How To Start an Airbnb in 8 Steps

Once upon a time, hotels were the dominant choice for tourists looking for overnight stays. Now, six in 10 travelers prefer Airbnbs over hotels, with the platform boasting 6m+ listings in 100k+ cities worldwide.

If you want to capitalize on this booming market, you first need to learn how to start an Airbnb — a solid, profitable choice when figuring out how to start a business.

Table of contents:

• What is Airbnb?
• How to start an Airbnb business
• How much does it cost to start an Airbnb?
• Are Airbnbs profitable?

What is Airbnb?

Started in 2007 by Brian Chesky and Joe Gebbia, Airbnb is a platform that connects hosts to travelers looking for temporary stays. 

Hosts can post entire houses, apartments, private rooms, hotel rooms, and shared rooms on the platform. Customers then search through options based on their location, preferences, price, and ratings.

Compared to hotels, Airbnbs tend to offer a more personalized experience, which often includes:

• Improved amenities (e.g., bigger kitchens, faster WiFi)
• Lower costs
• Unique stays (e.g., decorated according to local culture)

Airbnb currently boasts 4m+ hosts, with many getting accepted and verified within 24 hours of creating an account.

How to start an Airbnb business

1) Look at local laws

Before starting an Airbnb, make sure you comply with local government restrictions. Regulators often restrict Airbnbs to safeguard against landlords evicting tenants in favor of operating short-term rentals, or to ensure neighborhoods stay quiet and residential.

Depending on the location, this means you may have to register your Airbnb with the city, pay additional taxes and fees, or even modify the minimum number of nights required for each guest. Across all locations, most hosts must register for a general business license.

For example, in New York City, hosts are required to share their personal information and listing information with the city, unless they only host long-term stays (minimum of 30 days per booking).

Santa Monica also maintains a multitude of restrictions on Airbnbs, requiring hosts to live on the property during a guest’s stay, get a business license, and charge a 14% occupancy tax from Airbnb users.

Pay attention to local laws as they vary, change often, and can significantly impact your ability to host guests.

2) Analyze the attractiveness of your location and property

Though you can host your listing wherever you live, not every property makes for a solid Airbnb listing. A strong Airbnb usually has some of the following characteristics:

• Proximity to popular tourist attractions (e.g., museums, historical sites)
• Limited competition
• Low variance from seasonality
• Near public transportation (e.g., buses, trains)

Additionally, you also want to consider other aspects of running an Airbnb, such as the severity of Airbnb restrictions in your area and the amount of maintenance required to keep the property up and running.

It makes no sense, for example, to pay extensive upkeep fees if your area sees few visitors.

3) Get permission from building management, if necessary

If you live in a rental apartment or own a condo, you will likely need permission from either the property owner or building manager. This usually entails getting approved to make your unit an Airbnb and, potentially, complying with additional regulations specific to your building.

Airbnb offers advice on making a solid first impression with your building manager, which includes:

• Demonstrating your care for your property by showing the manager your space
• Explaining to your building manager why you want to host
• Sharing Airbnb policies that protect hosts, including their guest identity verification, $3m protection against damages, $1m in liability insurance, and more
• Establishing rules with your building manager, such as how often you plan to host
• Communicating with neighbors on your intentions and asking them to report guest complaints to you

4) Prepare the space for guests

Set up popular amenities

After getting approval, prepare the property for guests. Consider what amenities guests look for in a listing and add them to your unit. Airbnb conducted a survey and found that guests primarily look for units with the following amenities:

• WiFi
• A kitchen
• Free parking
• A washer and dryer
• Air conditioning and heating
• Self check-in
• Workspace
• Pets allowed

Figure out how you can fit popular amenities into your listing. For example, you could convert a corner of the living room into a workspace that includes a desk, a comfortable chair, a printer, and other supplies. You can secure other amenities, such as high-speed WiFi, by upgrading service for your unit.

Ensure guests can self check-in

You will likely want to include a self-check-in process, which means the guest can check into their space without needing to speak to the host. You can achieve this by installing a key lockbox, a keypad, or a smart lock on the outside of your unit.

Alternatively, you can leave a key with building staff as long as they stay on the property 24/7.

Stock up on basic amenities and safety features

This means storing supplies like extra towels, bedsheets, pillows, and soap. Additionally, you need to ensure your listing includes safety features such as a carbon monoxide detector, a smoke alarm, a fire extinguisher, emergency numbers, and even a first-aid kit.

Include accessibility amenities

If possible, try and make your hosting accessible to those who use wheelchairs, canes, or other mobility aids. For example, include a step-free entrance to the house, make door frames at least 32 inches wide, and include bars in the shower, as well as other features.

