How to Make Money on Airbnb?

Make Money on Airbnb

How to Make Money on Airbnb by Davu Siva

For beginners, the title of this article can be a little surprising. But yes, you read it right. You can make money on Airbnb, even without owning a property. Airbnb is known for its cheap alternatives to lodging and accommodation. However, they are more than that.

As almost everything is transitioning online, fields like real estate have also opened more opportunities for people to earn passive income. Airbnb can also be a source of passive income. Who would have thought that a house-sharing app could be so popular? It is so famous that it has become a disruptor of short-term accommodations today.

Airbnb has changed the game – not only on real estate but also in money-making. This article will show you how to make money on Airbnb, even without owning a property.

What Is Airbnb?

Airbnb is an online marketplace popular for its accommodation services. It was founded by Brian Chesky, Joe Gebbia, and Nathan Blecharczyk in San Francisco, USA. Their story goes way back to 2008 when the two founders decided to rent out their air mattresses to pay for their rent. Called initially, Air Bed and Breakfast, the founders profited on this idea and built their vision around it.

Aside from offering cheap alternatives to hotels, Airbnb has set its own identity by being more than just a lodging company. The founders wanted to showcase local experiences in their community. This was evident in their first hosting experience, where they provided more than just beds. They offered breakfasts to their guests and toured them around their neighborhood.

“Locals providing local experiences.” This is the vision that guided Airbnb to what it is today – a renowned business with an estimated value of 31 billion dollars. As of 2019, Airbnb has more than five million listings in 191 countries worldwide.

Airbnb is a fast-growing business. Today, they do not only rent out rooms, but they also offer homes, apartments, condominiums, and in some cases, castles. This wide range of listings enabled Airbnb to expand its market. Now, even high spenders are welcome to live wherever they want to as long as the property is available.

Over its 12-year existence as a company, Airbnb has serviced approximately five million users. This number is expected to grow as Airbnb’s market is expanding. Of these five million users, almost half are hosts who offer their properties for rent.

How do Airbnb property rentals work?

Since its launch, Airbnb situated itself as a solution for both renters and providers worldwide. Aside from guests scoring cheap accommodation for a night or two, homeowners can also rent their available space and earn some cash on the side.

When they first established themselves as a house-sharing website, Airbnb has encouraged homeowners to rent their properties for additional income. As they gained ground in the real estate industry, buying vacation rental properties also rose to popularity. Vacation rental properties are private properties that serve as alternatives to a hotel. They can be condos, apartments, villas, cottages, log cabins, beach houses, and any other livable space.

Nowadays, people are looking into vacation rentals as a passive source of income. Aside from having a rest house during vacations, property owners can also maximize their investment by listing it on Airbnb. For some, these owners are also the managers. This means that they personally curate and maintain the listing. They are also the ones who answer the queries from interested guests.

Property owners who double as managers can earn $15,000 to $30,000 for a two-bedroom apartment. The pay is enormous, and some people are actually making a six-digit salary out of them. However, in most cases, property owners do not have the time to answer all accommodation requests. This is where they hire someone who can do it for them. This concept is called an Airbnb arbitrage.

What is Airbnb Arbitrage and Is it Legal?

An Airbnb arbitrage is an investment strategy that allows people to become Airbnb hosts, even without owning a property. In the context of Airbnb, this happens when an investor rents a property from a landlord, lists it, and earns the profit in between. Essentially, it is renting an apartment or any property and subletting it to Airbnb guests.

This strategy offers many advantages. On top of that list is its cost-effectiveness. Rather than investing a huge sum of money in buying a property solely for Airbnb business, this strategy costs less. It is also straightforward and easy to implement. You will be doing most of the groundwork of marketing the property, yes, but with less hassle with paperwork.

Speaking of paperwork, you might be wondering if Airbnb arbitrage is legal. The answer is yes. You just have to come clean with the owner and inform him or her about your intentions on the property. Once you get the go signal, prepare to do the nitty-gritty to make your own money out of it.

How to Make Money on Airbnb?

Now that we established that Airbnb Arbitrage is legal, there are other ways to make money. Again, you don’t need to own a property to earn in Airbnb. There are even far more creative ways for you to earn without becoming a host.

1. Airbnb Arbitrage

As discussed before, this rent-for-rent strategy is one of the most effective and commercial ways to earn in Airbnb. Find properties that you think would do well and sign a long term lease for it. After listing it, you can profit off in every booking made. Sometimes, it pays more than enough for your actual rent of the property.

2. Manage properties

In connection with Airbnb arbitrage, becoming a listing manager is also an excellent way to earn money. In one way or another, some property owners may have considered listing their properties in Airbnb. Your job as a manager is to make the process easier by personally handling it for them.

Find leads who are interested in renting out their property. You can find them on websites like Craigslist or Oodle, where most of the real estate properties are posted. Contact them and arrange a meeting with the owner or landlord. Pitch Airbnb and encourage them to list their property in Airbnb. Show them the figures that they could potentially earn to be more productive.

They could be skeptical at first, especially those who have never heard of Airbnb before. This is where you could pipe in and offer your services of becoming their middleman. This includes the whole package from checking the amenities, taking photos, and listing it on Airbnb’s website.

