Airbnb: How to Make Money and What to Sell

Airbnb: How to Make Money and What to Sell

Many people are entering the sharing economy, even though making money with Airbnb takes time and work. From various angles, starting an Airbnb business appears to be a viable option. If you want to supplement your income or start your own business, Airbnb is a terrific place to start. There will be around 4 million Airbnb hosts by 2021.

There is no magic formula for increasing profits, but some guidelines are to follow. Learn how to start a thriving vacation rental business that can pay you handsomely.

1. Calculate your annual income

It’s a good idea to analyze your property’s income potential before listing it on Airbnb.

If you’re looking to acquire an investment property, you’ll want to look for the most profitable location. If you’re renting out your place, you should figure out how much money it can make so you can establish the correct price.

You can use an Airbnb profit calculator to undertake a thorough study of your earning possibilities. It examines historical data and current trends to assist you in forecasting your return on investment. The following are the main metrics to consider:

  • Cash flow: This is the difference between your Airbnb rental income and your monthly rental expenses, minus Airbnb charges. Your positive cash flow will be $1000 if you rent your property for $1500 per month and pay $500 for monthly costs.
  • Cap rate: This metric depicts the potential return on your investment. Divide your Net Operating Income by the Property Price to arrive at the cap rate.
  • To compute the net operating income in the example above, multiply your cash flow by 12 ($100012). The property is worth $140,000, which means the cap rate is 8%.
  • Occupancy rate: This is the ratio of the number of days your property is occupied versus the number of days vacant. Increasing your profits requires maintaining a high occupancy rate.
  • Rental income potential: This is the amount you could make if you rent out your home.

After you’ve calculated your rental’s earning potential, you may move on to other important considerations.

2. Determine operational and extra costs

You must assess your expenses to develop a strong strategy for making money with Airbnb.

Unlike a regular rental, you’ll have to provide supplies and cutlery for your visitors, as well as pay for cleaning and maintenance.

Cleaning costs can impact revenue, especially if you are fortunate enough to have a high number of guest turnovers. Subtract these fees from your overall revenue if you hire a property manager to manage your rentals. The average property management cost is 20% to 40% of the monthly rental income.

Consider charging your guests a cleaning fee to help account for this. It will undoubtedly assist you in saving money on cleaning and keeping your property tidy.

Additional costs for repairs and maintenance should also be factored in. Requesting an Airbnb security deposit and holiday rental insurance is a good idea. This can help you avoid going into debt in the event of property damage or other mishaps.

3. Be mindful of legal ramifications and responsibilities

Staying on the right side of the law is critical to ensuring that your company succeeds. To begin making money using Airbnb, make sure you are informed of the legal restrictions in your area.

During your guests’ stay, you should be present and reside in your rental for at least 275 days every year. Renting laws differ by city, and some cities have rigorous Airbnb rules and regulations. In San Francisco, for example, only permanent residents are permitted to become Airbnb hosts.

Contact your local authorities whether you’re launching a side hustle to generate passive income or a full-time business. Here’s a quick rundown of the legal considerations you should make before starting to make money using Airbnb:

Business license: You may be required to obtain a business license in some areas. If you don’t, your company will be declared illegal.

Rules of taxation: Airbnb collects the occupancy tax on your behalf in some areas. However, there are several jurisdictions where you must pay all of your taxes on your own. Consult a local tax counsel because they may not be fully disclosed on Airbnb to avoid penalties.

Zoning regulations: Certain regulations govern how you can utilize your home. A zoning code, a planning code, or city ordinances detail these requirements.

4. Find out who your competition is

To properly position your listing, you need first to research your competition. Use Airbnb filters to narrow down your search for comparable properties. This is critical for determining your nightly rate and devising an effective strategy for moving forward.

You may find them by restricting your search by neighborhood, several rooms, and amenities. To evaluate their value proposition, look at their calendars and determine their typical occupancy rate.

Another strategy to promote your listing is to use tools like AirDNA and Mashvisor to gain marketing analytics. These tools will assist you in seeing the big picture and determining how much money your competitors make every month. You can also gain meaningful insights into your market’s occupancy rates, facilities, and trends. 5. Create a distinctive selling proposition

After researching your competition, you’ll have a better knowledge of their strong and weak points. You’ll be able to shape your offer to stay ahead of the competition using this information.

At first, positioning your rental as the lowest can provide you with an advantage. On the other hand, this technique will not help you optimize your revenue in the long run. Keep your price competitive and give a distinctive guest experience if you want to make money with Airbnb.

Consider what your competitors lack in terms of amenities or services. A smart lock for self-check-ins, a digital guidebook, a hot tub, and other concepts are just a few examples.

Make sure your property images show off your home’s unique selling characteristics and that your description provides enough information about it.

Is it profitable to run an Airbnb?

Because your profit depends on many things, there is no straightforward solution to this question. Some hosts make approximately $10,000 each month, while others only make a couple hundred. However, if you manage numerous houses in a major tourist region, you can make a good living.

Other things can have an impact on your rental profit. Seasonal trends, the type of property you have on offer, and your pricing approach are all factors to consider.

Long-term rental vs. Airbnb

A high occupancy rate on a short-term rental can make you more money than a long-term lease. You can charge a higher nightly cost and adjust your pricing whenever you choose with your home on Airbnb.

In Boston, for example, the average apartment costs around $2,800 per month. If you rent out your property for a year, you’ll earn $33,600 in gross income. In Boston, for example, the average weekly rate for a short-term rental is $150.

You’ll make $45,000 in gross income if you rent it out for 300 days. You can keep rates higher during peak season and special events to optimize your revenues.

