If you’re interested in starting a side hustle, you’ve probably been thinking about the types of work and can do. But doing isn’t the only option.
Another way to make some extra money is to take advantage of assets that you have. There are a number of different things that you can rent out to make money, including a room in your house, a car, a truck, a bike, a boat, tools, storage space, and more.
Today, we’re going to look at the side hustle of renting out space in your home. Websites like Airbnb, VRBO, and HomeAway have become extremely popular with travelers, and that opens up a great opportunity for side hustlers. Airbnb is the most popular, so it tends to get the most attention.
In this article/interview, we’ll take a look at how to make money as an Airbnb host. We’ll get insight from someone who is actually using this approach to make an extra $500 – $700 every month.
→ Related reading: Ways to Make Money: 150+ Side Hustle Ideas for Your Spare Time
Why Hosting Through Airbnb is a Great Side Hustle
Before we get into the details of how to make money on Airbnb, let’s first look at the reasons why you might want to consider this side hustle. Of course, no side hustle is perfect for everyone, so hopefully this section will help you to determine if it may be a good fit for you.
1. It Doesn’t Require a Lot of Time
In my opinion, one of the most attractive things about making money as an Airbnb host is the fact that it doesn’t require a huge amount of your time. If you need to make some extra money but your schedule is tight, this could be a good option.
You’ll need to clean the room/unit/home after each guest, or you could hire someone to clean it for you (which would cut into your profits).
Aside from that, you’ll need to put in a little bit of time answering questions about your listing and managing the business. Compared to many other side hustles, the time committment is pretty minor.
2. It Makes Use of Assets You Already Have
The main reason this side hustle doesn’t require a lot of your time is that instead of trading your time for money, you’re leveraging your existing assets (in this case, your home). It could be a room in your primary residence, a separate unit, or an apartment or house that you don’t live in. Regardless, the value of the asset makes it possible to rent out to others.
3. It Doesn’t Require Special Skills
You won’t need any specific type of experience, training, or skills in order to make money as an Airbnb host. You’ll need to do your best to give guests a positive experience so your listing has good reviews, but that’s one of the most important things. This is a realistic side hustle for just about anyone who has a room or property that people would want to rent.
4. Good Income Potential
Although it doesn’t require a huge amount of time, the income potential is still pretty good. Of course, how much you can make will depend on a lot of factors like the location and size of your rental.
If you have multiple rooms or units to rent, you can also make more money. But even with just a single room to rent out, you can still bring in enough money to make a difference with your budget.
A lot of people are looking for a side hustle that can bring in a few hundred dollars per month just to help out with monthly bills or to have more money to save. Renting out a room or unit on Airbnb can be a great solution if you have the space to rent.
5. You Can Offset the Cost of Your Mortgage
Another reason to consider renting out a room or part of your home is that it can help to offset the cost of your mortgage, and effectively reduce the amount of money you spend on housing.
House hacking is a really popular approach in the financial independence community because it can be so effective at lowering one of your biggest expenses each and every month.
6. Start Making Money Quickly
Some of my favorite side hustles involve creating a business (things like blogging and creating niche websites). Although I think these side hustles present awesome opportunities that can grow into a significant income, the truth is, you’re not likely to make money quickly. Most businesses, whether online or offline, will require a good bit of work before they start producing a significant amount of money.
As an Airbnb host, you can get your listing online and start making money pretty quickly. As soon as guests start renting out your room, you can be making real money. If you’re in a situation where you don’t want to spend 6-12 months building a business before you start to make money, this could be a good opportunity for you.
→ Related reading: How to Start a Side Hustle
How to Make Money as an Airbnb Host
Now that we’ve covered some of the reasons why this is a great opportunity, let’s look at a real-world example of a side hustler who is making money as an Airbnb host. Riley has a full-time job and also manages the blog Young and the Invested. He and his wife have been using an Airbnb side hustle since 2017, and he agreed to answer my questions related to this side hustle.
I think you’ll love the information Riley shares through this interview, and I hope you’re inspired by his story. The approach that he and his wife are taking is something that could definitely be duplicated by many other people who are looking for some extra income.
Here is the interview with Riley.
Can you tell us a little bit about yourself?
“Hello, all. I thank Marc for having me participate in this series and for giving me the chance to write to his audience.
“My name is Riley and I’m a 29-year-old senior financial analyst at a Fortune 500 company in New Orleans, Louisiana.
