How to start an Airbnb business in 6 steps

Starting an Airbnb business, like any other business venture, requires time, effort, and investment. Before becoming an Airbnb host, you should understand the rules and tax implications, carefully design your space, and research listings in your area to make sure your pricing is competitive.

Here's what the process looks like, along with other important steps to start your Airbnb business.

How to start an Airbnb business

To list your space as a vacation rental, obtain the appropriate permissions from your landlord, cooperative board, or homeowners association (if applicable). airbnb.

• Please read the rental agreement. May contain sublease clauses.

• Find out if your homeowners association has any restrictions regarding short-term rentals or renting your home on a short-term basis.

Whether it's a single room with a shared bathroom, a private wing with its own entrance, or an entire home while you're away for the weekend, you'll probably want to invest something in your space both before creating your Airbnb listing and in its ongoing maintenance. need to do it. Some costs to consider include:

• Installation of keyless locks to facilitate check-in.

• Buy things like a refrigerator, microwave, and coffee maker to make the space more comfortable for long-term residents.

• To close off a room by building a wall.

• Create a separate furnished TV area.

• Provide clean sheets, towels, and toilet paper in your space. (You'll need to go beyond these basics to get the best ratings.)

• Paying high utility bills.

• We provide cleaning services between reservations.

• Co-sponsor compensation (see below).

• Covers taxes and Airbnb host fees.

• Most hosts' Airbnb commission is 3% of the booking subtotal. Some hosts, such as those offering vacation rentals in Italy, may have higher rates. The posted price that guests see is higher than the price you earn.

• Airbnb's metrics show how your nightly rate compares to other Airbnb accommodation listings in the area, and when to lower (or increase) your rates on certain days of the week or when demand spikes. ). You can set a minimum number of nights that people can stay at your location. This helps offset the cost of handing over the space (cleaning and maintenance). You can also consider charging for additional guests and additional services such as cleaning, equipment rental, pet friendly, and tours.

• Airbnb charges the fee before the guest's arrival and transfers the money according to the method of your choice (such as PayPal or direct deposit) 24 hours after the guest checks in. Airbnb cannot accept cash payments. We accept Visa, Mastercard, American Express, Discover, debit cards, Apple Pay, Google Pay, and PayPal.

• Other factors can affect the amount you earn, such as weekly or monthly discounts, weekend or seasonal rates, and payments to co-hosts you work with. Value added tax (VAT) In certain locations outside the United States.

Create an honest Airbnb listing. Don't exaggerate things or withhold information about problem areas.

• Highlight what makes your space special so it stands out from other Airbnb listings.

• Look out for accessibility features that make it easy for guests to move around the space.

• Be sure to include great photos so your guests can understand the size and features of your space.

Operating a vacation rental may take longer than expected. She would do well to have at least one other person help her with the following:

• Email and communication.

• On-site repairs and requests.

• Neighborhood-specific tips for guests.

Add co-hosts to your listing (you can add up to 10) and make sure they understand Airbnb's co-host terms. You and your co-host decide how much you pay per reservation. If you can't find a reliable co-host, a third-party property management company can help with things like responding to host inquiries and cleaning the space.

If you can't set up a short-term rental, you can host an Airbnb Experience instead.

• Airbnb Experiences is the platform's tour guide service that connects guests with knowledgeable hosts for unique, hyperlocal activities. Think yoga classes under the Eiffel Tower, surfing lessons on Venice Beach, Harry Potter walking tours in London, and pasta-making classes in Rome. However, Airbnb Experiences are not available in all cities.

• Choose your schedule, how often you can host, the size of the group you can supervise, and the price.

• You will need to submit an application to Airbnb, where they will scrutinize you and your experience. Airbnb typically responds within a week, but check to see if they're accepting new applications before spending too much time on the experience. Depending on local laws and whether your gig fits your jurisdiction's definition of business activity, you may need to register as a business or obtain a business license. Please be aware of legal provisions if your planned experience includes alcohol, food, or transportation.

How much money can you make by owning an Airbnb?

According to Airbnb, the average annual income for hosts in the U.S. is more than $13,800, but the numbers vary. Some hosts buy or lease a number of apartments or houses and rent them out full-time.

Earning potential depends on:

• How much do you charge for your space?

• How often can I rent it?

Both will depend on how much time and money you want to spend equipping and maintaining your Airbnb property.

Airbnb claims it is active in more than 100,000 cities around the world and serves more than 7 million people.

list. For the majority of people, being a host is a side hustle, not a full-time job with the potential to make full-time money.

• Be conservative with your profit expectations, especially if you don't want or can't spend a lot of time and energy on your hosting business.

• The more effort you put into making your space as beautiful, functional and comfortable as possible, and the more time you spend addressing your guests' concerns, the better your reviews and ratings will be. It is important to respond quickly to inquiries.

• They will be rated on overall experience, accuracy, cleanliness, communication, check-in, location, value, and amenities. Good reviews can help improve your search rankings on Airbnb. Being high in search rankings means you'll show up more often in users' search results, which could result in more bookings.

How much is Airbnb tax?

Depending on your city, you may be required to collect sales or gross receipts tax from your guests, and you must let your guests know the exact amount before they book. We may collect that tax when a guest makes a reservation.

If you run an Airbnb, you may be considered a small business owner in the eyes of the IRS, so your income and expenses at Airbnb, whether or not you have enough income to receive a tax return from your company. must be reported on your federal tax return.

If you earn more than $20,000 on Airbnb in 2023, the company (and the IRS and state) could send you money Form 1099-K. This amount was reduced to $5,000 in 2024. A 1099-K helps you calculate and report the business income you receive.

You may be able to deduct certain expenses related to your Airbnb business on your tax return. These costs may include:

• Mortgage or rent on an Airbnb property.

• Utility expenses consumed during your stay.