You don't have to buy and own properties to make money from real estate. One of the best ways to earn money from investment properties without actually selling, buying, or owning them is to start an Airbnb management business. This refers to opening a company that specializes in providing all services that short term rental properties need in order to generate income for their owners, from listing them and marketing them on vacation rental websites, all the way to maintaining them and repairing them.
This guide covers everything that you need to know about getting into Airbnb property management including:
- What an Airbnb Management Company Is: We'll define what an Airbnb management business means, summarize the main responsibilities, and provide some top examples.
- How an Airbnb Management Company Works: We'll describe different types of short term rental management businesses and the services that they cover.
- How an Airbnb Management Company Makes Money: We'll explain the fees that Airbnb managers charge as well as some costs they need to take into consideration.
- What You Need to Start an Airbnb Management Company: We'll discuss the legalities and technical requirements of the vacation rental management industry.
- How to Market Your Airbnb Management Business: We'll provide effective marketing strategies to help you get started and continuously grow your business.
- The Process of Starting an Airbnb Management Company: We'll go through the steps to launch an Airbnb property management business.
- The Pros and Cons of Starting an Airbnb Management Company: We'll highlight the main advantages and disadvantages of becoming an Airbnb property manager.
What Is an Airbnb Management Business?
An Airbnb management business, or an Airbnb property management company, is a qualified team of professionals that takes care of second homes and investment properties rented out on a short term basis. They act on behalf of the owner to make sure that the property is provided with everything that's needed to attract bookings, generate income, and stay in good condition. They also ensure that guests are offered all services they need for an outstanding stay that will result in a 5-star review. Finally, they make sure the owner is in the know about the performance and the state of their property.
The duties and responsibilities of Airbnb property managers vary widely, depending on the setup of the company, its scope of work, and the agreement with the owner. Nevertheless, the main services that vacation rental management businesses cover include getting properties ready for guests, listing and marketing them, supporting guests, housekeeping, managing revenue, maintaining the homes, and reporting to owners. Most companies rely heavily on technology - whether proprietary or third-party - to streamline operations, communicate with guests and hosts, and maximize performance.
Some of the best Airbnb management companies in the U.S. that beginners can learn from and get inspired by include Summer, Vacasa, AvantStay, Casago, Air Concierge, SkyRun Vacation Rentals, Awning, Evolve, and RedAwning.
How an Airbnb Management Business Works
The day-to-day operations of Airbnb property management businesses vary based on multiple factors, and the main one is the type of services that they provide. There are two main types of companies: half-service and full-service Airbnb management businesses.
Half-service Airbnb management companies provide online services that help automate and streamline the most time-consuming aspects of running a short term rental business. Meanwhile, full-service Airbnb property management means offering a comprehensive set of online and on-the-ground services to optimize the performance of vacation rentals, while their owners can earn passive income from their investment.
Following is a detailed breakdown of the work that you will be expected to cover depending on the model that you choose when starting your Airbnb management business. Keep in mind that you can have a company that offers both models so that owners can choose what suits them better!
Half-Service Airbnb Management Business Responsibilities
The work of half-service Airbnb managers focuses heavily on the use of technology to streamline and automate operations while maximizing results for owners. There are no on-the-ground works, which makes it easier to have nationwide coverage.
The typical customers of these companies are hands-on investors who'd like to retain control over the management of their property but need help in boosting efficiency and improving performance.
The standard work of half-service Airbnb property management companies includes:
- Providing legal support (optional)
- Taking professional listing photos (optional)
- Listing and distributing properties on the best short term rental websites such as Airbnb, Vrbo, Booking.com, and more niche platforms (this is usually done from your professional Airbnb host account to improve ranking and outreach)
- Optimizing listings for the Airbnb SEO algorithm
- Marketing and advertising on Google, social media, and via email
- Setting up dynamic pricing
- Managing revenue
- Communicating with and supporting guests before, during, and after stays
- Managing reservations and booking calendars
- Coordinating guest check-ins and check-outs
- Managing guest reviews
- Collecting and remitting short term rental taxes
- Offering Airbnb insurance (optional)
- Reporting to the owner
Based on these common responsibilities, if you decide to start a half-service Airbnb management business, you'll do most of the work from your phone or computer. You don't need to visit the property or coordinate a large team of cleaners and maintenance staff. Some professionals you might consider hiring include specialists in the areas of vacation rental marketing, Airbnb data analysts, and guest support. You'll also need technical personnel to make sure your online platform is always up and running.
