Airbnb Hosting Basics
Find out how to estimate your Airbnb hosting income and how much I truly earned my first year Airbnb hosting.
It’s officially been one full year since I opened my first Airbnb and I couldn’t be more excited to share my Airbnb hosting income report with you!
When you first start your Airbnb, the number one question most hosts wonder is, how much money can I actually make?
And the truth is, you’ll never know how much you can earn until you start your own Airbnb. But there are a couple of things that can help you get a really good idea of how much you can earn as an Airbnb host.
After reading this post, you’ll know exactly how much I earned my first year Airbnb hosting and how you can estimate your potential earnings.
This post may contain affiliate links. If you click a link and make a purchase, I may earn a commission at no additional cost to you. As an Amazon Associate, I earn from qualifying purchases. I’m not affiliated with Airbnb in any way (other than being an Airbnb host, of course). Read my full disclosure policy here.
Airbnb Hosting Income Report
How Airbnb Hosts Earn Revenue
As an Airbnb host, the amount of revenue you earn is determined by your nightly rate (how much you charge per night) and your occupancy rate (how many nights get booked).
That said, your nightly rate and occupancy rate are impacted by several factors. The location of your property is probably the biggest and most important factor. That’s because your location is what drives guests to your area. It’s part of what determines when they stay, how long they stay, and how much they’re willing to pay.
The best way to understand the revenue potential of a specific location is by using AirDNA’s revenue forecasting tool. You can use AirDNA’s revenue forecasting tool for FREE by entering an address here, where you’ll immediately get a revenue projection for the address you enter.
Other important factors include how many nights out of the year your property is available, the quality of your property, how many people it comfortably sleeps, your ratings, and much more.
For reference, my Airbnb is located in Lake Tahoe, which is a heavily-touristed town with two busy seasons: summer and winter. It’s a 3 bedroom, 2.5 bathroom condo that comfortably sleeps six people. It’s newly renovated and I use it solely to Airbnb, so guests can rent it out 365 days a year. This is all designed to maximize my profit, and over the past year, doing so has certainly paid off.
And, when it comes to your revenue, you need to know that it most likely won’t be a smooth, steady income. This is especially true if your Airbnb is in a heavily-touristed area, where people mostly travel there for certain seasons, like summer and winter.
For example, my Airbnb in Lake Tahoe grossed nearly $19,000 in revenue my very first month hosting because that month was the height of busy season in the area. Other months can have so few travelers that I earn $0.
All that’s to say, as an Airbnb host, you should expect your revenue to fluctuate a lot.
In addition to your nightly rate, you’ll charge your guests a cleaning fee, which is a flat rate that you set for each booking. Airbnb will pass this cleaning fee directly on to you, which you’ll then pay directly to your cleaning crew. For guidance on how to set your cleaning fee read this blog post.
Pro Tip: Download my free income report to see exactly how much revenue I earn every month.
Airbnb Hosting Expenses
Importantly, your “host payout” (what Airbnb pays you) isn’t just what you earn in revenue. Before paying its hosts, Airbnb first subtracts a couple of expenses: its host service fees (the 3% fee Airbnb charges all hosts for using its platform) and local occupancy taxes (which it then remits to taxing authorities on your behalf).
The amount remaining is what Airbnb calls your “host payout”, which gets paid to you 24 hours after the scheduled check-in for each booking.
That said, host fees and occupancy taxes are just a couple of expenses you’ll have as an Airbnb host. Below is a full list of expenses required to run an Airbnb. Get my complete guide on estimating your own Airbnb startup cost here.
- Mortgage interest payment (if you own your property) or rent (if you’re renting the property)
- Cleaning fees
- Occupancy taxes (this is a pass-through expense; see note above)
- Homeowner’s association fees (if applicable)
- Airbnb host fees (learn all about Airbnb host fees here)
- Restock supplies (get 100+ essentials for your Airbnb in one simple checklist)
- Utilities
- Travel (if you manage your Airbnb remotely and need to travel to it for property maintenance)
- Maintenance costs (get my full guide to property maintenance here)
- Property taxes (if you own your property)
- Insurance
- Short-term rental permit fees (if applicable)
- Airbnb pricing tool (I highly recommend using AirDNA to determine your pricing)
Have questions about these expenses? Learn more about each one of them in this blog post.
Pro Tip: See how much I paid for every single one of these expenses by downloading my free income report.
How to Estimate Your Airbnb Hosting Income Potential
The easiest way to estimate your Airbnb revenue is to use AirDNA’s free revenue forecasting tool. With AirDNA, you can get a revenue estimate in less than one minute and there’s no limit to how many free estimates you get. But, AirDNA only tells you how much revenue you can earn – it doesn’t tell you anything about your expenses or profitability.
To calculate your expenses and understand if your Airbnb business will be profitable, you need to use an Airbnb profit calculator. This free profit calculator can help you determine whether or not an Airbnb property is a good investment overall, including how much the value of your Airbnb property is expected to increase over time and how much you expect to earn when you sell the property. It’s an incredibly comprehensive tool that’s essential for anyone considering investing in an Airbnb property.
Takeaway
In my income report, I’m sharing it ALL: my revenue every single month, including the nightly rates and occupancy rates that got me there. I’m also sharing every single expense I paid (which, in all honesty, added up to A LOT more than I expected). And you’ll get to see my overall profit for the year (cha-ching!)
It’s crucial that anyone considering starting an Airbnb knows these exact numbers because you need to know what to expect as an Airbnb host. You need to see just how much it’s possible to earn your first year, how much that revenue can fluctuate, and how much you might have to spend on expenses.
Pro Tip: Download my free income report to get full breakdown of my revenue, expenses, and profit as a first-time Airbnb host.
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What questions do you have about Airbnb hosting income? Let me know in the comments.
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