Airbnb startup cost today:
Average: $6,000 Minimum: $3,000 Maximum: $10,000
Being an Airbnb host is an excellent option for entrepreneurs who want to enter the real estate industry. This is recommended both for property owners and even for non-property owners who use the rental arbitrage business model.
A common challenge among new Airbnb hosts is that it’s not easy to attract customers, especially when they don’t have positive reviews yet. Competition can be difficult, unlike with lead generation where it’s low risk and less expensive. You won’t have to spend huge amounts of money furnishing a property and marketing your listing. Instead, your focus is to boost the search engine rankings of business websites. This can be a good source for passive income, especially if you’re offering your services to several businesses.
How much money do you need to start an Airbnb?
You will need at least $6,000 to start an Airbnb business. According to online data, this is usually the average amount for new Airbnb hosts. In general, the minimum and maximum amount for starting an Airbnb business ranges from $3,000 to $10,000. The money is typically used for:
Other factors that dictate the needed initial amount for starting an Airbnb include:
Ideally, first-time entrepreneurs start with a single Airbnb property, whether it is owned or rented. This will allow them to serve their customers and maintain the property while learning the business model at the same time.
As you learn the business, you can then start scaling by adding more properties on your portfolio. Some successful Airbnb hosts eventually offer 3 to 10 rentals to multiply their Airbnb income potential.
Starting an Airbnb business with $6,000 (average startup amount)
Here’s a sample breakdown for the average Airbnb startup cost of $6,000:
Appliances (smart TV, stove top, oven, etc.) $2,000 Decorations (plants, plant holders, framed artwork, etc.): $300 Kitchen utensils (plates, silverware, cups, mugs, knives, etc.): $300 Room amenities (bed frame, lamp, sofa set, table, etc.): $1,000 Utilities and subscriptions (electricity, heating, internet, water, etc.): $500
Miscellaneous supplies (detergent, iron, ironing board, paper towels, toilet paper, shower curtains, etc.): $400
Monthly rent: $1,500
Of course, it should be noted that the Airbnb cost computation above includes a monthly rent. This only applies for non-property owners who are offering rented spaces through Airbnb arbitrage. For those who already have their own property to offer on Airbnb, the total amount can be adjusted and reduced as needed.
Starting an Airbnb business with $3,000 (minimum startup amount)
For property owners with extra room or house to offer, at least $3,000 should be enough to start an Airbnb. Here’s a sample breakdown:
Basic appliances: $1,000 Decorations: $100 Kitchen utensils: $200 Room amenities: $900 Utilities and subscriptions: $500
Miscellaneous supplies: $300
Non-property owners can spend $1,500 on monthly rent and decrease expenses on other areas by utilizing their own resources. For example, they can use their own appliances and furniture to furnish and prepare their rental space for Airbnb listing.
Starting an Airbnb business with $10,000 (maximum startup amount)
With $10,000 you can rent a bigger place, spend more on other essentials for your first Airbnb unit. This will allow you to accommodate more guests and earn higher. You can even hire experts to help you in promoting your listing and streamlining your operations. Here’s a sample breakdown:
Appliances: $2,000 Decorations: $500 Kitchen utensils: $200 Room amenities: $1,300 Utilities and subscriptions: $500
Miscellaneous supplies: $500
Monthly rent: $2,500
Professional services (cleaning, contractors, photography, etc.): $2,500
In a TikTok video, Preston SEO of The Legacy Investing Show shares that $10,000 is “enough money” to transform a single property into an Airbnb that brings a monthly profit of $2,500. According to him, renting a property and then listing it on Airbnb with the landlord’s permission will do the trick.
“You're gonna use that ($10,000) for the first month's rent, furniture, amenities, etc,” Preston explained. “The best part is that you don't have to do any of the work yourself. You can hire remote contractors to help you set up the property. I did the same thing with $26,000 and made $9,000 in profit within 30 days of launching.”
In a recent Instagram post, Preston shares he's now “on track” to earn $325,000 from his 6 Airbnb listings.
How much will it cost to list your property on Airbnb?
It’s completely free to list your property on Airbnb. As a host, you won’t have to pay any fees for joining and using the platform. However, expect to pay Airbnb 3% of the booking subtotal as a flat service fee.
How much will it cost to make your rental space attractive?
On average, it will cost you $1,000 to $2,000 to make your rental space attractive. In addition to the basic furnishings and supplies mentioned above, it’s also important to improve the overall look and vibe of your Airbnb.
As always, the amount you’ll need will depend on your target market, the size and type of your property, plus the ambience and theme you’re going for. You’re going to spend differently on a small minimalistic apartment compared with a spacious luxury house. Also, you’ll need specific furniture if you’re targeting families or remote workers.
In any case, the goal is to provide your guests with a comfortable atmosphere and positive experience. Doing this can help you market your listing easier, especially as you share photos and info on Airbnb. This can eventually bring good reviews and attract more customers in the future.
How can I save on Airbnb startup costs?
