The short-term and vacation rental industry is back with a vengeance. Airbnb not only recovered from losses caused by the coronavirus; it saw a 289.2% increase in net income in 2021. But with a looming recession and volatile housing market, are short-term rentals still worth it? And can you make money with Airbnb without owning property?
In this article, we showcase six ways to make money with Airbnb that don't require you to own property. We'll break down the pros and cons of each. How much money you can make. Plus, how to go from profits to a passive income. We'll also show you why local lead generation is a better option. And why the business model is our first choice if you want to make a passive income in 2023.
How Can You Make Money With Airbnb?
Airbnb is an online marketplace. It connects people who want to rent their homes to people looking for accommodations in a specific location. Airbnb has a valuation of over $70 billion as of August 2022.
So this community-based platform can get you into real estate without a ton of capital or even the need to own property. Then you can capitalize on the sharing economy and generate a steady cash flow. But there are a few options, so you need to determine what best suits your skill set. Consider things like:
Decide On Your Business Model
You also need to do market research and pick the right location. But once you know what business model is best for you. And how you want to leverage Airbnb, then you can scale. And this is how you'll make money with the Airbnb business model. (The average host earned $13,800 in 2021).
Utilize social media on platforms with things like:
- A catchy name for your place
- Partnerships with local personalities or affluent business owners
- Authentic posts that share stories about yourself and your space
6 Ways To Make Money With Airbnb Without Owning Property
It's possible to make money with Airbnb without owning property. Plus, Airbnb offers a chance to enter the real estate industry without a ton of startup capital. Listed below are six ways to monetize the business model. As a result, you can secure steady profits and even a passive income in 2023. So let's check it out:
1. Rental Arbitrage (Subleasing)
Rental arbitrage (or subleasing) refers to an investor who rents a property from a landlord and then lists it on Airbnb for a higher price than the original monthly rental fee. Then you profit from the difference. (You can earn $1000-$2000+/net per property).
You don't need to own a home or invest capital because you're using other people's property. But if you plan on renting more than three, set up an LLC. (Then you're entitled to tax breaks and look more professional). In fact, Airbnb rental arbitrage is similar to the lead gen model.
But with lead gen, you own the digital asset. So not only are you building equity. You're securing prime real estate—digital assets on Google that have value. The premise is simple. Build and rank generic websites that get to the top of the SERPs.
Once your sites start bringing in leads, you sell them to small business owners for profit. So you control every aspect of your business. Plus, because lead gen is virtual real estate, it costs significantly less than a traditional rental property. (Even an Airbnb you don't own).
And it only takes 6 weeks to 6 months to hit the top of the SERPs. Plus, you can build multiple websites sites at once. So it's faster to scale and create a passive income. So is rental arbitrage legal? It is indeed legal. But you need to tell the landlord about your Airbnb arbitrage intentions. The key is to be transparent before you sign a contract. The AirBnB Course discusses this topic further.
Then if the landlord isn't interested, you can move on without wasting a ton of time. But on the other hand, landlords may have objections like the risks of people trashing their property. So you need to highlight the benefits of having a long-term business tenant. Or stress the financial incentive to keep the property in perfect rental condition and top-selling condition.
You can also sweeten the deal with profit sharing or offer to rent more than one of their properties at once. But you can also take courses like Brian Page’s BNB Formula or Humza Zafar's Airbnb Accelerator that teach how to start, scale, and secure a steady cash flow with the business model. And take advantage of third-party tools like AirDNA to find the winning property. But once you've found your landlord and ideal location, hone in on your perfect target audience and research things like:
Airbnb Research Topics
You need to optimize your listing on the Airbnb platform. So model the top-ranked properties and include things like:
- Set schedule & Guest requirements
- Rates & Scroll stopping pictures
- Reviews & Testimonials
Check all the boxes, and you'll scale your business and create a passive income.
You need to invest the time to optimize your listing. Every profile has an internal rank determined by Airbnb algorithms. And the goal is to get to the top of the page and get more eyes on your property.