Before starting your own vacation rental business, it is best to complete your research and weigh all of the advantages and disadvantages. Though you can earn more money with an Airbnb, your earnings may be inconsistent based on seasonal trends. On the other hand, long-term rentals can provide a more consistent income.

What extra services can I sell on Airbnb to make money?

Offering extra services to your Airbnb visitors is a terrific way to supplement your income. Another benefit is that providing something extra might help you differentiate yourself from the competition by improving the guest experience.

Here are eight ideas for additional services you can provide to help you get started:

1. Tours with a guide

When tourists arrive in your region, they will very certainly pay for local guided tours. You can assist them in accomplishing something that was most likely on their to-do list by providing tickets for a guided tour. Form cooperation with a local tour provider to provide your guests with discounted tickets.

2. Renting a bicycle or a motorcycle

Provide bicycle or motorcycle rental as an additional option to make it easier for your guests to travel around. For many Airbnb hosts, renting a bike or motorcycle is a popular way to supplement their income. It can help customers save time searching for a rental business in your neighborhood while increasing your earnings. Guests will almost certainly need to rent a car for the duration of their stay at your resort.

3. Pick-up and drop-off at the airport

Travelers will appreciate your efforts to make getting to and from their flights as simple as possible. Make sure it’s affordable; otherwise, guests may decide to use Uber or another vehicle service. You might also hire a local transportation agency to arrange rides for you and charge a fee for the convenience.

4. Additional cleaning

Cleaning your rental once before visitors come will not suffice if they stay for more than a week. Offer extra cleaning as an extra service if you want to make more money on Airbnb. Discuss how often a cleaning service should come to clean up with your guests. Negotiate the price before they book, so they aren’t surprised by additional charges at the end.

5. Admission to events

Consider offering an event package to your guests if an intriguing event occurs in your region. To entice travelers to book with you, offer tickets or passes and promote them in your listing description and title. This will save them the trouble of looking for the tickets themselves. Guests will thank you with five-star reviews and may even give you a social media shout-out.

6. Prepared meals (breakfasts, lunch, dinners)

Though leisure visitors prefer to dine at local eateries, business travelers like the option of providing meals. They are willing to pay more for convenience, particularly if breakfast is served. Consider adding this extra service to your listing if your area is popular with business travelers.

7. Dry cleaning and laundry services

Having laundry and dry cleaning services is a huge plus for business travelers.

Including hotel-style services at your rental will entice business travelers to choose your property above others.

8. Prepare for a major occasion by decorating.

A lot of individuals utilize Airbnb to travel for special occasions. You can assist them in celebrating an anniversary, birthday, or another event. You may use your Airbnb to make more money by providing decorative services. Guests will enjoy the opportunity to avoid worrying about this once they arrive.

How can you persuade guests to purchase more services?

Explain how additional services will save your guests time or money to pique their curiosity. Add information on additional services to your listing and describe them in a way that will catch the attention of travelers.

Travelers to Venice, for example, will be wowed by the possibility of taking a gondola ride as part of their stay. If you reside in a rural location, renting bicycles or motorcycles to guests will allow them to enjoy gorgeous rides.

Keep in mind that you must be truthful about the value of your additional services. Excessive marketing may deter your guests from making a reservation with you. If you want to make money on Airbnb, consider that long-term profits are always preferable to short-term gains.

What is the best way to charge for extra services?

If you’re looking for a means to charge guests for extra services, there are a few options:

1. Special Deal

You can create a special offer on Airbnb if a guest contacts you and asks for one of your extra services. You can create bespoke pricing for your guests by using the special offer function. Only send a special offer when you’re ready to confirm a booking.

The cost of the additional services will subsequently be factored into the final bill for the guests. Inform your guests that any additional expenses will be added to the total amount at the end of the transaction.

2. Request for Changes

You can design a limited-time promotion that only applies to pending reservations. This option will not be available in your guest has previously made a reservation request or confirmed a reservation.

You’ll need to change a reservation and update the overall price in this situation.

Ensure the total price (including cleaning and other costs) in the amount box when requesting a change.

3. Request for a Resolution

The simplest approach to charging customers for extra services is to send a resolution request. This option is available before, during, or after the guest’s reservation. Select “Request payment for extra services” from the Resolution Center.

You only need to include the cost of the additional services if you choose this option. Another advantage is that the cost of your additional services will be invoiced separately.

Your overall price will not change, ensuring that your guests are not confused at the checkout.


Whether you are a part-time or full-time host or property manager, making money with Airbnb needs effort and organization.

The secret to making the most money is to keep your calendar filled while keeping your prices reasonable. To go the extra mile, try to delight your guests by giving them a unique experience and additional services.

Consider automating your business to keep it under control. Vacation rental software such as Lodgable can almost run your business for you. The following functionalities are available to you:

  • Use the powerful Lodgable channel manager to manage reservations from Airbnb, Booking.com, and Vrbo/HomeAway.
  • Connect your stripe account to easily take payments
  • Use our custom website builder to build your own direct booking site.
  • Manage your rentals all from one simple dashboard. 
  • Use our dynamic pricing tool to maximize your revenue. 


Leave a Comment

Grow Your Vacation Rental Business!

No matter the size of your vacation rental business, you can benefit from Lodgable's state-of-art software. Click below to get started!

Related Articles

Let’s Get Started

Lodgable now offers the fastest response times in the industry during business hours. Learn more about how our state-of-the-art software will help grow your business today!

Grow Your Vacation Rental Business! 

Chat With Us

Chat Now




The Product