Airbnb is one of the worlds biggest marketplaces, where hosts are empowered to advertise their home, space or local expertise to potential renters. This could literally be a sofa bed in your lounge room, a boat moored to a jetty or an entire castle.
Like the Uber of the travel world, Airbnb provides it's hosts with access to a large pool of potential guests. But like Uber, there are some key steps to make sure you're setup properly so you can earn income.
In order to sign up to be an Airbnb host, simply head to the page, click the sign up button and follow the prompts.
Listing your property on Airbnb is free, and you can opt to offer your space for any price that you desire. Airbnb acts as the middleman between the host and the renter, mediating any issues, governing over minimum requirements, offering protection and providing the forum through which both parties can rate and review each other.
When someone books your room, Airbnb charges a standard host service fee of 3% of the listed price. This can slide up to 5% depending on the cancellation policy you set. So, if you set a cost of $300 for a room per night and someone stays a single night, you will receive $291 and Airbnb will receive $9. Airbnb also charges a guest service fee to the person who rents the space. This is between 5% and 15% depending on the length of the stay, the characteristics of the listing, the final subtotal and other undisclosed factors. This fee, however, affects the guest only, not the Airbnb host.
How much money can you make on Airbnb?
It varies based on your property, location and how well you list it. The one factor that stays the same however is the fee that you're charged.
Updated December 12th, 2019
About this guide
For this guide, we spoke to three actual hosts to uncover the best practices to maximise your income.
Angela was a real estate agent who decided to rent out her own property on Airbnb as a test. Her business now focuses on property management for Airbnb listings.
How much do clients make on Airbnb?
One property she manages makes $1,200 per week (after being fitted out).
Australia is a growing market for short-term rentals, which make up 11.8% of tourist accomodation in Australia1. In just Sydney alone, the number of Airbnb reservations went from 28,000 to 41,000 from 2016 to 20171. In other words, it's a great time to get in.
As one of the most expensive countries in the world for housing, it probably comes as no surprise you can make a lot of money renting as an Airbnb host.
In fact, in 2017, Airbnb hosts across Greater Sydney charged an average of $150 per night for a house or apartment. If you're looking to rent a private room, you could make on average $59 per night and $39 for a shared room.
However, it's not just the cities where Airbnb is popular. Jindabyne in New South Wales for example, a popular skiing area, has average accommodation rates of $130 per night. Similarly, Baron Heads in Victoria has an average rate of $140 per night.
3 tips to to maximise income on Airbnb
While it might seem like a lot of work, you don't need to give up your day job to be an Airbnb host. Here are our key tips to maximise how much money you can make:
1. Work out how much you should charge
Using the map function on Airbnb or its price comparison tool, look at what other people are offering in your area. Of course, if you're planning on renting a private room for example, filter your search to private room accommodation.
Compare similar properties
To make sure you get the most for your accommodation, make sure the properties listed are also similar in terms of location, cost and amenities. For instance, if you happen to live nearer to transport links than competing properties, then you might be able to raise the price of your accommodation. It's also important you consider amenities like shared or private bathrooms and look at who else has them in your area.
Vary the price during the year
After you've calculated the average nightly rate, make sure the cost listed by other hosts is actually representative of what is listed. A lot of hosts put some dates at a low rate for only a few days a year so that Airbnb lists it at this price. However, they will generally have higher rates throughout the rest of the year.
"I manage pricing differently for on and off-peak seasons. For example... Sydney festival, Chinese New Year, etc", says Angela Carrick from Air Design Australia.
I manage pricing differently for on and off-peak seasons. For example... Sydney festival, Chinese New Year, etc.
Tip: Traditional lease and short-term rentals earn different incomes
While traditional leasing generally guarantees a more steady income, if managed properly, the potential income of a short-term rental is significantly higher.
Having said that, there are some added expenses you'll need to factor in that you otherwise would not on a traditional lease. These include supplies, utilities such as electricity and water and cleaning costs for each guest.
2. Beef up your listing to get more bookings
Professional photos are a must.
Take pride in your home and sell its uniqueness. Unlike hotels or hostels, your home has personality, which is a huge selling point for Airbnb. What does your home say about the suburb, town or city you live in?
It's all in the photos
Whether it's a passion for art or you're a huge animal lover and have a pet dog, don't be afraid to show that off. You can do this by taking lots of good photos. Raeleen from Mudputty explains "It's about getting seen, so professional photos are a must."