Rental Arbitrage Pros
It's hard work at the front end, but it’s a low-cost way into the Airbnb game.
Build a cash flow. Rental arbitrage is a very cashflow-heavy model. (But the cash flow can be inconsistent).
You can scale fast. You just need to find a landlord who agrees to your terms. Then you can get cash flowing. (Sometimes within a week. Unlike traditional real estate investing, which can take 60-90 days).
Rental Arbitrage Cons
You're not building equity with your portfolio because you own nothing. (No depreciation, appreciation, or tax benefits like when you own rental property).
Travel trends and seasonal peaks and valleys may affect your cash flow. Or the landlord might not want to renew, or they may decide to sell the property. (This is why it's a good idea to sign a long-term lease).
Airbnb regulations could push you out, so it's not a guaranteed business model.
You can make up to $100K/month if you scale. Plus, it's possible to get from 1-5 quickly. Then you can save and reinvest your money and roll it into more rentals or buy property. But you can make six figures in 12 months or less if you pick the right location and get your systems dialed in with software like Zillow.
Tips For Making More Money:
Consider subletting corporate housing on Airbnb to secure long-term rentals, as Dr. Chau Ong teaches in his Beyond BnB Secrets course. In fact, corporate revenue for the second quarter of 2022 totaled $2.104 billion. But the goal is to build a portfolio of rental properties. So you need to establish systems like:
- A cohost: the face of your property and handling guests
- A property management team
- Automation and systems for your check-in process
But if you have a team, you're not investing your time. Then you can leverage other people's property with an Airbnb rental and make an almost passive income.
2. Join A Vacation Rental Franchise
The short-term rental property management franchise industry is worth $30 billion. Plus, it's used by over 450 million people worldwide. By joining a vacation rental property franchise, you bypass a lot of the heavy lifting at the front end.
For example, you can use a branded company's trademarks, proprietary knowledge, technology, and processes. So you'll find clients faster. And can start making money more quickly. Even better is that you can begin without owning property.
Instead, you're the franchisee, and your job is to manage short-term rental properties. But you do it on your terms. And reap the benefits of operating under a well-established brand.
Vacation Franchise Pros
You can run daily operations the way you want and have access to a pre-existing customer base.
You can leverage brand loyalty and have access to resources and software with a proven concept.
Scalable with the potential for a higher gross Airbnb income. (Especially if you do your market research and choose a profitable location).
Vacation Franchise Cons
Becoming a franchisee requires a financial investment (between $15,000-$100,000+ depending on the franchise).
There are additional fees (annual fees are typically 5% of your revenue). Plus, you can get locked into contracts.
It's not 100% consistent like a long-term tenant, and you could lose revenue if there is bad weather or seasonal peaks and valleys.
A vacation rental franchisee can make up to $100K/month if you’re willing to scale, have a good location, a real estate strategy, and a generous contract.
Tips For Making More Money:
You need to separate yourself from the competition to get the best bang for your buck. So add sizzle features to your listing to get more Airbnb bookings with things like:
- Stunning images and videos
- Offer specific amenities included with the rental, like bicycles, paddleboards, surfboards, etc.
- Bring local experiences to your Airbnb guests
You can also use incentives like gift cards to get people to leave reviews. And by offering extras, you prove that you're taking care of your guests and giving them the best experience.
The more you can personalize your Airbnb. Or provide special touches like nice linens or a book showcasing local points of interest. (Even connecting with business owners willing to offer discounts for your guests). The more positive reviews you can get. Then, the higher your listing will rank in the Airbnb algorithms.
3. Property Management
As a property manager, you ensure the short term rental property runs according to the owner's instructions. You're responsible for things like:
Airbnb Property Manager Responsibility Checklist
You can start an Airbnb property management company without investing any money. You just need to find someone who has an Airbnb but doesn't want to deal with the day-to-day tasks. But you don't pay for expenses like mortgage, taxes, or rent payments.
