How to make money with Airbnb? The true story of a host

So, is being an Airbnb host worth it? Do the pros outweigh the cons? Can you make good money renting on Airbnb?
I asked myself this question nearly six years ago as I considered the options for my rental property.
Admittedly, I was backed into a corner as my property had performed poorly as a residential rental, and it certainly wasn’t suitable as a holiday let. In truth, Airbnb was the last throw of the dice.
If Airbnb didn’t work, that’d mean selling up at a heavy loss, as the overhead was just eating me up.
But, as luck would have it—it worked!
Making money on Airbnb is 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.
Here’s everything you need to know.
How Much Does a Host Get Paid?
The amount that you get paid as a host varies depending on the following:
- The price per night for your listing.
- The number of nights your listing gets booked.
And as you’d expect, the higher the number of bookings you get, the more you’ll get paid (more on that in a minute).
But how does Airbnb make money in all this?
Airbnb offers several schemes for taking the commission from the host only or from both the host and the guest. Learn more about Airbnb service fees in our guide.
As a host, you also have the option of an additional cleaning fee. This fee gets added to the booking total.
So, all up as a host, here’s a breakdown of how much you’ll get paid for each booking:
Nightly rate x Number of nights booked + Cleaning fee—3%
Making Money on Airbnb
Can you make good money on Airbnb? The short answer to this is yes. DEFINITELY!
But the long answer is it depends.
Here’s what I mean.
Making good money on Airbnb is not as straightforward as creating a quick listing, hitting publish, and expecting bookings to fly in.
In fact, a whole heap of factors impact the amount of money you can make.
Here are just a few:
- The location of your property.
- The degree of competition in your area.
- The market rate per night in your area.
- Seasonal variations in demand.
- The amount of overheads you’re carrying.
Your expenses will obviously impact your bottom line. Some costs are necessary; others result from poor planning and making mistakes. Learn from the mistakes of others! Download our guide on how to prepare your place for short-term rental to avoid unnecessary expenses.
So, the amount of money you could make from a property in one area may drastically differ from the same property in a slightly different location.
At the end of the day, the amount of income you can generate hosting on Airbnb will largely come down to supply and demand.
Airbnb Payment Policy
This is a pretty dry subject, so I’ll keep it short. But here’s Airbnb’s payment policy in a nutshell:
Unlike many other short-term rental platforms such as Booking.com, Vrbo, etc., Airbnb charges the guest at the moment of booking.
And up until just recently, this payment was charged in full—100%. However, Airbnb has now added a payment plan option for guests so they can pay for part of their reservation once it’s confirmed, and future payments will be charged automatically on the dates listed at checkout.
But this doesn’t equate to the money in your account just yet. Instead, this goes into Airbnb’s system, which holds the money until 24 hours after a guest checks in. The funds are released at this point, and your account will be credited.
How to Make Money with Airbnb?
If you want to find out how to make money with Airbnb, it’s pretty simple.
Just take a few photos of your place, create a listing, hit publish, and you’re away!
Sure, you’ll probably get a few bookings and make a little money this way, but it won’t see you retiring any time soon, that’s for sure.
But if you want to find out how to make lots of money on Airbnb and push to be in the top 10% ranking, then you’ll want to invest a little time and learn how to do things the right way.
In its most basic form, making more money on Airbnb comes down to just two things:
- Maximizing revenue
- Minimizing overheads.
So, let’s take a closer look at each.
Maximizing Revenue
Maximizing revenue means getting more bookings at better rates. Let’s discuss a few ideas that might help you attract potential guests and secure more bookings through Airbnb.
This approach takes a little more work—more changeovers, more guest messages, etc.
You don’t have to do the extra work yourself.
Give it a try with a 14-day free trial.
An important metric to consider is your booking rate. It’s the number of people that view your listing vs. the number of people that make a booking.
This metric is essential for several reasons.
Firstly, a good booking rate means you don’t need as many views on your listing to secure a booking.
Secondly, a good booking rate will increase the visibility of your listing in Airbnb’s search results.
Think of it like this: the more bookable your place is, the more Airbnb will want to get it in front of potential guests.
Optimize your listing to attract more guests
Complete your listing. Guests like to know exactly what they are booking, so give them all the information about the rental space, amenities, and nearby attractions.
