By now, you’ve probably heard of Airbnb. You may have even stayed in one. Lately, millions of people are turning to Airbnbs as a low-cost and more comfortable alternative to hotels.

Modern cozy living room with dark coach and graphic print rug

If you love the concept and want to take it a step further, I’m going to tell you exactly how to become an Airbnb host so you can make a decent side income.

What is Airbnb?

If you aren’t familiar yet, Airbnb is a platform for vacation rentals. Qualified hosts can list their property for rent on the platform, manage the rental, and get paid all on the Airbnb platform.

The Airbnb platform makes sharing your property easy, profitable, and safe. To make the most money on Airbnb, you want to become a top-rated host. 

The good news is you can rent your entire home, a room in your home, or a separate building on your property. 

Types of Airbnb Rentals

You can list any property you have available for rent, but the most common options on Airbnb include:

Entire place

If you list your rental as “entire place,” it means the renters have exclusive access to the entire property. They won’t share the property with anyone, and they have private access to it. 

Most entire place listings have at least one bedroom, a separate living area, and a kitchen. If you occupy any part of the place, such as a lower floor, make sure to note it in the listing.

Private room

You can rent a room on your property while you live in the property too. A private room means the renter has their own sleeping quarters.

A private room can have its own bathroom or a shared bathroom. The same is true of the kitchen and living areas. Make sure your listing is as specific as possible so that renters know exactly what they’re getting and what level of privacy they’ll have.

Shared room

If you have a common room to rent or a room that renters would share, list it as a shared room. Note as many details as possible about the room, including how many people the renter would share the room with.

Factors to Consider Before Becoming an Airbnb Host

As you learn how to become an Airbnb host, you must learn about the certain factors you should consider, including the legal requirements in your area, how much to charge, and taxes.

Can you list an Airbnb in your area?

Airbnbs are allowed in most areas, but certain cities have stricter requirements. It’s worth the time it takes to find out your area’s requirements regarding short-term rentals. Time spent researching is a lot less expensive than a hefty fine for violating the law.

What prices should you charge?

Pricing is a key component in a successful Airbnb. If you price it too high, you may have fewer renters. But if you price it too low, you won’t make the right profits. Airbnb offers tools and metrics to help you compare your property to others in the area. But, other factors play a role, too, including:

  • Demand – When demand is high, it’s normal to charge more, but know how much is normal for the area.
  • Property premiums – Does your property offer amenities other properties in the area don’t offer? If so, you may be able to charge a higher rent.
  • Profits – Think about your profit margin. Are you renting just to cover the cost of your vacation home, or are you trying to make a profit?
  • Cleaning fee – It’s normal for Airbnb hosts to charge a cleaning fee, but again, find out what’s “average” in the area. Charge too much, and you’ll turn people away, but you want to be able to cover your costs too.

Who’s paying the taxes?

The taxes we’re talking about here aren’t income taxes, although those are a factor later in the article too.

Taxes, in this case, pertain to taxes the city or county requires short-term rentals to charge, much like a hotel fee. Airbnb works with some cities and counties, collecting taxes from the renters for you and paying the city the appropriate taxes. 

If you aren’t sure about the rules in your area, check with Airbnb and your local taxing authority to find out what you might owe, so you figure it into your pricing if you owe taxes.

How to Become an Airbnb Host in 7 Steps

1. Start your listing on the Airbnb host page

You’ll input the property address and the type of property you’re listing. Give as much detail about the property as possible. For example, renters want to know, is this a bed and breakfast, a bedroom in a shared apartment, or a cabin on the lake?

2. Select the number of guests the property can hold

Remember, you must have enough room for each person to sleep. In your listing, note how many bedrooms the renters can use and how many total beds there are so they can determine for themselves if the sleeping arrangements will work.

3. Set your price

I talked about the pricing factors above because it’s important to figure that part out before starting your Airbnb listing. 

Set a price that’s not so high that no one will even think about renting your property, but also not so low that they feel like they’re getting a steal.

A big part of the Airbnb rating system is value – they want to know what type of value renters feel they got from a property. If you price it too high, you may rank low on the value scale, but you may not get the clientele you would trust in your home if you price it too low.

Keep in mind, Airbnb keeps 3% to 5% of the listing price. So the price your guests pay isn’t what you receive. Airbnb keeps its portion first and pays you the difference.

4. Decide if you’ll manage the property yourself

Managing an Airbnb is a lot of work. Not only must you make sure the property is clean and ready for guests, but in the meantime, you’ll answer a host of emails, questions, and concerns.

You’ll have people asking you about the area, what to do there, and what amenities the property offers. They’ll also need you for things like check-in issues, emergencies at the property, and other miscellaneous requests.

Managing an Airbnb can feel like a full-time job, and if you already have one of those, you may want help. Bringing on a co-host means you share the responsibilities and some of the fees. However, most co-hosts don’t work for free, so make sure you work out an arrangement before bringing on a co-host, even if it’s a friend or family member.