Prospective guests want to be assured that where they're planning on staying is clean, tidy and comfortable. Your photos should reflect this as well as your home's personality. Photos should make your home or room look as welcoming, light and spacious as possible.
Here's an example of how Angela Carrick styles a room for photos:
Focus on the quirkiness of the property such as the decor and soft furnishings...One property I manage has a vintage record player with vinyls for example....Indoor plants work a charm!
If photographs aren't your strength, getting a professional to take them is highly recommended.
Photo: Angela Carrick
3. Make your guests' stay amazing to get good reviews and become a Superhost
While pictures are important, they need to live up to expectations. Becoming a Superhost can really boost your profile and help you stand out. Here are some of the tips worth following to reach this status.
It's hospitality at the end of the day, people expect hotel service.
While you're selling the appeal and personality of a home, keep it as clean as a hotel. "It's hospitality at the end of the day, people expect hotel service" Notes Raeleen. "I used things like organic sheets and coffees to capture the health conscious side of the market. I also had books for kids."
Provide your guests with good sheets, linen, towels and toiletries.
Keep all this separate from your own stuff to keep them in good condition for your guests. Be respectful, give them privacy and listen to all feedback.
Add a few unique amenities such as items that different people will love such as a guitar or books for kids. This can make your listing memorable after a guest has finished their stay. Tom mentions that he featured some his own photos, which guests really enjoyed.
I included some of my own photos in the room which our guests really enjoyed.
Have a clear check-in and check-out time with a fee for every hour they're late. That way, if your guests don't check out on time, they're obligated to pay. You should also include a security deposit in case something goes wrong.
Cleaning fees are common practice with Airbnb. Whether you keep the fee, do the cleaning yourself or hire someone, is up to you. Paying a cleaner may be easier if you have back-to-back bookings and work full-time.
Is your home right next to all the good restaurants, shops or beaches? Consider all the great attractions around you and don't be afraid to get specific when you describe them. Let your guests know all they can expect. That also means being honest. If it's a small room with a single bed, let people know that. Lying will only result in heightened expectations and bad reviews. If you have pets, be sure to mention it. One of the perks of Airbnb is that a friendly puppy or dog is often there to greet guests when they arrive.
Raeleen emphasises this point:
You are competing with others, so call out what's unique...but be honest too. For instance – if the window looks out to a brick wall.
Nobody knows your area like you, which is why it's worth creating your own guidebook. Let your guests know about all the best spots and places you've discovered over the years. It's also good to have instructions for how to use everything, from the washing machine to the television.
Anyone who travels knows the most stressful point of the trip is arriving at your accommodation safely. Downloading the app ensures you can communicate with your guest even if you're not there to greet them.
If you want to maximise your profit you have to be ready to allow last-minute stays and one-night stays. This means you are on call.
- Raeleen
Picture: Getty Images
How much time do I need to put into Airbnb?
Becoming a host can be time-intensive if you're also working a busy full-time job or running a business. You need to be flexible enough to get to the property whenever guests need your help or you risk neglecting them.
If you work far from the place you're renting and aren't able to leave, or if you need to travel for long periods of time, you might consider using a property manager for Airbnb. For a percentage of the fee you're charging, a property manager will take care of everything while you're gone.
What if I don't have a property?
If you don't own a property, you can ask your landlord for permission to sub-let your room. If you can't sub-let, there are other ways to make make money on Airbnb too.
Becoming an Airbnb experience guide
Airbnb isn't just about renting out your house or a spare room; you can also make money as an Airbnb experience guide.
If you have an experience you think is unique and might enhance a tourist or visitor's stay, you can host an experience. It can range from showing visitors around town to taking a cooking class.
The most important thing is you plan your experience, know it inside out and try and deliver something unique. Put in just as much time and effort as you would for your Airbnb listing, taking the time to put together a detailed itinerary and pictures showing your experience off.
Risks to consider
Before becoming a host, it's worth considering some of the following risks and how you can avoid them:
Safety: While it's unlikely, you don't want to give guests the chance to steal valuable possessions or your identity. That's why you should always find a safe place to put any sentimental possessions, bank statements and tax returns. It might be worth investing in a safe for some of these things for peace of mind.
Insurance: While Airbnb provides insurance for property damage, it isn't a substitute for home insurance as it can't protect against personal liability or theft.