Create a compelling title and description to let people know what to expect at your place and highlight unique features that set your listing apart, like a fully equipped chef’s kitchen, private garden, or outdoor bath tub.
Use keywords that potential guests might search for. Provide details that evoke emotions to help guests imagine what they would do while staying at your space. Remember that you’re selling an experience.
Upload professional-quality photos of your Airbnb, which showcase your property in the best light because it’s the first thing Airbnb visitors see on the search results page. Great photos sell your place more than anything else.
In 2022, Airbnb introduced a change in its search algorithm to allow guests to explore unique places to stay worldwide using Airbnb categories. You can benefit from this feature even if your property is outside a tourist destination. Moreover, your listing may appear in several categories to reach different types of travelers. You can try to influence the category or categories for which your home will be shown by using relevant words and phrases associated with specific categories.
Complete your Airbnb profile to help Airbnb guests get to know you better. It’s a good way to showcase your personality, build trust, and establish personal connections with travelers who might want to stay with you.
Collect positive reviews. Do your best to make your guests happy with their stays, and don’t be shy about asking them to leave a review in your Airbnb check-out message. Great reviews add trust and social proof and attract future bookings.
If you haven’t got an Instant Book on, switch it on now to ensure a seamless booking experience. Guests like to be able to book instantly. They don’t like sending multiple booking requests until one is accepted. Besides, Airbnb also prioritizes listings that have Instant Book on.
To increase the number of bookings you get, try reducing your minimum nightly stay. Doing this will help your listing be shown in more guest searches, increasing the likelihood of securing bookings.
Respond to guests as soon as possible
A fast response signals that you’re an attentive, professional host potential guests can trust for a great experience. So, the sooner you reply to guest inquiries, the more likely they’ll book.
Airbnb hosts are expected to respond to all guest inquiries and reservation requests within 24 hours. If you fail to do so, your potential guests will have to resume their search and explore your competitors’ properties.
Guest communication can be very time-consuming if you type and send each message manually. A smarter approach is to automate your Airbnb messages using vacation rental software like Hospitable.
Have conversations with your guests even when you sleep
Make your listing stand out
Earning Airbnb Superhost status is one of the ways to stand out from the competition on the platform. A little badge that looks like a military medal works as a booking magnet, telling potential guests they can expect excellent customer service.
Requirements for achieving a Superhost status, like maintaining high review ratings and a low cancellation rate, are strict, but meeting them will also work in your favor regarding Airbnb SEO.
Striving for excellence to ensure exceptional guest experience may also help you earn the Airbnb Guest Favorite badge awarded to individual listings. This dynamic badge is displayed in search results and on listings’ pages to recognize the most-loved properties.
The Guest Favorite properties are chosen automatically every 24 hours based on guest ratings, reviews, and reliability data. Airbnb listings included in Guest Favorites can benefit from enhanced visibility and will likely attract more guests.
Since May 2024, Airbnb has also launched a new highlight to help top listings stand out. The top 10% of eligible listings are highlighted with a gold trophy, a gold Guest Favorites badge, and a label with the listing’s top 1%, 5%, or 10% ranking.
Optimize your pricing strategy
The quickest, easiest way to increase revenue is to optimize the price per night of your listing.
What does this mean?
It means adjusting the amount you charge per night to be competitive at all times. As you see, the market price for your place will fluctuate depending on the time of year, day of the week, holidays, special events, availability, etc.
Competitive prices will increase your booking rate—just make sure your nightly rates cover your expenses and allow you to profit.
Sure, this takes a significant investment of your time if you do your own market research and adjust prices manually. The easiest way to get the pricing right is to take advantage of a dynamic pricing tool that uses sophisticated algorithms and data-driven insights and can adapt prices in real-time.
Dynamic pricing tools can recommend a competitive rate based on market trends like supply, demand, seasonality, events, holidays, and days of the week. They can also optimize your nightly rates to maximize your revenue.
You may want to check out our blog article that outlines how to set your Airbnb pricing strategy step-by-step.
Increase your revenue through upsells
Upselling is an easy way to profit more from each of your customers while ensuring the best possible guest experience. The important thing is to choose the right add-on services or products that will bring real value to your Airbnb guests and enhance their stay.
You can offer your guests many things for an additional fee, for example, early check-ins, late check-outs, luggage storage, local experiences, additional cleanings, etc.