“I’m very interested in personal finance, investing, travel, ketogenic dieting, fitness, and finding ways to build my life together with my wonderful wife, Lily. The two of us recently made 1 year together as a married couple and we hope to purchase our first home together in the coming couple of years.”
What do you do full-time?
“Currently, I work as a senior financial analyst at a Fortune 500 company, as I mentioned above. I made 5 years with the company at the beginning of February. I have assumed roles in the company’s finance, product development, pricing, and regulatory departments.”
Can you tell us about the space that you rent out and when you started? Is it separate from your living space?
“My wife and I started our short-term rental at the beginning of 2017 during the first weekend (of two) of Mardi Gras. In New Orleans, that’s a prime time for visitors and we thought it would be the best opportunity to get our side hustle up and running.
“Because we had no reviews we knew we wouldn’t be able to charge very much but would still stand a good chance of getting booked. Our thinking was people would be desperate to find a reasonable place to stay.
“The house is a double shotgun layout, which appears to be a style unique to New Orleans. And because few reading this have likely heard the term, it’s best to break it up to understand the layout.
“First, a double means we have two units on the property, both atop the same raised foundation. The second part of the term, “shotgun,” implies a shotgun slug could travel from the front of the house, go through every room inside, and exit the back. It’s probably not the best term given my city’s infamous reputation for murders.
“Be that as it may, the layout is very popular in the city because lots tend to be very narrow but run deep from the street. On our side of the house, we have a lock-off unit with a separate side entrance.
“This layout makes it suitable as a rental because the guests don’t need to interact with us unless they choose to do so.”
What is your goal with this side hustle?
“On the other side of our double, we have long-term tenants who cover 80% of the mortgage and related housing expenses. When we renovated the other side of the double, we needed to replace the A/C and compressor outside.
“This didn’t come cheap, but fortunately the repair company offered 48 months no-interest financing through Wells Fargo. This added an additional $250/month to our expenses and remains our responsibility to pay.
“When you combine the mortgage and this expense, we need an average of $400/mo from the rental to cover everything. So, if we can manage that from our short-term rental as an average monthly profit, we’re satisfied.
“However, we also aim to cover the utilities on our side if we can. Our overall goal is to live in the house for free, so we can save for a down payment on our first house we buy together.
“And if we made extra money above our needs each month, we wouldn’t choose to pay off the mortgage faster, but would opt to use it to grow our down payment fund.”
Is Airbnb the only place you promote the rental?
“When we first started, we attempted to market it simultaneously on HomeAway but it became very cumbersome to manage the calendars on both platforms. We had to turn down a few bookings on HomeAway because we hadn’t managed to remove them from the available dates in time.
“If we kept canceling for long, the service likely wouldn’t have liked us. Not long after, we opted to stick just to Airbnb because both of us had traveled with the service multiple times prior. We felt the market of potential guests was larger.”
How frequently is it rented out?
“New Orleans gets hot and humid during the summer. It’s not the greatest time to visit my fair city. As a result, our bookings are seasonal.
“Typically, we’ll have our place booked on 50%-80% of the weekends from October – early May and maybe once or twice over the summer on 4th of July (during Essence Festival). As a result, we’ll earn a fair amount during our busy season and need to budget throughout the year to make sure we cover our monthly mortgage and housing expenses when no one stays.
“To demonstrate the seasonality, we had the following occupancy rates in 2018:”
Do you mind telling us how much money you make with this side hustle?
“We make around $500-700/month on average. This range covers our goal.
“We could lower the prices to very low levels during the summer months to snag some more guests, but the prices usually must fall to sub-$40/night to attract anyone to stay.
“For the amount of effort we put in, it doesn’t feel worth the money we’d receive. This is why we appreciate having significant cash flow during popular tourism months to offset the slim summer months.”
When you first got started, how long did it take to start making some money?
“We had only been in the house a couple months when we started our Airbnb but knew the importance of getting it up and running as soon as possible since revenue from it was part of our plan to pay for the mortgage and housing expenses.”
What are the keys to having a good listing on Airbnb?
“We found the most important part was the staging for photos. Luckily, Airbnb provided a professional photographer service to photograph the space for us. These professional pictures dramatically increased the desirability of the space to guests.
“We listed the space for a few weeks with amateur iPhone photos. While we got a few guests during that time, we noticed having the professional shots appealed more to our guests.
“Our listing came across more attractively and seemed like a trustworthy place to stay. Having positive reviews certainly helped as well.
“We have learned over the years keeping in contact with the guests is vital because it allows them the opportunity to tell you about any inconveniences they may have during their stay.