Listing a property in Airbnb is free after you’ve signed up. In each reservation, a 3% Airbnb host service fee is charged to help cover the operations. There are several ways to make your listing more popular, and you can quickly learn them online. Having basic skills like photography is also a plus. Once you successfully post your listing online, your tasks would mainly revolve around replying to guest messages and helping them check-in. You also need to turn the property over after every booking and regularly check its amenities.

Property managers can earn 10-20% of the total revenue. This is subject to change depending on your arrangement with the owner and how often the place gets booked. Being an Airbnb host takes a lot of work, but it sure pays well. This side hustle is popular for those who want to venture to work at home opportunities.

3. Rent furnished properties

This strategy is similar to Airbnb arbitrage. These properties can be houses, apartments, and even hotel rooms. For hotel rooms, you just have to coordinate with the owners (usually local hotels) to get started. This is an advantage for you because most of these properties already have their own amenities. You don’t need a significant capital here to get started.

4. Be an Airbnb House-Sitter

Another opportunity is house sitting. This strategy works best for your family or friends who have properties that can be used for Airbnb accommodation. Discuss the pros and cons of Airbnb and encourage them to list their vacant rooms, basement, or their whole house while they are away. The owners can work out a commission for you, depending on how many bookings the property can acquire.

5. Co-host an established Airbnb property

Similar to being a property manager, co-hosting an Airbnb property can also be profitable. The job entails responsibilities identical to being a concierge or consultant.

To be a co-host, approach the host of the property via Airbnb or their other contact details and arrange a meeting.

Once both parties agree to the terms, the original host will send you an invitation to share their listing. Accept it, and you can have access to their calendar and other information. Of course, make sure that you have background experience in hosting a property. This will help you seamlessly get into the job.

The payout on this method can be lower compared to the previous ways, but it could still give you the extra cash. After all, you could always mix and match other methods to have additional streams of income.

6. Be an Airbnb Affiliate

Affiliates are people who advertise a product or service owned by someone else. Simply put, they are brand advocates. They endorse the items on their own platforms and share their experiences with others. This is one of the indirect strategies to get paid in Airbnb. You can have several perks from being an affiliate too.

To vouch for a product, you need to test it. Some property owners may invite you to their listing and offer you a discount. But you can always opt to approach them first. However, the catch is, you should have enough reach and audience first to become an affiliate. Affiliate marketing works if the people who testified for something are famous and/or credible. If you are already an established personality, you can go to this route.

Earn money by getting a commission on every booking the property receives after your recommendation. In some cases, you can have your discount code people could use if they want to stay in the property.

7. Subscribe to the Airbnb Referral Program

One of the easiest ways to earn, the Airbnb referral program allows you to earn rewards when you refer someone. Upon signing up, you can generate your unique referral link that you can share with others.

A $55 credit is given to the person who signed up in Airbnb and booked a house using your code for the first time. After they completed their booking, you will receive a $25 credit that you can use for your future bookings. Although it can’t be converted to cash, this is still a good deal that you can use every now and then. It is also more user-friendly than affiliate marketing because anyone who has an account can do it.

8. Create an Airbnb Experience

Following their vision of providing local experiences, Airbnb is also welcoming an opportunity to become “experience hosts.” Some of their most popular activities in Airbnb Experience are:

• A guided walking tour around the city
• Cooking class with local chefs
• Art class on pottery and traditional art        
• A hiking trip in the mountains
• Camping adventure in the forest 

They also recently launched a category for Airbnb Animals, where they promote animal tourism. They follow the World Animal Protection guidelines, which ensure that the activities here are safe and ethical. If you have a farm or animal café, this could also be an additional source of income for you.

Almost any activity can be accredited on their website. The procedures are also similar in listing a property, so you should be familiar with it. Airbnb Experiences are verified for their quality, and their employees review them before publishing it online.

This personal approach is what makes Airbnb one of the leading companies today. You have probably heard of the phrase, “Eat like a local, Live like a local.” It is one of the common tips seasoned travelers would always recommend. Airbnb makes that happen.

Aside from getting acquainted with local hosts, renters could also get to see and experience the community in the place they are staying in.

Conclusion

These are some of the tested and proven strategies to earn in Airbnb. If you want to take this seriously, you can enroll in courses that specialize in this. Udemy offers an online video course entitled “How to Create an Empire on Airbnb without Owning a Home” that can help you further.

As described by its founder, Brian Chesky, at a 2015 conference, Airbnb’s mission is “creating a world where you can belong anywhere and where people can live a place, instead of just traveling to it.” Now that traveling has become more accessible, Airbnb has become a relevant platform for people who want to maximize their trips.

Airbnb has a lot of potentials, and it is expected to grow more in the next few years. Today is a good time for you to start investing in it. As shown in this article, you don’t need to have a huge capital to start. You just need to be knowledgeable and creative in making your way around it. Take a shot in exploring Airbnb and make money even without owning a property.

You may check out Make Money on Airbnb by Sally Miller if you want to further increase your knowledge on becoming a successful Airbnb host.