5. Decide if guests can “instantly book”

“Instant book” is a feature Airbnb offers that you should consider carefully. While it may seem nice that someone can instantly book your property without any communication with you, it takes away your level of security.

Do you want just anyone renting your property, or would you rather have a conversation with them and be able to review their profile first?

Decide what you’re most comfortable with, but always err on the side of caution. There’s no harm in taking a few minutes to have a conversation with potential renters to make sure they’re a good fit.

6. Choose your cancelation policy

Since you’re the host, you’re in charge of the cancellation policy. You can choose from strict (no cancellations for any reason, and you only refund the cleaning fee) to flexible cancellation, allowing renters to cancel up to 24 hours before their check-in date.

It’s a good idea to have some flexibility too. Airbnb leaves cancellation entirely up to your discretion outside of the policy you choose with them. For example, if you choose the strict cancellation policy but have certain situations where you’d bend the rules and refund a cancellation, it may help with your ratings.

7. Establish rules from the start

You don’t want to be caught in the hot seat when a guest has an unusual request, and you aren’t sure how to respond. Instead, have written rules regarding how you want your property treated.

Will you allow pets? What about children? Is there a curfew, or are there certain inaccessible areas of the property? Write down all the rules and make them easy for everyone to see, so everyone is on the same page.

How Airbnb Hosts Get Paid

Airbnb collects the money from the renter upfront. Then, they hold onto the funds until 24 hours after the renters check into your property. At that point, you’ll get the money either from PayPal or direct deposit.

Maximizing Your Profits on an Airbnb Rental

The point of renting your property on Airbnb is to make money, whether just to cover the property’s costs or to make a profit. With millions of other properties vying for the same attention you want, you must stand out. As you learn how to become an Airbnb host, consider these tips:

  • Take professional pictures – A picture is worth 1,000 words when you’re looking at properties online. You want your property to speak to the right renters, so the images need to capture its ambiance and charm. This is an area it’s good to splurge because it could help you earn higher profits.
  • Be engaging – Guests choose Airbnb properties for the charm they offer over a standard hotel. Find ways to stand out and engage with your guests. Whether it’s amenities you offer that are unique for the area, or you get to know your renters and offer a “homey” feeling to the property. Decide what feels right for your audience.
  • Be a concierge – Remember, guests staying at your property are likely coming from another area. They aren’t familiar with the area like you are, and they’ll look to you for guidance. Offer tips on where to go, things to do, and let them in on “little secrets” in the area.
  • Find unique attributes and focus on them – Your listing itself needs to stand out. Renters likely have hundreds of options in your area alone, so find a way to make your property stand out. Think about what makes the property charming and focus on that.
  • Hire professional cleaners – Just like hotels have professional housekeeping staff, you should too. Even if you love cleaning, let the professionals handle it. They’ll leave a different feel in the home to make people feel comfortable and satisfied rather than looking in every corner to see what you missed.
  • Spoil your guests – Little things like fluffy towels, warm robes in the bathroom, or twinkling lights out on the patio to make the backyard romantic are the things your renters will remember. This is a time for them to get away, and any way you can spoil them will have them rating your property higher than any others.
  • Keep the kitchen stocked – You don’t have to have all the fixings for a 7-course meal, but leave your guests with the basics anyone needs in a kitchen, from working appliances to a fridge and pantry stocked with the basics. Don’t leave your guests wanting anything; instead, let them feel pampered.
  • Have contractors on speed dial – Life happens. You know it. I know it. If a pipe bursts in the middle of the night or the A/C goes out on the hottest day of the year, you need professionals who can get out to your guests right away, fixing the property and minimizing their discomfort.

Don’t Forget to Report Your Income

Any money you earn as an Airbnb host should be reported on your tax return. If you rent your property out for more than 14 days in a year, the income is taxable. If you rent it out fewer than 14 days in a year or use the vacation home yourself for at least 14 days in the year, you may not have to pay taxes on the income.

The number of bookings you have matters. If you have over 200 bookings or make over $20,000 in a year, Airbnb issues you a 1099 tax form. 

It’s best to meet with your tax advisor to discuss if you are required to report your Airbnb income and, if so, what expenses you can write off.

Final Thoughts on How to Become an Airbnb Host

Renting your property as an Airbnb is a great way to earn passive income, but it can be a lot of work too. Since the industry is so competitive now, you have to stand out from the crowd.

I suggest starting by learning the rules and regulations in your area to see if it makes sense, and then see how much you can make. Will it be worth your time, or will you barely break even?

If you decide to learn how to become an Airbnb host, the sky’s the limit with your income potential. Give your guests everything you’d want in a rental and see the money fly in from your property. 


How much does it cost to start hosting on Airbnb?

You don’t have to pay an upfront cost to host on Airbnb, but you should set money aside to cover damages, losses, or repairs that inevitably happen when you rent your property.

How much can Airbnb hosts make?

Total earnings depend on the size of the space you’re hosting and the area.