A lot of people these days are wondering how to make money with Airbnb.
After all, having a job where you’re largely free to sit back and collect passive income from anywhere in the world sounds pretty great, right?
This article is your ultimate guide for how to make money with Airbnb without owning property. Sounds too good to be true? It’s not!
Read on to learn more, including expert insights from a six-figure Airbnb investor.
Is renting on Airbnb worth it?
Is renting on Airbnb worth it? Well, that depends! There are a lot of factors to keep in mind.
One of the most essential factors involves doing your research.
(Interior of Airbnb owned by Cécile)
You need to understand the basics of how the real estate market works and whether or not a given property will be lucrative or not, making this one of the top jobs for problem solvers.
You should also consider whether Airbnb arbitrage (explained below) is a possibility for you.
So much of whether a property will be successful or not has to do with its location, meaning you’ll need to do your due diligence as far as specific real estate markets.
Now, let’s take a quick look at some of the major pros and cons to renting on Airbnb.
You may also look into how real estate developers earn money and apply some of those tips and tricks to your own short term rental business.
Cécile Marot, who originally hails from France but hosts guests in Fez, Morocco, took advantage of the Airbnb platform to leave her night job as a chef behind.
For her, renting on Airbnb has not only been a financial success but a cultural one as well:
“Sharing with my guests is always a pleasure. Wanting to help them discover my city, its people, and its unexpected places that I love so much, while still having time for myself—that’s what changed my life.”
Like Cécile, so long as you can find a property at a good price in a good location with high demand, you should be in good shape. That said, no single investment is perfect, and Airbnb is no different.
Tactic for Success
While renting out on Airbnb is a business, Cécile emphasizes the importance of always focusing on the guests’ well-being: “In order to learn with Airbnb, it comes down to meeting others and being generous. Giving is a marvelous thing.”
What exactly is Airbnb arbitrage?
Airbnb arbitrage is one of the best ways that you can make money with Airbnb without putting a lot of your own money on the line.
In essence, Airbnb arbitrage means profiting from a short-term rental property without having to own it.
This is possible due to subletting, which is yet another way to make money with rental properties.
But is this legal? The answer, as is often the case, is that it depends!
There are certain cities and states that may have laws against Airbnb arbitrage, so it’s important that you do your homework before planning on this strategy.
Trend on the Rise
In our interview, Cécile said that when she started she “felt that tourism was on the point of changing radically.” By switching from Couchsurfing to Airbnb, Cécile took advantage of a new platform that has heavily disrupted the tourism industry in a way that was almost unthinkable just a decade or so ago.
In any case, the subletter should always have the landlord’s permission.
Many leases state outright that subletting is not permitted, so it’s also important to carefully read your current lease or any lease that you’re considering for Airbnb arbitrage.
Airbnb Arbitrage 101
There are certain key aspects of Airbnb arbitrage to keep in mind, and they include the following:
- You’re the Boss – You have almost total flexibility and control, which can be both good and bad depending on your business sense and people skills.
- Follow the Letter of the Law – The legality of Airbnb arbitrage can be complicated. Depending on your location, it may be feasible or it may be illegal.
- Market Conditions Can (and do) Change – Imagine you’re setting up your Airbnb business and then boom!—the Covid-19 pandemic hits. The only certainty in life is uncertainty, so have a back-up plan in place.
- Scalability – One great thing about Airbnb is that it provides passive income while also affording the opportunity to scale up over time.
- Know Your Risks – Every business carries some risks, and so does Airbnb arbitrage. While you have the ability to establish a rental business with limited capital, this method does expose you to risks like property damage.
Now, let’s consider other ways that you can start an Airbnb without needing a lot of your own capital!
How to start an Airbnb without money?
While it might seem impossible to start an Airbnb without a bunch of money, it’s definitely not!
There are ways that you can get a good deal on properties either as a buyer or renter and then either rent or sublet the property as an Airbnb (as shown by the Airbnb arbitrage section above).
