Following the launch of Airbnb in 2008, the short-term rental industry has experienced rapid growth. One of the main benefits is that unlike many other investment strategies and business models, Airbnb is accessible and affordable for a wide range of individuals. Another major advantage is the endless options to generate income from vacation rentals, both actively and passively, whether you own a property or not, and regardless of your initial capital. In this article, we're sharing how to make money from Airbnb. Our top ten creative ideas offer profitable, yet actionable opportunities for both newbies and experienced hospitality experts.
No matter how you choose to generate revenue from Airbnb, access to accurate, reliable, comprehensive, and actionable data is crucial. Summer Forecast is your go-to platform for building a high-performing Airbnb portfolio. Our institutional-quality Airbnb data and forecasting tools are designed to empower investors and property managers alike to make smarter decisions. Ready? Let's get started!
Is Airbnb a good way to make money?
The short answer is: Yes, Airbnb can be an excellent way to make money, both in the short and the long term. The short-term rental (STR) industry, synonymous with the Airbnb industry, was essentially launched a few short years ago, in 2008, when Brian Chesky, Joe Gebbia, and Nathan Blecharczyk founded Airbnb. By 2022, the global STR market already had a revenue of $100.8 billion, which is expected to reach $228.9 billion by 2030, marking an impressive CAGR of 10.8%. The North American market in general–and the U.S. market specifically–generates the largest share of revenue across all regions worldwide. And, while the Airbnb industry in the U.S. has already experienced strong growth, it has not peaked yet, offering profitable opportunities for newcomers.
One of the best things about Airbnb is the many options to make money that can easily match the goals and aspirations of individuals with different professional backgrounds, budgets, levels of experience in hospitality, and time availability. For example:
- Homeowners can rent out a spare room to supplement their household income
- Investors can buy a property or an entire portfolio to rent out on a short-term basis to generate consistent revenue
- Property managers can work with vacation rental owners locally or nationally to earn a percentage of their monthly income
With each of these strategies, you can grow your Airbnb business at your own pace and based on your needs.
What type of Airbnb is most profitable?
The most profitable Airbnb business is the one that's built on smart decisions, based on solid data and analysis. When getting started, you should choose both a market with favorable conditions and a property with a strong potential.
In terms of locations, urban markets are great for hosting business travelers and digital nomads, rural areas are ideal for catering to remote workers and nature enthusiasts, while beach resorts and ski destinations are perfect for welcoming friends and families on vacation.
A few of the top short-term rental markets that you may not have considered include Charleston, SC for good occupancy rates, Alexandria Bay, NY for strong daily rates, Wawona, CA for above-average revenue, and Tofte, MN for proven ROI. However, before selecting the best Airbnb market for your budget and goals, make sure to check out local short-term rental regulations in that area.
Similarly, the best type of Airbnb property depends on the market, local demand, available competition, ideal guest persona, and other factors. Downtown condos, waterfront houses, suburban single family homes, and unique properties can be equally profitable as long as their choice is aligned with the preferences of local visitors, the nature of the market, and the overall guest experience provided by you.
To find top-performing properties in the best Airbnb locations nationwide, check out Summer Forecast. Our market, neighborhood, and property level search and analysis tools help you customize your investment journey in the way that makes the most sense for you. With a few clicks, you can locate the top markets for your budget and needs and the most profitable properties for sale, based on data with an unmatched level of accuracy.
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How to make money from Airbnb
Now it's time to take a look at the best ways to make money from short-term rentals, for owners, managers, and more.
These are the top ideas for how to make money from Airbnb or grow your current income from your short-term rentals:
- Get into Airbnb arbitrage: Best for limited-budget investors
- Manage Airbnb rental properties: Best for non-owners
- Generate more Airbnb property leads: Best for existing property managers
- Start an Airbnb concierge services business: Best for hospitality professionals
- Make smarter investment decisions: Best for beginner investors
- Build an Airbnb portfolio: Best for experienced investors
- Host experiences: Best for existing hosts
- Cut down on expenses: Best for hosts running out of options
- Benefit from Airbnb management tools: Best for DIY hosts
- Buy Airbnb stocks: Best for passive investments
Now, let's have a look at what each of these strategies for making money from Airbnb entails, how to get started, who it is best for, and what the main pros and cons are.
1. Get into Airbnb arbitrage: Best for limited-budget investors
One of the best ways to make money from Airbnb without buying and owning an actual investment property is Airbnb arbitrage. This refers to renting a property on a long-term basis and subletting it to guests on a short-term basis. The entire idea for Airbnb actually started out this way! Two Airbnb co-founders needed cash to afford the rent of their apartment in San Francisco, so they decided to rent out air mattresses to conference participants in the city.
To get started with Airbnb rental arbitrage, you need to find a home with a sizable difference between your potential STR income and monthly rent, get landlord approval, and ensure that local regulations do not prohibit this activity. Once you've located a good property and signed a rental agreement with the landlord, all you need to do is to furnish and decorate the place (unless it's already furnished) before listing it on booking platforms.
The key to success in the short-term rental arbitrage business is to locate a property that can earn significantly more income when rented out on a daily basis than when rented out monthly. This means that you need to have access to vacation rental data analytics tools to be able to find Airbnb occupancy rates and average daily rates (ADR) in the local market for accurate revenue estimates. Other than that, you need minimum initial capital, which makes this strategy a good option to get into Airbnb for beginner investors.
The pros of Airbnb arbitrage include:
- No need to buy and own a property
- Minimum initial investment
- Easy way to get into Airbnb hosting
- No long-term commitment
- Potential for strong revenue
- Quick scalability
The cons of Airbnb rental arbitrage are:
- Potential legal restrictions
- Problems with the landlord if anything goes south with their property
- Limited property improvements to boost performance
- No long-term real estate appreciation
Considering the requirements of Airbnb arbitrage as well as the advantages and disadvantages, this could be a good opportunity for beginner investors with limited budgets who want to get a flavor of the short-term rental business before committing to property ownership.