You can save on Airbnb startup costs by:
Buying furnishings and home decors from cheaper sellers
Instead of buying everything from a department store, you can also consider shopping from cheaper sources. For example, you can check out Facebook Marketplace and Craigslist or your local thrift shops and antique stores. These places can help you find great deals on secondhand items and more. Alternatively, you can also buy from Amazon, Target, and Walmart. These stores have wide selections that can help you shop on a budget for your Airbnb unit.
Handling basic Airbnb tasks yourself
Handling basic tasks can help you save on overhead expenses. For example, you can deal with customer inquiries yourself instead of hiring a virtual assistant. Another idea would be to do property cleaning between guest check-ins and check-outs. Need good photos of your place? Use your own camera instead of spending on photography services. These simple things can be effective money-savers, especially if you’re just starting out and don’t have much budget for additional expenses yet.
How much can you charge per night on Airbnb?
You can charge anywhere from $137 to $316 per night on Airbnb. According to online data, the global average Airbnb price is at $137 per night. Meanwhile, the latest Statista report says that San Diego is the city with the highest Airbnb pricing in the United States, averaging at $316 per night. San Francisco and Austin come close at $303 and $294 per night. Seattle caps off the top 10 selected US cities list with $196 per night.
4 things to consider when pricing your Airbnb listing
Your pricing strategy can make or break your short term rental business as an Airbnb host. So it’s important to get it right. Here are some tips to keep in mind as you decide how much to charge potential clients:
1. Research what nearby Airbnb Hosts are charging per night
Before pricing your Airbnb listing, you will need to do some local research. Look up similar listings in your city to see how much they’re charging their guests. Consider the property type, the property size, and the amenities. By checking out other Hosts’ pricing strategies, you get an idea of how much you can also price your offerings.
2. Increase pricing as needed
Airbnb Hosts usually change their rates depending on the calendar. For example, you can charge higher during weekends or during special events and holidays. These days allow you the opportunity to earn more. Again, it’s a good idea to compare local pricing to use as your guide.
3. Offer discounts
One way to boost guest interest for your Airbnb rental is by offering discounts. So instead of your regular rates, offer lower prices during the slow season or when guests book your place for an entire week.
4. Try using the Airbnb Smart Pricing tool
According to the Airbnb website, the Smart Pricing tool can be helpful for hosts who “want to optimize pricing without constantly monitoring it.” While it automatically adjusts your rates based on local demand, you also remain in control because you can set minimum and maximum limits.
How much do Airbnb owners make?
Airbnb owners make an average of $131,526 annually in the United States. According to the latest data from ZipRecruiter, some Airbnb owners earn as low as $14,000 while high earners can make as much as $399,000 per year.
Earning from Airbnb as a homeowner
Responding to a Reddit thread, user International_Ad2712 shared how they made almost $10,000 in a month after purchasing two properties. Their Airbnb listings are located near South California tourist attractions and they continue to attract bookings from potential guests.
Earning from Airbnb through rental arbitrage
20-year-old Inayah McMillan of the Airbnb Breakdown Academy has made headlines for achieving success as an Airbnb host despite her young age. In a Business Insider feature, we read that McMillan earned $375,000 in 2022 without being a property owner. In May 2021, she and her partner started doing Airbnb using the rental arbitrage business model. Today, they have 11 listings in St. Louis, Missouri.
According to McMillan, their cheapest Airbnb unit is a 1-bed and 1-bath property that costs them $1,500 a month. It earns them $2,500 to $3,000 monthly. Meanwhile, their largest property is a 4-bed, 2-bath property that costs them around $3,500 monthly and earns them $7,500 to $10,000 per month.
Is investing in Airbnb automation worth it?
Investing in Airbnb automation is worth it because the technology can help you boost efficiency, decrease expenses, save time, increase occupancy rates, and achieve greater work-life balance. Airbnb entrepreneurs use automation tools to respond to Airbnb guest inquiries, update booking calendars, adjust pricing, and other repetitive tasks.
Million Dollar Renter founder Sean Rakidzich has often shared about how complete automation has helped him scale his business while taking a year off at the same time. Today, he’s managing 155 properties across 8 cities, earning over $200,000 per month. He has also generated a revenue of over $10 million without owning a single property.
To find the right Airbnb automation software for your small business, compare the different options available in the market. Check out their features and prices then decide which matches your requirements and budget. Also, take time to read reviews to know what other users have to say about the software and its customer support system.
What are other important expenses for Airbnb hosting?
Other important expenses for Airbnb hosting include business license, website, and insurance. In most areas, Airbnb hosts need to have licenses and permits to operate legally. So make sure to check out local government requirements. Some hosts also create their own websites to build their reputation and showcase their listings. Moreover, building insurance is also a must although Airbnb has the AirCover for Hosts, a free policy that provides $1 million Host liability insurance and $3 million Host damage protection.
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Conclusion
Airbnb can be a profitable business but as you can see, it takes a significant amount of money to get started. On the other hand, running a local lead generation requires a smaller startup cost yet also has great potential for cash flow improvement. Competition is also not as difficult as Airbnb hosting since your only goal is to rank a business website on search engines using specific keywords and location. You can even increase your earnings by accommodating more local businesses. Personally, I make $52,000 a month using this business model.