Full-Service Airbnb Management Business Duties
Becoming a full-service Airbnb property manager requires learning and coordinating a much bigger portfolio of services. In a nutshell, you'll need to completely replace the Airbnb host. While technology can cover many responsibilities, there's plenty of work that you'll need to do yourself or via your team too. This means that achieving bigger market coverage is harder but not impossible.
Meanwhile, your typical customers will include out-of-state investors, owners of large portfolios, and hosts looking for passive income.
The list of services provided by full-service businesses includes:
- Interior design and furnishing (optional)
- Setting up a smart home (optional)
- Amenity installation (optional)
- Getting short term rental licenses and permits (optional)
- Providing legal advice on regulations (optional)
- Offering short term rental insurance, including property damage and general liability via partners (optional)
- Property staging for professional listing photos
- Professional photography
- Preparing guestbooks
- Listing rentals on bigger and smaller vacation rental websites (usually under your professional account) and keeping listings up to date
- Listing optimization including the listing title, description, amenities, and photos
- Marketing and advertising including organic and paid strategies
- Dynamic pricing
- Revenue management and optimization
- 24/7 guest communication and support
- 24/7 host communication and support
- Guest screening
- Concierge guest services (optional)
- Offering additional Airbnb experiences (optional)
- Arranging guest check-ins and check-outs
- Reservation and booking management
- Calendar sync and coordination
- Housekeeping between guests including cleaning, linen change and laundry, and guest supply restocking
- Guest review collection and management
- Amenity maintenance (optional)
- Regular inspections of the property
- Property maintenance (through your in-house team or a network of local vendors)
- Coordinating repairs
- Vacation rental tax collection and remittance
- Financial and performance reporting to the owner
If you opt in for full-service management, your work will be a mix of on-the-ground operations and online responsibilities. Building a strong team and coordinating its work effectively is a major factor for the success of this type of business.
Services Not Covered by Airbnb Management Businesses
While the scope of work of short term rental managers can vary a lot, there are certain tasks that they almost never cover. These include:
- Large-scale property renovations: Property managers do not engage in major renovation works. These are handled by Airbnb design, furnishing, and renovation companies.
- Mortgage payments: They do not take over the monthly payments of the mortgage.
- Utility payments: Similarly, Airbnb managers do not pay utility bills on behalf of owners.
- Some tax payments: While short term rental management businesses can collect and remit taxes related to the business (such as transient occupancy tax), they do not handle property tax and rental income tax for the host.
- Legal compliance guarantee: Airbnb property managers might provide advice on legal matters such as licensing and permitting, but it is the responsibility of the owner to ensure legal compliance.
- Revenue and performance guarantee: As a property manager, you should not guarantee a certain level of income and boost in performance. Instead, you can share your average results with prospective leads and work actively on improving the performance of their property through marketing, pricing, and excellent services to guests.
Before you are ready to start your own Airbnb management business, you need to have a clear understanding of what work you will do and which services remain outside your scope.
In terms of market coverage, you can have a smaller local business that serves short term rentals in your city, county, or state, or you can run a national company that works across the U.S. Indeed, most companies start out as local property managers and grow to nationwide coverage over time once they have the expertise, team, and brand name to engage with investors outside their headquarters market.
The Pros and Cons of Starting an Airbnb Management Business
Running an Airbnb management company comes with major advantages but also some disadvantages that you should be aware of before taking this important step in your career.
The main benefits of building your own Airbnb property management business include:
- Benefiting from real estate investments without buying, owning, and selling properties
- Being a part of a constantly growing industry (hospitality and short term rentals)
- Strong demand from Airbnb hosts
- Flexibility to choose services and markets
- Scalability to expand into new properties, services, and locations
- Negligible initial investment
- Consistent stream of income
- Control over your income (based on the number of properties and their performance)
- Being your own boss
- Sense of achievement and satisfaction (when improving property performance)
Some cons of being an Airbnb manager are:
- No fixed working hours schedule
- Around-the-clock readiness
- Highly demanding industry
- Growing competition from other property managers
- Need to offer competitive fees
- Seasonal changes in income
- Increasingly restrictive Airbnb laws across the U.S. and world
- Unreasonable interventions by clients
- Pressure from property owners to achieve certain results
- Liability and risks
Before you decide to be an Airbnb property manager, you need to consider the downsides and be ready to tackle these challenges. The benefits, on the other hand, are more than attractive, making starting an Airbnb management business a solid career choice within the real estate industry.
