Airbnb business – How to start a profitable guest hosting business!

Wall St. Nerd


Updated on

January 13, 2023


Airbnb business - your side hustle opportunity to make some extra money with your property.

Self-actualisation is the essence of human nature. Sitting in an office Monday to Friday is not!


Almost everyone has heard of Airbnb - the online marketplace for property rentals -, which allows people to rent out unused short-term private accommodation, ranging from single rooms to entire houses. Airbnb was founded in 2007 and has grown very quickly since then. There are more than three million available accommodations listed on the platform, from more than 65,000 cities around the world. If you have rental space and are looking for extra income, learn how to start a profitable Airbnb business here.

How does an Airbnb business even work?

The first step is to become an Airbnb host and register your accommodation by submitting photos and descriptions of the accommodation for rent. Once your accommodation is listed on Airbnb, travellers looking for accommodation in the host area can view it. Guests can search Airbnb accommodation by various criteria, including:

  • Destination
  • Availability dates
  • Price
  • Number of rooms, bedrooms, and washrooms
  • Amenities such as breakfast, hot tub, and pets allowed, etc.
  • Language of host
  • Facilities such as parking, air conditioning, etc.

Before booking a selected accommodation through Airbnb, the guest can contact the host directly through the Airbnb messaging service for more information.


Airbnb offers mobile apps for Apple IOS and Android devices in addition to browser access.


For security reasons, the Airbnb platform requires hosts to submit an ID card or passport as acceptable identification. To build a trusted community, travellers can post reviews of accommodation (and hosts can rate guests). Reviews are not anonymous.

Services for guests

For guest safety, Airbnb offers a secure payment platform and payments to hosts are withheld until 24 hours after guest arrival. Airbnb has a 24-hour hotline in case of problems during the stay.


The host sets the price for the accommodation, and Airbnb charges the following fees:

  • Host: 3 per cent payment fee
  • Guest: 6-12 per cent booking fee

Hosts may require a security deposit and cleaning fee.


Depending on the jurisdiction, Airbnb may charge state, provincial, or city taxes for guest bookings.

Travellers prefer Airbnb accommodation

The best thing about an Airbnb business is that travellers prefer Airbnb to hotels, motels, or hostels for many reasons:

  • Cost: An Airbnb rental is usually much cheaper than a comparable hotel room. Depending on location, in some cases an entire house can be rented through Airbnb for the cost of a single hotel suite.
  • Live locally: According to statistics, one of the main attractions of an Airbnb stay is “living like a local.” Rather than renting a generic hotel room, most Airbnb guests prefer to stay in a neighbourhood and experience the feeling of living like a local.
  • Privacy: Airbnb guest are not constantly surrounded by hotel guests and staff.
  • Peace and quiet: Airbnb accommodation tends to be a little more secluded and does not suffer from the noisy activities of a hotel, such as guests leaving in the morning, room service, young children and traffic.
  • You can see in advance what you will get: Unlike a hotel where at best you only see a picture of a similar room, on the Airbnb website you get detailed photos and descriptions of each room.
  • Variety: Airbnb offers a huge variety of accommodations, from boathouses and yachts to lighthouses and castles.
  • The comforts of home: instead of a regular hotel room, Airbnb accommodation has the cosy feel of a living room (some even have pets). Guests who want to save money on food can prepare their own meals in the kitchen.
  • Space for family or friends: With Airbnb, you can save a lot of money by renting an entire house or flat for family and friends instead of several hotel rooms.

Is renting your space allowed or recommended?

Before you decide to start an Airbnb business, make sure you are legally eligible to become an Airbnb host in your country and are willing to comply with local laws and regulations!

Local laws regarding hosting paying guests can vary greatly depending on city, state, or provincial laws. In some countries, they are generally prohibited, while in other areas they are subject to tax.

For more information, see the Airbnb Legal and Regulatory Issues and Responsible Hosting websites.

If your space is a room or condominium, check if you are allowed to sublet the space. Flat property owners and condominium associations often have rules to prevent owners from renting out their units as Airbnb accommodations.

If you rent out your flat without your property owner’s knowledge, you could be kicked out. Relationships with your neighbours also play an important role. A few noisy or inconsiderate Airbnb guests can quickly cause a problem in the neighbourhood.

If none of these issues are insurmountable, becoming an Airbnb host can be a great business opportunity for you.

You feel obliged to become a host and on the other hand, you have certain financial expectations?

Before you finally decide to become an Airbnb host, you need to consider a few more points:

Do you want to start a business? Starting an Airbnb business is like starting a business – you need passion, entrepreneurial spirit and the willingness to put in the necessary effort, starting with the necessary background research and the creation of a business plan.

Do you have the time? Being a property owner can be very time-consuming, especially for short-term rentals. You will need to consider the following:

  • Manage your bookings and respond to messages from potential tenants.
  • Arrange a meeting with guests to hand over or collect the key.
  • Ensure that the accommodation is spotless and prepared for guests' arrival, including fresh bed linen and breakfast equipment (if available).
  • Deal with property maintenance issues such as pest control, plumbing, electrical, and appliance repairs.
  • Be available to your guests around the clock in case of problems with the accommodation.
  • What are your financial goals? Do you want to earn some money on the side or have a stable income? The financial section of your business plan should reflect research into your target market and realistic estimates of potential revenue from renting out your property. Income from an Airbnb rental depends on:

    Demand: tourist demand is the determining factor for the popularity and price of rental accommodation. The highest rental revenue points are:

    • Arrange with your guests to drop off or pick up keys.
    • Ensure that the accommodation is spotless and prepared for guests' arrival, including fresh bed linen and breakfast equipment (if available).
    • Deal with property maintenance issues such as pest control, plumbing, electrical, and appliance repairs.
    • Be available to your guests around the clock in case of problems with the accommodation.