Guest refunds: You may be required to refund a guest's payment if you're responsible for making a mistake, such as forgetting to leave a key, misrepresenting your listing, cancelling at the last minute or leaving your home dirty.
SGS Economics & Planning 2018: What impact does Airbnb have on the Sydney and Melbourne housing markets?
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Frequently asked questions
There are plenty of benefits to being an Airbnb host, but also a couple of negatives that you need to be aware of.
Pros:
It provides an income stream from an unused space.
It provides a social platform through which you can meet and engage with people from all over the world and even make lifelong friends.
For those already in or considering getting into the hospitality or travel industry, it builds fantastic experience.
It gives you complete control over your listing: how much it goes for, who stays there and when it is available.
The additional income can free you up from your own work commitments and give you more time for recreation, hobbies, vacations or family.
There is a larger community of hosts on Airbnb that you can immerse yourself in. Hosts engage with each other on the Airbnb forum and also have face-to-face meetups.
You can develop an additional income from your skillset or your day job by expanding out to offer Airbnb Experiences.
Many hosts love the process so much that they embrace it to the point of making a career change.
Cons:
You need to deliver on the service and features you promise in your listing each and every time to maintain your reviews and reputation.
You need to respond to any and all enquiries in a timely fashion.
A stranger will be in your home, potentially sharing a space with you. Although, you can look up their reviews before they stay and vet them for potential personality clashes.
There may be extended periods in which you don't receive a booking.
Your property will experience general wear and tear, which you will need to address.
More listings could appear in your area, requiring you to add features to your space or be more competitive with your pricing.
If you are looking to sublet you may need to get permission from your landlord, or even split the profits.
Guests may require you while you are in the middle of something else, disrupting your life.
Letting a stranger onto your property always comes with an element of risk and fear. Airbnb seeks to guarantee peace of mind for hosts with protection in place, for free, for all bookings. The Host Guarantee ensures that any property damage caused by a guest of up to $1,000,000 is reimbursed.
Note: The Airbnb Host Guarantee does not replace insurance that may cover your valuable contents, your pets or even yourself. The Host Guarantee does not protect any cash you have in your home, any animals, your personal liability or any damage to property in shared or common areas. That last point is particularly important to remember. If you have items in your house such as jewellery, art, technology or similar, then proving that these were damaged by your guest can be hard. You should retain your current home and contents insurance policy to ensure that these items are fully covered.
There is a secondary program that Airbnb Hosts are also enrolled into as soon as they list their property. That is the Host Protection Insurance program, which protects you from claims made by your guests of up to $1,000,000. This could be in relation to property damage or bodily injury, for example, a guest falling down the stairs and breaking their leg.
With Airbnb, the host is free to charge whatever they feel is right for their space. Airbnb is effectively a middleman that then takes a 3% commission from the amount you, the Airbnb host, set. Airbnb will send you your money, via the payout choice that you have selected, 24 hours after check-in time, unless you are a new host. For a new host, there is a 30-day buffer in place before the first payment can be made. So if you have a reservation on the first day that you sign up to be an Airbnb host (unlikely!), you will have to wait 30 days to get paid. If you have your first booking 31 days after you sign up, then you will only have to wait the standard 24 hours.
However, even after Airbnb has made the payment, other elements can delay the process. For example, weekends or public holidays, or other processing delays. Processing delays will occur for:
Direct deposits: Up to 3 business days
Bank transfers or international wires: 3-7 business days
PayPal: 1 business day
Western Union: 1 business day (US Pacific Time)
Payoneer prepaid debit card: 1 business day
A much sought-after reward for any Airbnb host, a Superhost badge is a privilege granted to those who go beyond simply offering a space for people to stay and fully take on the role of being a host. There are four boxes you need to tick, which are evaluated at four intervals during the calendar year:
At least 80% of your reviews have to be five stars.
You must never cancel a reservation made by a guest.
You must respond quickly to questions (within 24 hours) and you must have a response rate of more than 90%.
You must host at least 10 Airbnb Trips, which includes offering Airbnb Experiences. We have plenty more info on Airbnb Trips right here.
As well as the badge, which is an indicator that guests can look for when searching for a place to stay, there are other perks. Perhaps most importantly, guests can search using the Superhost filter, which helps push your property to the top of the list and allows you to charge more of a premium for your listing. You can also get access to new features first, as well as invites to exclusive events, priority support and, if you maintain your Superhost status for more than a year, a $100 travel voucher.