“Keeping in contact also provides the comfort of knowing the host wants to make your stay the best it can. Since we’ve made keeping in contact a priority, we’ve noticed our guest reviews turn more positive.
“Some early mistakes could have easily been remedied with this simple change.”
Is there anything you can do to increase the visibility of your listing?
“Airbnb offers hosts the chance to become a “Super Host” if they meet certain criteria. If you maintain an average rating of at least 4.8 stars, have a minimum number of bookings per quarter and overall, your listing will receive a “Super Host” designation and appear to more guests searching the platform.
“We maintained the “Super Host” status for multiple quarters but fell slightly below the 4.8-star threshold and have made great strides to improve the guest experience (see previous answer). We hope to be listed as “Super Hosts” again this coming quarter.”
What can hosts do to make their rentals more appealing and get more business?
“The two biggest levers you can control are how you price the per night stay and the ratings you receive. Luckily, if you don’t want to deal with the former, the service offers a smart-pricing feature.
“This allows you to set a price range you’re willing to accept from a guest. Airbnb then performs a lot of machine learning algorithms to determine the optimum price to charge guests based on supply and demand during the intended booking time.
“During high demand periods, you tend to have your price raise to account for the decreased supply. It’s similar to surge pricing on ride-sharing apps, except you typically don’t see more than 20-25% price fluctuations.
“Learning to manage prices are important and takes time to understand. The other element within your control is the ratings your listing has. By serving a quality hosting experience, you can receive positive feedback on your profile. This will lead to more bookings.”
How much time do you put into the side hustle?
“In the beginning, we weren’t sure what to expect. We spent an inordinate amount of time attempting to improve the listing on the platform in order to entice guests.
“We borrowed suitable language from the best-performing listings in our area and adapted it to our space. Guests appreciate having recommendations for things to do, places to see, and restaurants to visit directly on the listing.
“Because our housing layout allows for complete anonymity, we’ve found many of our guests prefer not to have contact with us unless they absolutely need something. When they book with us, they want privacy and for the space to be like a hotel room, but cheaper.
“After a couple years in the business, we’ve learned what to stress about and how much time to spend on managing the unit. We’ve also had enough experience cleaning the space between guests to perform all the cleaning efficiently.
“If you don’t include washing sheets and towels between stays, it takes us roughly 20 minutes to flip the space now. Because it’s only a bedroom and accompanying bathroom, my wife and I divide and conquer the cleaning responsibilities.”
Are you required to have any type of license? How about insurance?
“In New Orleans, short-term rentals have developed a contentious atmosphere, and understandably so. Many homeowners or investors have purchased homes and made them entirely dedicated to short-term rentals as opposed to housing long-term tenants.
“Doing so has reduced the available housing supply and pushed many tenants out of affordable housing situations. Because of this, the city has placed restrictions on which homes qualify for short-term rental licenses necessary for operating a rental in the city.
“Because our space is considered “an accessory” unit, we aren’t severely hampered by the regulations. My wife and I feel fine renting out the unit because we both know we wouldn’t have a long-term tenant in the room if we didn’t use Airbnb.
“Doing so would require walking through our bedroom to get to the kitchen and living room. At this point in our lives, we aren’t looking for such a living arrangement.
“As for insurance, we have an umbrella liability policy covering the entire house due to our long-term tenants and the short-term rental. This is something we looked into before proceeding because we wanted to make sure the insurance would cover anything that came up.
“Airbnb offers its own housing insurance for guests, but we didn’t want to trust that to come through if we needed coverage. Luckily, the umbrella policy is fairly cheap because it comes bundled with other insurance products my family has on their home and automobiles.”
Are you responsible for any taxes other than income tax, like hotel taxes?
“Airbnb automatically assesses hotel taxes required by the city. We don’t have any insight into how much is collected because we never see that on our end.
“Much as you would expect on any income source, we must pay applicable income tax on any money we generate from the Airbnb, however.”
Would you recommend this side hustle to others?
“Airbnb has been a wonderful tool for us to make additional money and offset our housing costs. We needed to supply the necessary furniture for the space and perform a few minor renovations to make the unit rentable.
“Because of the layout of our house, it made the arrangement very tenable. We would have left the space unused most likely had we not listed it on AirBnB. The amount of time required for maintaining the unit is very reasonable and works well for our schedules.