Add amenities for family- and pet-friendly stays

If you plan on hosting families with children or pets, guests will appreciate extra amenities to accommodate them. This includes water bowls, high chairs, a crib, and anything else to make their stays easier. You may also want to consider pet-proofing your listing by moving any knickknacks to higher shelves or ensuring pets cannot knock over trash cans.

Include extras for a better experience

Though not necessary, including the following could improve your guests’ experiences and, in turn, increase your listing’s rating:

• Snacks (e.g., chips, granola bars)
• Coffee or tea
• Cooking supplies (e.g., pots and pans, bowls and plates — picking good-quality ones is an added perk for guests)
• Glasses (e.g., wineglasses, cups)
• Adapters and chargers

Putting everything together, consider using the following checklist to prepare your listing for a solid Airbnb experience.

5) Hire a crew

You could manage an Airbnb by yourself. However, this may end up being a time-consuming responsibility. If you anticipate receiving significant revenue from your hosting, you should consider hiring a crew. This could include cleaners and maintenance crews (e.g., plumbers, handymen, and electricians).

However, remember hiring could bring in the issue of additional taxes and paperwork. You may want to first launch your Airbnb, determine how much time you can spend on its operations and upkeep, and then figure out if you need to hire someone.

6) Price your Airbnb

To price your Airbnb, first figure out daily costs. This means bringing together your utility bills, property taxes, maintenance costs, and any other expenses for the unit. Remember to convert all costs to daily, so if you pay a monthly WiFi bill, divide that by 30.

Once you calculate your daily expenses, you now know the minimum daily rate to charge to break even. Of course, you want your Airbnb to generate profit, so you should create a healthy margin based on additional market research. Airbnb lets you compare your property to similar listings, which gives you an idea on what to charge.

To optimize pricing, consider the following strategies:

• Including a cleaning or pet fee
• Incorporating dynamic pricing (e.g., your daily rate goes up during peak travel seasons or holidays)
• Featuring length-of-stay discounts (e.g., offering discounts for guests staying longer than one week)

You can then use your daily rate to estimate how long it will take to cover startup costs to get the listing running, such as amenities you purchased or renovation work.

7) Take high-quality photos of the property

You can either use a high-quality camera or, ideally, hire a professional photographer to capture the space. To ensure the quality of your photos, first do the following:

• Clean the property
• Let natural light in
• Take landscape photos instead of portrait
• Capture distinct amenities, such as quirky artwork or a fancy kitchen setup
• Take photos of accessibility features

8) Create an account and upload your listing

Start by creating an account, which will require your ID for verification. Then, create a listing under the Host section of your profile. Now comes the fun part: making your property stand out from the crowd.

Your title should cater to your intended demographic, whether that means an apartment for a remote worker or a vacationing family of four. Consider the following guiding examples:

• “Cozy Private Apartment Ideal for Working From Home”
• “Large 3BR Cabin w/ Private Pool & Jacuzzi”
• “Historic Brownstone Near Brooklyn Bridge”

Since the title can only have 50 characters, use all of it wisely. This means shortening common words such as “bedroom” and “with” to “BR” and “w/,” respectively.

In your description, emphasize what guests will experience in the property. Will it make them feel productive, but stress-free? Will it promise a home-away-from-home experience? Will it place them in the heart of a bustling downtown area? What experience do you hope guests get out of their stay?

Alongside positives, include any relevant downsides. Someone who struggles to sleep with noise, for example, would benefit from knowing whether an Airbnb sits on a busy street.

Next, select the amenities your listing features and set house rules. You can customize rules depending on your unit, so remember to include whatever you want guests to keep in mind (e.g., keep noise down after 10pm).

Finally, determine the availability of your unit. One-night stays could generate more bookings, but it takes more time and energy to check in a guest and immediately clean up after them.

How much does it cost to start an Airbnb?

An Airbnb costs, on average, $6k to start — assuming you already own the property. Putting everything together, Airbnb costs include:

• Cleaning and maintenance (e.g., supplies, cleaner fees)
• Amenities (e.g., purchasing workspace items)
• Utilities (e.g., electricity, WiFi)
• Short-term rental fees (e.g., business licenses, taxes)

However, costs can vary depending on your location, the listing, and amenities offered. For example, hosting a private room inside a house will likely cost much less than an entire house.

Are Airbnbs profitable?

Airbnbs drive more profit than long-term rentals, bringing in a cash on cash return of 3.62% compared to long-term rentals’ return of 3.41%. If given the choice between renting long term (i.e., yearlong leases) vs. short term (i.e., Airbnb stays), it makes more sense to host on Airbnb for greater profit.

In 2021, Airbnb hosts in North America brought in an average of ~$41k, though keep in mind some hosts could have multiple properties. Other regional breakdowns include:

• Europe: ~$14k
• Asia Pacific: ~$15k
• Latin America: ~$9k
• Africa: ~$8k

Of course, if you do your research, invest time in your property, and optimize your operations, you may make much more than average.

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