So, besides Airbnb arbitrage, here are a few other ways that you can start an Airbnb without capital.
I can tell you myself that it’s quite possible to make money on Airbnb without any startup capital. And no, I’m not talking about renting!
Airbnb launched the Airbnb Experiences platform back in 2016, but it’s really taken off in recent years. The best part is that you don’t necessarily need any money or property to start your own experience.
For example, I recently started a plant-based food tour of Paris. I recognized a niche that I have experience and knowledge in and built a walking tour around it.
I’ve just received my first payment from Airbnb with absolutely zero capital invested.
This can be a good way to earn money while in medical school or university if you know your surrounding city well enough to show it off to visitors.
Trend on the Rise
Airbnb’s “Experiences” platform has recently gained rapidly in popularity. It connects tourists with locals who offer some kind of unique experience (hence the name). This trend tells us that people cannot get enough of personalized travel experiences and testifies to Airbnb’s success (and continued potential) as a disruptor in the billion-dollar tourism industry.
Become a Property Manager
A property manager for an Airbnb takes care of the ins and outs of running the rental without owning it.
Property managers are hired by property owners who don’t want to spend the time and energy on the tedious and time-consuming day-to-day tasks.
They hire property managers in a similar way that they hire virtual assistants.
If you become an Airbnb property manager, you’ll be paid for your work without needing to invest any capital or take on any of the larger risks that come with investing and owning a property yourself.
Take Advantage of the Space You Already Have
Do you have an unused room? A garage that you could clear out? An unused shed?
If you have a living space that’s vacant or another space that you could convert into a guest room, then you can set up an Airbnb much more easily than starting from scratch.
Yes, you may need to spend some money if you are converting a space like a garage or shed, but you will make your money back in due time so long as you are in a desirable location.
Tactic for Success
Cécile started out by renting out spare rooms in her own home. This proximity is one aspect that distinguishes many Airbnb’s from the sterility of hotel rooms: “Life isn’t about money but rather values and exchanges. When we host, we should welcome people with generosity.” Simply being kind and welcoming goes a long way.
How to make the most out of your Airbnb?
If you want to stand out on Airbnb, you have to work hard not only on the actual experience you offer but also on your outward presentation.
Here are some pointers so you can gain more guests, earn better feedback, and keep the ball rolling.
Don’t Skimp on the Details
The devil is really in the details. Keep the following in mind to help stand out:
- Presentation is Key – If you have just a couple of unhelpful, poorly taken photos, it will be much harder for you to attract guests. Consider hiring a photographer if you need to.
- Be Thorough – You should have lots of photos and provide plenty of details. The last thing you want is guests freaking out and sending you all kinds of questions during their stay.
- Transparency Helps Avoid Negative Reviews – Is parking a challenge? Is there a small problem with the sink? Let people know these things upfront so they know exactly what they’re getting.
Care About Your Host Rating (But Not Too Much)
Everyone will see your host rating and its importance can’t be understated. The higher it is, the more likely the algorithm will show your listing to people looking for places to stay.
Taking a “the guest is always right” stance as a baseline can be a helpful way to ensure that you receive good feedback.
Another way is to be thorough and transparent in your listing (as mentioned above).
That said, there will always be difficult-to-please people and those who leave ratings that are simply unfair.
For example, people who complain about something that you clearly stated in the listing.
So, while you should do your best to keep that host rating as high as possible, you also shouldn’t worry excessively about it.
With time, your overall rating will be high so long as you provide a great value to your guests.
It doesn’t hurt, however, to respond to negative reviews—in a calm but stern tone—so that people can see both sides of the story.
According to Airbnb, over $150 billion—yes, billion—has been earned by Airbnb hosts. It’s no wonder that people are looking to get a piece of the action.
Many people may feel that they lack the resources to make money with Airbnb, but the reality is that you can earn money with Airbnb with very little (or even zero) capital.
It’s really just a question of desire and good business sense!