    Seasonality: In a northern climate, demand for your property is likely to decrease dramatically in winter (unless you rent out a ski lodge). Conversely, in warmer southern climates, demand for rental accommodation drops sharply in the summer.

    Before considering whether you can quit your job and live off an Airbnb business, carefully assess the income potential of your property by checking rental rates and booking frequency for comparable Airbnb accommodation in your area.

    Additional costs: Besides the booking fees Airbnb charges, there are additional costs for hosting on Airbnb, including:

    1. Insurance: Normal homeowners' insurance does not cover business use of the premises, including renting on Airbnb. In the US, Canada, UK, and several other countries, Airbnb offers a free Host Protection Insurance programme that provides up to $1 million of insurance against a personal injury or property damage claim. If your region is not covered by Airbnb insurance, contact an insurance agent to learn more about proper coverage.
    2. Business licence: More and more cities require Airbnb hosts to have a business licence.
    3. Cleaning and repair: To keep your Airbnb host rating high, you need to keep your rental property in tip-top shape at all times. This means thorough cleaning between guest visits and regular maintenance.

    If you have to outsource cleaning and maintenance work, the costs will increase.

    Register and price your property on Airbnb.

    Describe your space accurately and make it stand out. Remember that Airbnb is an online marketplace. To maximise guest interest in your accommodation, you need to think like a real estate agent and set your listing apart from the competition.

    Start by researching similar Airbnb accommodation in your area and take note of the features / amenities and prices listed. (Create a spreadsheet if this helps).

    The description of your accommodation must be accurate, detailed, and complete, highlighting what makes it unique. Carefully describe the amenities and features of your space, as well as the rules or expectations for your guests.

    It is extremely important to provide high quality images of your accommodation.

    If you cannot do this yourself, Airbnb has a professional photo service in some areas. The fees will be deducted from your original booking.

    Keep in mind that your guest rankings are based in part on the accuracy of your listing description. You do not want guests to be disappointed because the accommodation is not as described, or you have exaggerated with the amenities.

    Set a competitive price for your accommodation

    Your research into similar offers should also give you an idea of how to determine and set your price for your accommodation.

    For guests to book your property on an ongoing basis (and for you to maximise profit), it needs to be competitive.

    Improve your host ranking

    Airbnb's rankings are like internet search rankings. The higher your property appears in the rankings, the more likely it is to be chosen by guests. The key to the success of your Airbnb business is to achieve a good Airbnb ranking.

    You can improve your ranking by building trust and providing a great experience for your guests.

    Build trust

    The Airbnb community is built on trust. Therefore, guests look for hosts who have verified contact information, references, and reviews.

    • Verify: Verification is especially important for new hosts. Update your profile to add more information such as phone number, email address, Facebook profile, etc. to reassure potential guests that you are a trustworthy host.
    • References: To build further trust, you can post references from friends, family members, colleagues, business partners, etc. You can also provide references for other Airbnb members.

    Provide excellent customer service

    As any entrepreneur will tell you, customer service is the backbone of a successful business. Being an Airbnb host is no different. Airbnb hosts who provide the best guest experience are rewarded with positive reviews, higher search rankings and more bookings.

    The most successful hosts are:

    • Accessible: Guests perceive Hosts who do not make an effort to respond to requests in a timely manner (or at all) as a major turn-off. In fact, Airbnb tracks your responses to guests and rates them accordingly. Hosts with the best response ratings are rewarded with higher search rankings and more bookings. With the Airbnb mobile app, you can stay connected with your guests at all times. Be available by phone at all times when guests are present, and always be available to them if they are staying for a longer period of time, to improve your service.
    • Update your calendar regularly: Updating the calendar will not only improve visitor experiences and reviews, but also Airbnb search rankings.
    • Fix any problems as soon as possible: If a guest reports a problem, for example a leaky tap or a burnt-out light bulb, fix it immediately and apologise to the guest. Five-star service is a sure way to improve your ranking.
    • Act on your reviews: If a guest gives a negative review, fix the issue and learn from your mistakes. Respond to complaints professionally at all times.

    Wish lists

    Airbnb's wish list allows you to keep track of your favourite accommodations and share them with other travellers. If you can be added to as many wish lists as possible, it will improve your Airbnb ranking. You can ask guests to add you to their wish list.

    Optimize your property listing on Airbnb.

    Danny's focus on getting your Airbnb listing to the top of search. It’s called Airbnb SEO (Search Engine Optimization). Depending on the package you purchase, he gives you Airbnb specific suggestions for your listing (Basic), create a custom report based on your listing with specific suggestions (Advanced), or rework 100% of your listing and send you a custom report with additional info (Superhost). Additionally, you will find hosting tips in all the reports as this is a big factor in your search rank (i.e. reviews).

    He also offers phone consultations, electronic guidebook creation, and other services.

    [Full Disclosure: I’m a compensated advisor and affiliate for]

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    Hi, I'm Alexander Kelm.

    Serial entrepreneur, value investor and angel investor. Founder of Wall St. Nerd. Join me here on to learn how to read financial statements, find healthy companies, and invest your money wisely.

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