Although it may seem like a lot of work, you can automate the upsell process using technology. Hospitable users can take advantage of our latest Upselling feature. Just build a list of your offerings. Your guests will see available options in their guest portals. Learn more in the help article.
Use different channels to market your property to make more money
You don’t have to rely only on Airbnb to market your property. Being visible on multiple platforms will extend your reach and attract more guests. This includes other OTA platforms like Vrbo, Booking.com, or Agoda, as well as social media and your direct booking website.
Managing listings on multiple channels manually is very time-consuming and prone to errors that can cause double bookings. However, you can avoid this using vacation rental software with a channel manager functionality like Hospitable.
You can also use the Hospitable Direct service to create a direct booking website using easy-to-customize templates. Then, your property will get listed on Google Vacation Rentals, and you’ll be able to get direct bookings without paying high third-party fees.
Get a direct booking website within minutes!
Minimizing overheads
It’s no good increasing revenue when your overheads are spiraling out of control, so close attention to outgoings is a must.
Regular property maintenance
As a host, you are responsible for keeping your rental in good condition to ensure a pleasant living environment for your guests. That means you need to perform routine property maintenance on time to prevent minor things from turning into more significant issues.
Preventative maintenance will help you identify and fix small issues and minimize the need for emergency repairs, which can be extensive and costly. So, to save money on operating expenses, create a maintenance calendar and follow it diligently.
Save on taxes
Operating an Airbnb is a great way to earn extra income, but has tax implications. The good news is that there are legal ways to reduce your taxable income by claiming Airbnb tax deductions.
If you are actively involved in managing your Airbnb, you can deduct certain expenses associated with running your STR property, including costs of repair and maintenance, utilities, insurance coverage, cleaning services, and more. Claiming tax deductions will help you lower the operating expenses of your STR business.
Accept direct repeat bookings to save on commission fees
Airbnb is a great platform to list your property when you start your hosting journey. Maintaining a strong presence in this global marketplace gives you a unique opportunity to reach a broader audience and get first bookings without investing in marketing.
Airbnb charges hosts a commission for each booking, so to maximize your revenue, you should also build a direct repeat booking strategy. You don’t need any coding skills to create a fully functional direct booking website with Hospitable.
Do your best to ensure your Airbnb guests enjoy their stay so they want to return next time, and encourage them to book directly with you.
Tools like StayFi allow hosts to collect guest data for direct bookings through WiFi marketing. With StayFi, you can create your own custom-branded WiFi splash page that every guest will use to log in to your short-term rental’s WiFi. This way, you can collect the contact information of all guests who log in to your property’s WiFi, not just the booker, and create an email list.
Use email marketing to stay in touch with your past guests and remind them about your property. You can send personalized emails with news, behind-the-scene insights, and information about local events. Offer your past guests discounts or customized gifts to encourage them to book directly with you and share a link to your direct booking website.
Reusables & buying in bulk
Things like shampoo, soap, washing-up liquid, etc., can all be refilled and purchased in bulk.
These small savings add up over time. You may also consider using multi-purpose cleaning products to save on supplies.
Damage & breakages
Without a doubt, you’re going to experience damage and breakages. Glasses, furniture, ornaments, basically everything!
They’re unavoidable. But, with a little forethought, they can be minimized.
Things like furniture, for example. What’s going to require more maintenance: an upholstered couch or a wipeable leather/PVC couch? The wipeable couch, right?
So, when preparing your home to welcome guests, it’s always a good idea to invest in durable furniture that’s easy to clean and maintain. And decisions like these can save you a packet over time—trust me.
Take flooring, for example. Carpets get stained and dirty, need to be cleaned regularly, and replaced when old and worn. Not only is this expensive, but it’s a lot of hassle, too.
A simple change to hard flooring solves all of this. It’s easy to wipe, hygienic, and virtually never needs replacing.
See more examples of this approach in our guide for reducing operations costs in short-term rentals.
Conclusion
So, is being an Airbnb host really worth it?
Well, it doesn’t come without its negatives, and the workload can be considerable, but the payoffs—if you get it right—can be very lucrative.
Is it for everyone? Definitely not.
However, the flexibility, extra income, and the chance to meet new people can be extremely rewarding for the right person.
If you’re sitting on the fence, why not give it a go?
9 Solutions to Reduce Operational Costs