How an Airbnb Management Business Makes Money
Airbnb management companies make money from the monthly fees that they are paid by owners. The standard in the vacation rental property management industry is to charge a monthly fee (or commission) that is equivalent to a certain percentage of the booking revenue including all additional fees such as cleaning fees, pet fees, and extra guest fees. Flat rates are very rare in the business.
The reason for this property management pricing structure is to ensure that you - as a property manager - do everything possible to boost results for hosts so that your earnings are also maximized. It's a win-win situation: The more money your customers make, the more money you make.
In addition to a monthly Airbnb management fee, some businesses also charge extra fees for additional services. These can include one-time services like design and furnishing, annual services such as insurance and linen provision, or recurring services like amenity maintenance and landscaping. Very few companies also charge an onboarding fee, while early-cancellation fees are more common.
Generally speaking, hosts prefer to work with property managers that have an easy-to-understand, transparent pricing scheme with no hidden fees. Thus, it's better to include everything under a single monthly fee, but you can have two to three different tiers of packages. It's important that the pricing of each package reflects the amount of services included in it and the value that hosts gain.
Typically, Airbnb property managers charge 10-15% of booking revenue for half service and 25-45% of booking revenue for full service. Additional fees can be anything from a few dollars for basic tasks to thousands of dollars when it comes to full-scale Airbnb design and furnishing services.
In most cases, short term rental managers are responsible for collecting all fees from guests in a dedicated bank account for easy and accurate tracking and reporting. At the end of the month, they check how much revenue the property has generated, calculate their respective fee, and withhold it. They remit taxes and also pay fees to maintenance service suppliers and any other third-party professionals that were engaged during the month. Finally, they transfer the remainder - the owner payout - to the owner.
Airbnb management fees example
Let's take a look at an example to make things clearer. One of the properties that you manage generated a total of $3,000 in a month. Over the course of the month, you had to contract with a vendor for maintenance work that added up to $350. Your property management fees are 25% per month plus $100 for hot tub maintenance and $60 for lawn services.
This means that at the end of the month, you'll pocket:
(25% x $3,000) + $100 + $60 = $910 in Airbnb property management fees
You'll transfer $350 to the maintenance vendor, and you'll wire the remaining $1,740 to the owner and make $910 as the property manager.
Airbnb expenses and costs to consider
When setting up your fees, you need to take into account what competitors are charging and also what expenses you will incur. The main overhead and recurring expenses that Airbnb property management businesses need to pay include:
- Property management team salaries
- Independent contractor fees
- Office rent and utility bills (unless working remotely)
- Office furniture and equipment (if not working remotely)
- Transportation costs
- Marketing and advertising costs
- Software subscription costs
- Airbnb host and other listing fees
- Taxes
It's important to estimate the costs you have to cover to start and run an Airbnb management business and make sure that the fees that you charge are enough to cover expenses and achieve profitability.
Once you've set service packages and pricing for them, you can decide whether to publish them on your business website or ask interested property owners to get in touch to get a quote. In any case, it's a must that the Airbnb management agreement that you sign with each owner includes the exact fees that you will be paid and what services are covered by them. That's the only way to ensure smooth operations and no conflicts with hosts down the road.
What You Need to Start an Airbnb Management Business
The documentation and requirements for launching an Airbnb property management business depend on the legal framework in your market. Keep in mind that if you plan to operate in a few different locations, you need to check all relevant regulations.
The main things that you need to start operations include:
- Real estate license: In some U.S. states and cities, becoming a short term rental property manager requires having a real estate license, just like becoming an agent. This means you might need to enroll in a course and pass an exam.
- Business license and tax licenses: You need to decide on the legal structure of your business and register it with local and federal authorities. You need to obtain all applicable business and tax permits and licenses to make sure you can pay taxes as soon as you start operations.
- Team: Build a team of full-time or part-time employees and independent contractors to help with different tasks.
- Network: Start growing your network of other real estate professionals that will help you generate leads and offer comprehensive services.
- Value proposition: Decide what will distinguish your Airbnb management business from competitors to sell services to customers.
- Business strategy: You have to put down a solid business strategy that has a vision of where you want to reach with your business, when you want to be there, and how you plan to get there.
- Marketing strategy: You should develop an in-depth strategy to market your business to property owners and your listings to guests.
- Brand: Start working on creating a distinguishable brand for your business.