It's safe to say that if you are setting yourself up to be an Airbnb host, then you are not looking at renting out your property – at least in its entirety – in the traditional fashion to a tenant. If you are looking to buy an investment property for the purpose of Airbnb, it's wise to consider the location of that property. While the Airbnb service thrives in many locations around the country, in others it does not, especially those that are off the beaten track. In these locations, renting out your investment property to a tenant would probably be a better source of income, and you should do your due diligence in understanding the number of travellers that could potentially come past your desired location. Does demand outstrip supply? Do you supply something unique to the area, such as the best view, the best proximity to popular sights or an awesome feature like a spa under the stars?
It's never easy to work out what something dear to you is actually worth to an impartial eye browsing through all the listings in your region. Seeing your property from the perspective of a guest – potentially a foreign guest with different cultural values – takes plenty of research and lots of listening. Here are a few factors to consider:
What is the demand in your area? Do a search and see what the availability is like for spaces similar to yours. This will determine whether you need to price competitively.
Examine the relative prices of other Airbnb properties in your area. Find some that have similar offerings in terms of location, rooms and features and see what prices they are going for. Are they booked out? Is your space better or worse?
Establish the estimated daily water, electricity, gas and Internet usage as well as other amenities in your space. In particular, if you have any unique features that consume a lot of electricity, such as a heated pool or spa or reverse-cycle air conditioning, you will want to factor that cost into your profit line.
Do you want to entice longer stays by offering a cheaper mid-week rate?
Have you considered seasonal changes? Perhaps in periods of high demand, you won't have to be as competitive with your pricing?
Did you or do you need to do any renovations or repairs to get your property Airbnb ready, and will that impact the following point?
What is the tipping point at which hosting your space isn't worth your while? It's worth knowing this so that you don't set unrealistic expectations.
Anyone can request to be an Airbnb host as it is free to sign up, but if you are renting the property that you plan to list, you're entering a grey area that you'd be wise to negotiate correctly. Subletting through Airbnb is permissible by the Airbnb host program, but may not be through your lease, landlord or another organisation related to your property. For example, an apartment building might set its own rules that landlords and therefore tenants must follow.
If you're considering subletting a property you rent through Airbnb, there are some simple steps you can take to ensure that everything stays above board.
Let your landlord know. For many new leases, a clause will be written in saying that subletting requires written consent from the owner, so why not ask for it? Be prepared to explain what parts of the property will be used by potential guests and what your terms will be on Airbnb. For example, you may say "not suitable for children". Be sure to let them know that any guests will be covered by Airbnb's $1,000,000 Host Guarantee and $1,000,000 Host Protection Insurance. Also know that the Airbnb community vets guests and hosts through reviews, ensuring a high standard for both sellers and consumers.
Establish clear ground rules for guests that can be communicated to interested parties such as neighbours, landlords and building organisations. For example, the frequency of guests, how many can stay at one time, what number to call in an emergency, your pet policy, noise restrictions and code/key restrictions.
Make sure neighbours are on board and can get in contact with you if they are unhappy with anything. Complaints from unhappy neighbours may put your lease in jeopardy.
You may want to consider a system where you notify your neighbours and landlord when someone books your property so that nobody is caught by surprise.
You could also consider the Airbnb Friendly Buildings Program, designed for those who want to sublet through Airbnb but have come across resistance from other involved parties. The concept involves complete transparency of the process and, potentially, a revenue share. The program organises and ratifies the agreement between a landlord and a tenant, or potentially a number of landlords who own properties in the same complex or apartment building.
This is a great way for a property owner to retain a long-term relationship with a tenant, while finding a way for both of you to make some extra money from any spare or unused space.
The number of businesses and companies turning to Airbnb for their travel requirements is growing at quite a rate. In 2016 alone, the number of bookings made for business trips either internationally or domestically tripled. Over 250,000 companies now use Airbnb to book accommodation for staff. Hosts can list themselves under the Airbnb for Business category if they meet certain criteria that lend themselves well to this kind of traveller.
Some of the factors that Airbnb looks at when deciding if a host can list under the Airbnb for Business category include:
24-hour check-in.
No host cancellations within seven days of the booking.
Wireless Internet included.
A laptop-ready workspace.
