How To Start An Airbnb Business
The airbnb business model offers a unique solution to both the property owner and guest. The company was founded in 2007 and is present in almost every country today in 2021. There are plenty of reasons why starting an airbnb business might be on your radar…namely the money.
The website allows hosts and guests to meet in a way that’s mutually beneficial. The host can rent private rooms out, all the way to whole house! When you become an airbnb host, you open yourself up to an extra source of income and can start turning vacation home rentals into a full time business for yourself!
But if it’s one thing real estate investors like you need to know, it’s that 2020 crushed a lot of airbnb hosts due to “rent” moratoriums and so on. It left many hosts exposed and they lost millions.
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The Popularity of Airbnb
Why is airbnb so popular?
Airbnb has all sorts of rental space all over the country and it’s so much easier to use compared to other options like regular old vacation rentals. If you look at their website, you’ll find that they’re active in 100,000 different cities and in over 220 countries. Short term rentals and home sharing became the norm in 2020 as several people were forced to work from home while their work place was shut down.
Where airbnb really shines is with the guest experience. By staying as a guest in an airbnb you get to experience different places around the country/world as a local. It’s a type of customer experience that a hotel just can’t offer. On top of that, there can be much more privacy compared to that of a hotel room with thin walls. Even further, guests are often provided with fully stocked kitchens and pantries.
This business idea has really turned into a budget friendly travel option for regular people.
The Opportunity of Airbnb Hosting
If you look at the financial data from airbnb, starting an airbnb business can be extremely profitable. Hosts were documented to have earned over $110 Billion. The average earnings for a host with one rental property is in the ball park of $8,000 a year.
Just by using a few quick google searches, you’ll find that the average monthly income for and airbnb host is roughly $930, the median is $450. Some hosts were bringing in well over 10k a month while the occasional real estate investor made less than $200 per month.
Beyond just the financial incentive for the real estate investor, you’ll make all sorts of connections through your guests and be given the opportunity to buy even more rental properties!
Even though real estate investing like this to start an airbnb business can be extremely profitable, there is a lot of overhead and legal hurdles you will have to constantly jump through.
Plus, it’s not like everyone is the ideal tenant like you…
How Airbnb Hosting Works
So how does it all work?
The first thing you’ll need to do is create your listing on Airbnb. We’ll talk about the nitty gritty later, but in short, you’ll want to include all the basic information like room and bathroom number along with photos that really make your rental properties stand out!
Ultimately, you are the one that decides how much your property costs, but you’ll want to make sure you price competitively. Airbnb not only offers you tips on how to price your listings, but they offer a tool that automatically adjusts your rates depending on a number of factors like demand and seasonality.
How does airbnb make their money?
Airbnb charges a 3-5% fee. Honestly, that’s not that bad. It’s profitable for everyone involved in our opinion.
Worried about potential damages? Airbnb has you covered, well for the most part…
Airbnb offers what they call a host guarantee in which they provide $1,000,000 in property damage protection. They also have a liability program as well that totals to $1,000,000. However, some countries are exempt. For peace of mind we recommend getting some extra insurance yourselves.
When you start an airbnb business, insurance is just as important as any other real estate investing property. Before hosting your rental space, be sure to go over everything in depth with you insurance company.
Do all those big numbers make your gut wrench a little?
Gauge Your Commitment to an Airbnb Business
Before you start an airbnb business, make sure you are well aware of the challenges you might face while hosting. Not only is the time commitment to be considered, but also things like cleaning services between back to back guests, accommodations like fully stocked food, and other things for travelers.
Do You Have Time to Host?
Creating a successful Airbnb Hosting business isn’t the passive income stream you were probably hoping for. You can buy a house and list it, but it doesn’t just sell itself.
No, you’ll constantly need to make sure you have a high occupancy rate and full booking calendar. That’s full time job in and of itself because you’ll have to manage all the ads surrounding your listings.
On top of that, you’ll have to any other problem or matter that arises in a fast and professional manner.
While it is true that you can subcontract things out for a cleaning fee, just remember that you’ll not want to spend too much on outsourcing because that will cut into your profit margins!
Unlike an Airbnb business where you have to constantly keep with each property, thousands of people are entering this BRAND NEW real estate market where people can LITERALLY set them and forget them!
Be Sure You Can Rent Your Space
Before you start writing your own financial story with an airbnb business, make sure you are aware of all the rules in your city or country before running ads to your listings.
Have You Counted All the Costs?
As cool as owning an airbnb business that’s bringing you in over $10,000 a month would be…it’s extremely tough to do and it’s not for the faint of heart. You’ll need to adopt a business mindset and create an effective business plan. The more in depth you can make this, the better. We’re talking financial expectations that are realistic, the whole nine yards. You’ll also want to make sure to set up a business bank account as well.
Some other costs you might want to factor in are utilities, laundry, water bill, electricity, food, business licenses, insurance, etc. Also, be sure to keep track of all these expenses. You’ll be glad you did when tax time comes around, believe us.
Right now you’re probably thinking “Damn, I didn’t think of all this extra crap…I thought it was just a house…”. Well you’re certainly not the only one that feels that way…
But not all hope is lost!
What Is Our Top Recommendation For Making Money In 2021?
Where the other Airbnb model falls short is in scalability. Because in order to make a good amount of money you need like 10 or more properties
But what if you went smaller and more local?
With Local Lead Generation, you will be getting service requests from multiple sites at every minute of the day from people who are willing to pay a lot of money for what you can provide them.
I was watching a YouTube video once where the host made a comment that it isn’t about making a lot of money from one website… it’s about making a little bit of money from lots of different websites.
So, think of it this way….
What if you could have streams of investment income where you operated 10 rental units that you could charge anywhere from $750-1,000 per month?
That’s $7,500-10,000 per month in passive income!
What If You Invested Into 100 Rental Units?
But instead of spending $Millions to build houses or apartment complexes… you spend a couple hundred dollars to build websites.
You then get those websites ranked in the search engines for specific home-based services that customers are searching for.
Next, you offer your business opportunity to local business owners who are looking for customers and are willing to pay you for their information.
You’ve just created a Digital Real Estate Investment Empire that is potentially earning you 4-5 figures in PASSIVE INCOME on a monthly basis without spending a single dime on ads.
With conventional digital real estate, you have to compete with thousands, if not millions of others who are selling the SAME product to the SAME customers.
With Local Lead Generation, the competition is virtually nothing and your profit margins are 85-90%.
Now, I could go on and on, but I’m sure you have tons of questions about how to create Digital Real Estate assets and start building YOUR digital empire!