Plus, anyone can get started, even if you don't have any experience. Of course, you'll pay with your time until you scale enough to outsource. But if you can connect with an Airbnb owner with multiple listings, you'll scale faster and generate a steady cash flow pretty quickly.
Property Management Pros
The role is flexible.
You don't need to invest any capital.
A chance to meet people from all over the world.
Property Management Cons
You might have to work weekends and holidays.
Finding Airbnb hosts who want your service can be challenging.
It can take time to scale your business.
Property managers make approximately 10-20% of the property's nightly rate. And can make $1000-$5000/month with this Airbnb investing option.
Tips For Making More Money:
You need to access property management software like Buildium or SimplifyEm to automate processes like rent collection vacancy management, maintenance cycles, and accounting. Then you can scale your short-term rental business faster. But you also need to learn the business model. And you need to understand how short-term rentals work. (So you can present as an expert).
In 2022 over 4 million hosts have 6 million listings on Airbnb. And the average host earned $13,800 in 2021. But not all hosts have time for the day-to-day tasks of keeping their listing on point. So they hire a cohost. A person who takes care of things like:
- Managing Reservations
- Restocking Items
- Greeting Guests
- Providing Property Tours
A cohost is like the oil that keeps the listing running smoothly. So it's your job to make sure your guests have everything they need. (From messaging guests to confirming arrival times and coordinating checkout). And as a cohost, you answer any last-minute questions to create the best experience possible.
You don't need any capital or a license.
The hours are flexible.
You can manage multiple properties at once.
Your income will fluctuate.
Earnings aren't high, and you won't make as much as you would as an Airbnb host.
It can be challenging to find listings that are looking for a cohost.
Airbnb cohosts can earn 10-30% of the listing price per night. (And in some locations, up to 40%).
Tips For Making More Money:
Consider creating a website with a direct booking option to avoid Airbnb and other OTA fees and get more brand exposure. And automate your systems with third-party tools like Wheelhouse or Hospitable (formerly known as Smartbnb).
Consider investing in a course like the one by Jorge Contreras. (Jorge teaches students how to earn a 6-figure income with Airbnb without spending a dime). Students can also access an online community Facebook group to ask questions and get ongoing coaching and support.
5. Host An Experience
Airbnb Experiences are more than your average tour or class. They're unique ventures that showcase your expertise and knowledge about where you live. But the key is to find something not being offered. Or creating a better version of an existing activity. So you need to do some research and consider things like:
Your Airbnb experience can be physical, like trail running and yoga in the park, to something as exclusive as a wine and cheese pairing or coffee crawl.
Host Experience Pros
You make money doing something you enjoy on your schedule.
You get to meet new people.
Airbnb promotes your business to its users.
Host Experience Cons
You rely on Airbnb to promote your experience (plus they take a 20% cut).
If you want to get more views, you need to get 5-star reviews.
It takes a lot of work to generate a passive income. So you need to be ready to invest the time and energy to build a brand before you can outsource.
You can charge per person or a flat rate. And your earnings are contingent on the number of experiences you run. But keep in mind that Airbnb takes 20% of the total price. So use a profit margin calculator tool to subtract your expenses and ensure you're making a profit.
Tips For Making More Money:
The goal is to build an empire so you can make lots of money. But you need to create a 5-star experience and get reviews. Become an authority in your niche and establish your brand.
But once you're successful with one experience, you can start hosting multiple occasions. Then outsource your idea by hiring cohosts and assistants. (They get a cut of your profits, but it allows you to run affairs all day).
The key is to go beyond the app. So consider your marketing strategy and take advantage of things like:
- Join Instagram & Trip Advisor
- Offer private tours, hybrid events, or customized tours (similar to the Live the Off Grid Dream Course).
- Reach out to local dating apps or community partners
- Make deals with local businesses (get a commission for guests that use their service)
Then you can charge more, make more money, and generate a passive income.