Essential amenities (eg, a hair dryer, clothes hangers, a clothes iron, shampoo and toiletries).
Security.
Smoke and carbon monoxide detectors.
Entire homes for team-sized bookings.
If you were thinking of renting your dog kennel out to a poor backpacker, think again. It's Airbnb's aim to be considered the best online destination for great and unique accommodation options at the best price. In order to deliver on that, they need to set and stick to a certain standard. The core principle of that standard is trust, and the company breaks trust into five key areas that make up the minimum standards and expectations for a host. Here is a guide to Airbnb's host standards, most of which are fairly obvious.
Safety:
Do not harm yourself or others staying in your space.
You should not threaten anyone staying in your space or communicating with you though Airbnb.
Do not create any hazardous situations for a guest, such as dangerous pets, flammable materials, blocked escape routes or unfixed weapons. You and any other people that live with you should not be carrying an infectious disease while you have guests.
Repair anything that could impact guest safety, such as a broken handrail on a balcony or exposed wires. Other issues less urgent of repair, such as a leaking tap, should be identified in your listing.
Make sure local emergency numbers are clearly visible and that you have laid out directions to the nearest hospital and (if applicable) vet.
Ensure a first-aid kit is easily available as well as a fire extinguisher.
Provide a functioning smoke alarm and carbon monoxide detector and ensure that your property meets government safety guidelines.
Provide a clearly marked fire escape route and a map of your home.
Know and do not exceed your safe occupancy limits.
Make sure the listing is safe for children, unless you declare in your listing that children are not welcome.
Ensure your property is correctly ventilated, that temperature control devices are functioning and that detailed instructions of use are provided.
Security:
Don't use or break a guest's property, enter the space that is theirs to use without permission or make threats about bad reviews to coerce a favourable result.
You should not make any transactions outside of the Airbnb ecosystem.
There should be no undisclosed or ill-sited cameras in your listing.
There should be no violation of others' privacy, copyrights or trademarks.
Be aware of and comply with applicable federal, state and local laws.
Make sure guests are aware of all building rules where applicable, including parking, party, pet and noise policies.
Fairness:
You should uphold the law, treat people with respect and not practise anti-discriminatory behaviour.
Don't share personal information about your guests with any other party.
Do not encourage your guests to disturb common spaces.
Make sure you don't treat your neighbours as your Airbnb's reception.
Make sure you always respond to neighbour or community concerns.
Authenticity:
You should not provide inaccurate information about yourself.
The information about your availability and your listing, including its features, type, hazards and habitability issues, should be 100% accurate.
Your reviews should always be honest and constructive.
Consider the space you list to be a place where people can feel like they belong, not just as a means to a transaction.
Reliability:
Your space must be habitable. It can't be of sub-standard cleanliness or repair or have undisclosed utility issues such as no running water or electricity.
The listing must be a space (so it can't be camping gear) and it must be stationary (so it can't be a moving boat).
Outside of extenuating circumstances, you can't cancel after the deadline.
You must respond. Answer booking queries before the guest's stay and answer requests during their stay, ensuring that your contact details are accurate. If you enter a resolution process, you must also be on hand to respond.
Be aware that consistent low ratings can result in your listing being removed.
If you run a professional hospitality business, such as a motel, estate, hostel, eco lodge, timeshare, boutique hotel, wedding venue or retreat, and you want to book guests through Airbnb, you will be happy to know that this is possible. However, Airbnb does look for some specific features in such listings, most notably:
A maximum of 25 rooms across the property.
Personality in the design of the guest rooms.
A local influence and sense of culture in the common spaces and in the guest rooms.
Surprising, non-traditional characteristics in the property that make it unique, such as being heritage listed.
An expectation that hosts will be hands-on and personally involved with the hospitality.
A focus on local services such as regional food, wine or entertainment.
Bespoke maps with personalised touches and recommendations.
You offer Airbnb Experiences or local tours.
The full-time availability of the owner or manager.
Can you claim Airbnb expenses, and what about GST? Tax expert Mark Chapman gives us the lowdown on what to look at when you become an Airbnb host. Read more…
Chris Stead is an award winning content creation and design specialist that dabbles in all subjects, but is best known for his work in technology, entertainment and gaming. When not writing, he can be found among the waves of the Northern Beaches.
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3. Make your guests' stay amazing to get good reviews and become a Superhost