“If you find yourself in a similar situation (suitable housing layout with minimal investment and time commitment), it is a fantastic side hustle to pursue. You will run into the occasional guest who runs afoul of the house rules or leaves an inexplicably negative review.
“If you can learn to roll with it, you’ll find the investment to be a high return for low stress.”
What are some of your favorite and least favorite things about being an Airbnb host?
“Airbnb hosting can be a great use of your time and money if you can handle it well. We enjoy the flexibility of our side income and the ability for it to pay for our housing expenses.
“We decided to ask for a higher price to make a sufficient amount of money to cover our expenses and also allow us not to flip the space on a weekly basis. We understand people’s strategies will differ, but we find this to be the best balance for our schedules and commitments.
“Having a dependable stream of side income has become a great tool for us to meet our expenses. However, it isn’t without its hassles.
“We try to clean the space after the guest checks out, but when stays are adjacent, it makes for some tight timing to turn over the room. However, sometimes you will come home late from work and exhausted with a guest arriving the next morning for a stay.
“You need to suck it up and clean the space regardless of how tired you are. When factoring in the sheets and towels for washing and drying, the total time required to flip the space is around 3 and a half hours if everything is predictable.
“Sometimes, you’ll find some spills the last guest made, a broken curtain rod, a fallen towel bar, or takeout food which exploded in the microwave. All these events take time to clean and can be unpleasant to deal with if you’re tired.
“Overall, however, the side hustle is well worth our time and effort. Without it, we’d be shouldering housing costs we don’t want to pay.”
If you’re considering an Airbnb side hustle, this article on The Washington Post has a lot of helpful information that may answer some important questions.
Now, to summarize some specifics from the interview with Riley, here are a few of the key points:
1. Photos are Important
Having high-quality photos will help your listing stand out to potential renters, which will lead to more bookings and more income. Don’t rush the photos. Make an effort to get photos that will make your listing appeal to renters.
2. Using Multiple Rental Platforms Can Be a Challenge
Riley mentioned that they used Airbnb and HomeAway at the same time for a while. Each platform has its own calendar, and the two are not going to integrate automatically. For this reason, Riley and his wife have chosen to simply use one platform.
3. Most Rentals are Seasonal
In Riley’s chart, you can see that demand for the rental increases and decreases at different times throughout. This will be the case with most locations. It’s not really a problem, but you need to consider seasonality in your budgeting. If you’re using the side hustle to help with your mortgage costs or other expenses, make sure you account for seasonality in your projections. During the busy times, set some money aside for those times in the year when you may not get many renters.
4. Giving Guests a Great Experience is a Key to Success
Guest reviews and ratings are very important for having success with an Airbnb rental. Renters will likely consider reviews and ratings when they are decided which rental property/unit to book. Bad reviews can hurt your business, and good reviews can lead to many more guests. Since reviews are so important, it’s critical that you give your guests a great experience.
→ Related reading: 40 Exciting Hobbies That Make Money
Airbnb Host FAQ
Here are answers to a few common questions about renting a home or unit on Airbnb.
Fees: What Percentage Does Airbnb Take from Hosts?
Listing your home/unit/room on Airbnb is free. There is no upfront charge and you won’t pay any fees unless your rental is booked by a guest. Airbnb charges a service fee to hosts, and that fee is generally 3% of the rental. That fee is automatically deducted before you are paid by Airbnb.
How Do Cleaning Fees Work?
As a host, you can charge a cleaning fee if you choose to do so. The search results will show a price that includes the cleaning fee, so be aware that adding a cleaning fee can reduce the number of renters who consider your rental, because they’ll see a higher price in the search results. You can learn more about cleaning fees here.
How Much Money Can You Make on Airbnb?
The amount you make will depend on the home/unit/room that you are renting, as well as other factors like the location and your reviews and ratings. Riley and his wife rent out a bedroom and bathroom to make an average of $500 – $700 per month.
What Do I Need to Become an Airbnb Host? What are the Airbnb Host Obligations?
First, you need a home, unit, or room that you can rent out. Airbnb lists these requirements for hosts (quoted from their website):
- Provide essential amenities (including toilet paper, soap, linens/sheets, and at least one towel and pillow per booked guest)
- Be responsive (reply within 24 hours)
- Accept reservation requests
- Avoid cancellations
- Maintain a high overall rating
How Do I Get My House on Airbnb?
To get started as a host you can head to this page and create a free account. From there you will enter the details of your listing, set the calendar for your availability, set your pricing, and upload photos.
Want to read about other side hustle opportunities? If so, check out these articles: