If you’re looking for a money making side hustle you can do from home, you may have already considered listing your home or room on Airbnb. It can be a lot of work, but the potential to make some real profit is there if you know what you’re doing. Why not make money with your home?
A side hustle is simply something you do on the side to make a little extra income. Of course if you don’t have a day job, then your side hustle could become your main hustle!
I’m assuming you’d like some extra money coming in each month?
As a stay at home mom, this is the kind of business you can do while the kids are at school. With key lock boxes, you don’t even have to check guests in unless you want to.
If you’re trying to help build some equity in your home with home improvements, use Airbnb to generate the fixer upper money you need.
Pay off student loans or credit card debt. Whatever your financial motivation, let’s find out how Airbnb as a side hustle works.
Make Extra Income on Airbnb
In my travels, I’ve stayed at many Airbnb’s and I bet you have too. The idea of staying in someone’s home instead of a hotel has revolutionised the way we travel.
If you’re like me you love to stay in “a home from home”. Make your own tea and breakfast in the morning. Have room to spread out instead of being confined to a hotel room. Using a washer/dryer to keep the suitcase stocked with clean clothes is pretty handy, right?
Apparently lots of other travelers agree!
On any given night over 2 million guests are staying in an Airbnb.
You put up your flat, home, room or casita for rent for a night for as many nights as you choose. 28 days at a time is usually the max allowed due to taxes and hotel laws.
Expect guests to come from all over the world. Airbnb offers unique places to stay in over 100,000 cities and 191 countries.
You decide how much to charge for your space. Although you can deny a booking, be aware of discrimination. Know the laws before you start.
Airbnb frowns on hosts turning down guests. After all that’s how they make their money!
Smart Pricing is an Airbnb feature that gives the option of turning their nightly rates to auto pilot. Basically Airbnb will calculate your best rate based on changes in local demand. I’ve heard the Smart Pricing feature doesn’t always work the way it should. Ultimately you have control over pricing your rental.
The upside is you can make some serious cash on the Airbnb hosting platform (and others like Homeaway or VRBO). The downside is you’ll have to start thinking like an innkeeper and a bookkeeper. Your home, flat or vacation rental will be shared with strangers. It does require a mindset shift.
If that’s not something you’d be comfortable with or if you don’t see yourself as a host, this side hustle might not be right for you.
Here’s What I’d Recommend to Earn Extra Income on Airbnb
- There are primarily two types of listings. Private Room and Entire Place. What would you be able to offer? A room with a shared bath. A room with a private bath. A room or annex with private entrance. Perhaps your entire home?
- Visit Airbnb.com, search for your town and see what listings are available. Check out private room or entire place listings. Look at the photos, amenities and descriptions.
- While you’re searching, take a close look at pricing. Focus on your town or local neighbourhood to get a feel for what other hosts are charging.
Calculate Pricing and Profit Potential
- Let’s say you have a room with private bathroom to offer. You’ve done the math and figured out a competitive rate in your neighbourhood would be $59. per night.
- As a host you can charge an extra fee for cleaning. Depending on whether or not you do the cleaning yourself or hire it out, that could be extra income.
- Both host and guest will pay a service charge to Airbnb. Deduct the Airbnb service charge to figure what you net per night. Minus expenses.
- Do the math. If your monthly occupancy rate of 25% that’s equal to 7 nights. 7 x 59. equals $413. extra income per month. If you have an entire place to rent out, you charge more. A nightly rate of $125. per night would create $875 per month income.
- Got a mortgage or loan on the property? Deduct the monthly costs of your loan, as well as any property taxes and home insurance to determine your profit after all expenses.
- Don’t forget to factor in the extra costs from renting out a room or your entire place. Figure out what additional utilities like electric/gas will cost you.
- Remember costs to provide good linens, bedding, towels etc. count too. If you have a kitchen you’ll have to stock it with essentials like dishwater, pots and pans and utensils.
Other Factors to Consider
- Unless you’re in a high desirable rural area, chances are you won’t be able to charge as much as a high demand city listing. You should have less competition though with a different type of traveler. Would you prefer a business person or a casual traveler who may be biking or hiking through the countryside?
- With a shared room situation, you could choose to provide breakfast although it’s not mandatory. If your rental is self-contained, guests can do their own food prep. You might provide the coffee, tea etc.
- Do some research in your local area for additional charges like taxes. In some larger cities legislation has been passed to collect sales or hotel taxes from Airbnb bookings. You may also be subject to withholding from your earnings if you live in the US.
- Keep in mind, you’re now running a business. Consult a tax specialist or accountant to find out what costs can be deducted from your new side hustle income. So keep track of the cost of toilet paper, towels and any other necessary expenses!
The Deets on Being a Successful Host on Airbnb
This side hustle may not be for you if you’re a very private person. Being comfortable with computers and technology is a must to run an online bed and breakfast. Hosts who respond quickly to texts and messages and are willing to communicate with guests get the best ratings.
Are you ready to get started? Cool. You’re going to love that extra income.
Calculate what a listing in your town or neighbourhood can earn.
Having an Airbnb or short term rental side hustle can be challenging and rewarding. My recommendation is to search and find a good Facebook group for support. You need a place where other hosts share tips and ask questions.
It’s an older blog post, but here’s a good reminder of how much you can make if you’re willing to take a little risk.
I talked to one Airbnb entrepreneur who was able to buy a second home with the profits she made from renting her first home!
If you’ve got the space and are willing to make the investment in getting your room or your home ready to rent, the additional income could be a game changer for your bottom line.