating your listing
  • Restocking supplies, etc.

If you have a daytime job or other responsibilities, it can be stressful to handle everything, so you may want to consider hiring a property manager to oversee your rental property. But you should keep in mind that the services of an experienced property manager can be quite costly. The commission will depend on your property’s type, location, and other factors, and you can end up paying 20-40% of each booking to a local manager.

But you can save on Airbnb property management cost if you choose to manage your business yourself and automate almost all your routine tasks using software like Hospitable. Our tool will help you with guest messaging, assigning tasks to your team, and managing listings on multiple platforms. 

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Airbnb Costs to Owner You Should Know

There are also some ongoing Airbnb expenses related to maintaining your property. You’ll need to spend money on regularly restocking amenities in your rental and periodically updating towels and linens. This is a relatively small expense; you can keep the costs down by buying everything in bulk. Other expenses include professional cleaning services, repairs and maintenance, utilities, subscriptions, etc.

Some of these expenses (like subscriptions and TV) are fixed, and you can expect them no matter the amount of work you performed during the month. Other expenses are variable: they will be subject to change from month to month and are a little more difficult to predict. Understanding these expenses is critical for managing your expectations about the profitability of your Airbnb.

Keeping your rental space clean is vital to your business, so you may opt to pay professional cleaners to clean your house and make up beds after every check-out. That can save you time and energy. Cleaning service can be the best option if you’re planning to do full-time rentals. This way, you can ensure a faster turnaround time between guests. Cleaning fees may vary across different areas.

Utilities like electricity, gas, water, trash, and sewer will make up a large chunk of your monthly spending, and you’ll need to pay bills with each guest. And don’t forget about subscriptions for Wi-Fi, cable, and Netflix if you decide to offer them in your listing.

It’s common for things in any short-term rental to get worn down, break, and need fixing over time. You may also need to deal with more intentional damage to your property. So you’ll have upkeep costs. Be ready that about 10% to 15% of every booking will go towards ongoing maintenance or some repair.

Final Words

Airbnb is a well-known vacation rental platform that will put your rental space in front of a wide audience worldwide. Renting out your property there can be an excellent money-making strategy if you think of your rental as a business and invest your time and money.

You should also be smart about your investment and keep track of all your Airbnb expenses while running Airbnb because many of them are tax-deductible. You might get most of them back when it comes to tax season.

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So, is being an Airbnb host really worth it? Do the pros outweigh the cons? Can you make good money rening on Airbnb?
I asked myself this question nearly six years ago as I considered the options for my rental property.
It’s not for everyone, however (as you’ll soon find out), but hopefully, this article will help you to decide if becoming an Airbnb host is worth it for you.

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