- Software: Set up access to the best Airbnb property manager software tools to streamline and enhance work. This includes but is not limited to PMS solutions, dynamic Airbnb pricing tools, data and analytics software, communication platform, Airbnb channel manager, reservations manager, lead management software, Airbnb accounting software, and more.
- Website: It's important to build a website where you can market your business, provide information about your services, highlight success stories, showcase customer testimonials, and market properties for rent.
- Airbnb management contract template: You need to draft a solid, comprehensive short term rental management agreement that outlines the rights and responsibilities of both sides (you as the property manager and the property owner) including the precise services and the fees.
- Insurance: You need to make sure that your business is insured as there is a lot that can go wrong with managing short term rentals.
- Professional listing accounts: You have to create host accounts on Airbnb and the other websites where you plan to market properties. Most Airbnb managers list from their professional accounts to benefit from a Superhost status and more reviews.
It's a good idea to create an Airbnb manager checklist and cross out each of these requirements as you complete them. This will help you keep things organized as you start an Airbnb management business and also create a sense of accomplishment as you go through each necessity.
How to Market Your Airbnb Management Business
As soon as your business is ready to launch, start marketing it to potential customers to generate property management leads. There are both more traditional and more creative strategies that you can try.
Traditional ways to market your Airbnb property management business include:
- Building a website and focusing on SEO
- Listing your business on Google My Business and other business directories
- Using social media, especially Instagram and LinkedIn
- Utilizing video marketing, particularly YouTube
- Generating a list of leads for email marketing
- Starting a referral program
- Relying on your network of real estate professionals
- Attending real estate investing meetups and events
- Interviewing for relevant websites and local publications
- Running paid ads on search engines and social media sites
- Publishing printed ads in local publications
- Printing and distributing flyers and brochures
- Cold calling
- Buying leads
Creative marketing ideas for property management businesses include:
- Partnering with Airbnb investment platforms that help investors find and buy properties to receive leads
- Working with investor-friendly agents to get access to their clients
- Collaborating with long term rental property managers or Airbnb managers covering other markets to exchange referrals (not direct competitors)
- Holding Airbnb investing and management webinars
- Running a short term rental investment and management podcast
- Working with influencers in the field
- Offering free investment and management consultations
Your Airbnb management business marketing strategy should include a mix of online and offline ideas to reach both more traditional and more modern short term rental property investors.
The Process of Starting an Airbnb Management Business
Now that you know what it takes to start a vacation rental management business, let's summarize the steps you need to take:
- Decide on an Airbnb management business model (half-service vs full-service) and market coverage
- Enroll in a course and pass the exam if you need a real estate license in your market
- Start learning about the hospitality and short term rental industry and your local Airbnb market
- Check and understand short term rental regulations in your market(s)
- Get a business registration and necessary licenses/permits
- Figure out appropriate taxes or bring in a pro to help
- Find out your unique value proposition
- Create a business strategy
- Define performance metrics (KPIs) for your business and set up a tracking mechanism
- Start networking with agents, brokers, lenders, designers, furnishing companies, insurance providers, other property managers, and other local businesses
- Put together a marketing plan and start executing it
- Launch a website and social media accounts for your business
- Build a team (you can start with a few part-time contractors and expand your team to full-time employees as the business grows)
- Find and vet third-party service providers
- Draft an Airbnb management agreement (that might require the help of a real estate lawyer)
- Take care of Airbnb insurance (in most cases, property managers are listed under the short term rental insurance of owners, but you need to make sure you are covered)
- Set up Airbnb management tools and software
- Create host accounts on Airbnb and other platforms where to list properties in your portfolio
- Set up an office (unless working remotely)
- Get your first client
While this looks like a long list of steps you need to go through, the process is very similar to starting any other business. Meanwhile, being an Airbnb property manager comes with many important benefits that make it totally worth it.
And if you need some help in getting started, you can check out Summer. This is the only all-in-one system built for Airbnb managers by Airbnb managers. The platform helps with everything from receiving leads directly and converting them into clients, all the way to accessing nationwide Airbnb data, analyzing trends, tracking performance, improving results for owners, and growing your Airbnb management business.
Bottom Line
Starting an Airbnb management business can be a lucrative opportunity to benefit from short term rentals without buying and owning one. The market is growing as travelers choose vacation rentals over hotels and investors prefer short term rentals over long term rentals.
To launch your career as an Airbnb manager, just follow the steps outlined above. Have a clear vision and strategy, comply with legal regulations, build your expertise, continue generating new leads, and exceed both guest and host expectations to succeed in the field.