6. Airbnb Cleaning Service
The Airbnb cleaning space is fast-paced and in demand. You need turnover after every guest. So not only is this a viable business in 2023. It also has a ton of potential to make a steady cash flow. As a cleaner, you're responsible for things like:
Airbnb Cleaning Service Responsibilities
But to make money, you need clients. Plus, you need to build trusting relationships with Airbnb owners. But to find potential jobs, you need to go where Airbnb hosts go. So consider things like:
Where To Find Airbnb Cleaning Jobs:
Create a website and start a blog where you share resources or helpful tips for Airbnb hosts. Then you become an authority in your niche and will have a better chance of securing paying clients.
Cleaning Service Pros
High customer retention, and you can choose your clientele.
In-demand and a recession-proof business model.
Uncapped income potential.
Cleaning Service Cons
The work can be inconsistent, with little to no notice for scheduling.
Building a team of cleaners who meet your standards can be challenging.
It's a labor-intensive position that can be very physically demanding.
You can make up to $100,000/month with short-term rentals. Consider that Airbnb cleaning is in constant demand, so if you can establish your business as the go-to cleaner. Or you can connect with a property owner with multiple listings to secure a steady cash flow.
Tips For Making More Money:
Take advantage of automation software like HostTools for messaging and scheduling your cleaning crew. And get reviews. (You can use ones on listings you clean on the Airbnb platform). You can also join TurnoverBnB. (A free marketplace offered by Airbnb that allows cleaning companies to list their services for potential hosts).
You should also leverage marketing tools like social media and a business website. Or you could even use paid ads to promote your services. Get a steady pipeline of clients, and you can build a crew to take care of the cleaning jobs for a cut of the profits. But never offer discounts and include a flair or something extra to stand out from the competition.
How Airbnb Can Generate A Passive Income
Real estate investing is one of the best ways to diversify your income and create a steady cash flow. But if you want to go from making a profit to generating a passive income, you need to scale. Then you can outsource and automate your processes with software like Hostaway to handle things like:
But building an empire takes time. Plus, you need to establish your brand. And decide what business model best suits your skills and long-term goals. For example, do you want to be a short term rental manager? Or would you prefer to start a cleaning service?
But taking one of the top Airbnb courses can help you scale faster. Learn industry tricks to make money with Airbnb and connect with hosts to sell your services. But if you can get a steady stream of vacant property or several hosts. Then you can grow your empire and turn your profits into a passive income.
Why Local Lead Generation Is A Better Way To Make Money In 2023
Earning money with Airbnb without owning property is exciting and lucrative. But it takes time to go from profits to passive income. That's why I prefer the lead generation business model. It's still real estate investing but on the internet. You build and rank generic websites that reach the top of Google searches and own prime real estate.
Then you have a digital asset that you own. Plus, you create your websites for service-based industries, so there's always a demand for what you're selling. Once you're at the top of the SERPs, you get a ton of eyeballs on your listing. People who are ready to buy right now. Start generating leads that you then sell to small business owners for profit. And because your property is virtual, it takes less time to become passive.
Take this website above, for example. I built this site in about 10 hours and got it to the top of Google in around 3 months. Now that it's generating leads, it doesn't need a ton of maintenance. But it's been making me $2000/month since 2015. All passive income that I get every month on autopilot.
Plus, this site is only one of over 80 I own. So there's no ceiling on how many lead gen sites you can build. Or how much money you can make with the business model. And in my opinion, lead gen is the best way to generate a passive income in 2023.
Airbnb investing is a great way to get into real estate. Because you don't need to own property to make money, you don't need to worry about securing a ton of upfront capital or asking the bank for a loan. But you need to be ready to work hard and invest the time to build an empire.
Then you can scale, outsource and automate to create a passive income. Of course, the process takes much longer to become passive than starting a lead generation business. But if you're ready to hustle. Or if you have a unique angle or an idea that will set you apart from the competition. Then you can be successful with Airbnb without owning any property.