How Much Money Can I Make Airbnb Hosting?
I won’t sugarcoat this: Airbnb is a great way to make a side income. But, don't quit your day job yet.
Why do I say SIDE income?
Why not quit your job?
Why am I not telling you that you can make millions?
Because: COVID, city regulations, unforeseen home repairs, and more. Once you’re Airbnb hosting, there will be reasons that you cannot predict that may shut down your Airbnb temporarily. There were months in 2020 when we couldn’t host because of COVID, and there are some cities that have decided to heavily regulate or even shut down Airbnb permanently.
credit @schoolhouseelectric
So, I don’t recommend it as your sole income.
If you’re planning to host as your primary income, just be prepared, think about those scenarios, and have a backup plan.
But, you might be thinking, ‘wait, Diana, I’ve heard of so many Airbnb coaches who are all about quitting your job to invest in real estate and build an Airbnb empire.’
Yes, that’s true, there are people out there building Airbnb empires, and I have a problem with that.
I call it property hoarding. Here are two reasons why I don’t like it: first, it’s impacting communities and creating long-term rental housing shortages. When a significant amount of the housing stock becomes Airbnbs and short-term-rentals, those units are then unavailable as long-term rentals, driving up rents.
Housing shortages in cities all over the U.S. (and the world) are a contributing factor to homelessness. Let’s not be part of the problem. The second reason I don’t think you should build an Airbnb empire is that it’s financially risky.
Financial risk factors include:
City regulations (which I support! I think cities should have the ability to regulate short-term rentals and make decisions that are GOOD for protecting their housing stock).
Global pandemics, I know, they’re rare, but, it turns out that they happen!
Disasters: fires, floods, earthquakes. Yes, you have insurance, but these kinds of rare emergencies can impact your ability to host on Airbnb should your home be impacted.
Home mishaps: house fires, nearby construction, plumbing incidents, break-ins. There may be reasons why you need to cancel reservations and pause your Airbnb income temporarily. We replaced the foundation and siding on our main house two years ago, and the whole project was such a physical mess that we had to pause Airbnb hosting in our nearby backyard casita for two months. Even though the casita wasn’t impacted, the construction noise was unacceptable for hosting. So, what if your neighbors decide to replace their roof and have a week of hammering? Will you need to cancel your reservations because of construction noise? Probably.
Wow, I was a Debbie Downer there for a minute. But, I’m painting a realistic picture of financial risk before you dive in. I can’t wholeheartedly recommend that you plan to rely on Airbnb income without thinking through the risks.
Ok, now the GOOD news?!
Airbnb income can be a solid side income - and here are some ways to figure out how much you can make on Airbnb.
Look at comparable spaces in your neighborhood. Pretend you’re a guest and notice the prices of other similar-sized spaces. Consider the location, the quality of your space and theirs, the size, and the reviews. All of these factors contribute to what you can charge as a nightly rate.
Consider how often you want to host. How many nights per week, month, and year?
Know the costs. You’ll have ongoing costs including insurance, cleaning supplies, extra bedding and towels, coffee, paying a house cleaner if you plan to, and maintenance.
My personal experience has been super positive.
We’ve been able to make an Airbnb income that covers the mortgage of our house and the cost of building our guest house.
I’m launching a course where I’ll go deeper into pricing strategies. We’ll look at dynamic pricing, discounts, and I’ll provide an Airbnb pricing calculator and expense tracking system.