2. Manage Airbnb rental properties: Best for non-owners
Another great way to benefit in the vacation rental industry without purchasing a property is to start an Airbnb management business. Professionally managing short-term rentals means that you take over most–or all–responsibilities of the host to allow them to make passive Airbnb income. In exchange, you receive a percentage of the monthly revenue as well as some additional fees.
To become a short-term rental property manager, at a minimum, you'll need to:
- Learn about the local STR industry
- Decide on your business model and market(s)
- Check if you need a real estate license in the area and get one if so
- Build a team of contractors and staff
- Register your business
- Set up property management fees
- Start marketing your business to potential clients
- Choose between launching a half-service or full-service Airbnb management company based on your skills, team, and target customers
The success of a vacation rental property manager depends largely on the composition of their team, access to powerful STR management tools, marketing strategy, and lead conversion and retention plans.
The cost of becoming an Airbnb manager can vary, based on whether you need a real estate license, your portfolio services, and your market coverage. To keep initial costs at bay, opt in for a remote working model, hiring a part-time, freelance team, and outsourcing services such as cleaning and restocking.
The pros of becoming an Airbnb manager include:
- Property-free Airbnb income
- Low startup capital
- Flexible business model and market coverage
- Being your own boss
- Business growth potential by onboarding new properties
The cons of managing Airbnb properties include:
- Around-the-clock working hours
- Tough competition
- Income seasonality
- Need to continuously meet and exceed owner and guest expectations
- Intensifying Airbnb laws in some markets
All in all, managing other people's Airbnb properties is the best option to make money from short-term rentals for those with some experience in the hospitality industry, strong interpersonal and managerial skills, and no desire to go through the investment property purchase and ownership process.
3. Generate more Airbnb property leads: Best for existing property managers
The next idea on how to make money from Airbnb is related to the previous one. If you already manage properties for owners, you have to continuously work on getting new property management leads as the only way to grow your business is to add more and more properties to your portfolio.
There are multiple proven strategies to generate leads for your Airbnb management business such as running a referral program, buying leads, networking, building a website, using social media, and more. You can also resort to more creative marketing ideas for property management professionals like partnering with vacation rental investment platforms, reaching out to your customer base, using TikTok and Reddit, and hosting webinars, among others.
However, the best way to generate high-quality leads ready to convert is to put your business growth strategy on autopilot with SummerOS. Our all-in-one platform made by property managers for property managers has all the tools that you need to find new leads, convert them, and retain them by maximizing the performance of their properties. Powered by accurate, actionable data-based insights, SummerOS is the only platform you need to manage smarter and expand your business faster.
The pros of boosting your Airbnb property management lead generation strategy are:
- Increased income
- Decreased seasonality impact
- Larger team
- More diverse portfolio
- Enhanced local and national brand awareness and reputation
The cons of generating more property leads include:
- Need for bulletproof marketing and lead generation strategy
- Need to streamline operations
- Need to manage your team more efficiently
Expanding your customer base via new leads is the best approach for new and experienced Airbnb managers who are not afraid of growing their business and who have access to the right tools to nurture, convert, and retain leads.
4. Start an Airbnb concierge services business: Best for hospitality professionals
Yet another way to start generating income from Airbnb, similar to launching a property management company, is to start your own Airbnb concierge services business. This refers to offering special services tailored to the needs of high-end guests. Concierge services include professional cleaning, supply restocking, in-person check-ins and check-outs, drycleaning and ironing, meal preparations, hosting experiences, organizing local tours, and others. Typically, concierge services are hired by Airbnb hosts or property managers to deliver superior experiences to their guests.
Getting started with this business requires receiving training in hospitality, learning about the local market, building a team of professionals, checking whether you might need a license, legally registering your business, and marketing your company and services.
The degree of success is determined by your understanding of the hospitality industry and expectations of local high-end guests, the quality and professionalism of your team members, your scope of services, market coverage, and ability to generate and convert leads (Airbnb property owners and managers).
The pros of running an Airbnb concierge business are:
- Access to a niche business within the Airbnb industry
- Flexible services
- Owning your own business
- Unlimited opportunities to grow by adding new services and onboarding new clients
The cons of offering Airbnb concierge services include:
- Very active and demanding business
- Very little off times
- Need for hospitality expertise
- No long-term capital appreciation (due to no property ownership)
Running an Airbnb concierge services company could work out for experts in the hospitality business with active personalities and the talent to serve guests and visitors.
5. Make smarter investment decisions: Best for beginner investors
For those considering the possibility of buying an investment property as their entry into the profitable Airbnb business, making smart investment decisions is at the core of boosting STR income. The smartest real estate investment moves are those based on solid data for identifying the top locations and finding Airbnb properties for sale with strong revenue and profit potential.
How much money you can make as an Airbnb investor depends first and foremost on the market where you invest and the property that you purchase. There are numerous qualitative and quantitative considerations that go into smart investment decisions, such as demand and supply forces, legislative environment, optimal property type, average daily rates, prevailing occupancy rates, income potential, and expected ROI. To forecast the performance of a specific property in a certain location, investors need access to reliable Airbnb data and analytics software tools.
The most efficient way to find short-term rental properties with proven value and performance is to use Summer Forecast. Our platform offers intuitive and actionable data and insights that help you research markets and analyze potential properties in order to outsmart the STR market.
The pros of making data-backed Airbnb investment decisions include:
- Ability to find the best markets and investment properties for sale
- Optimized Airbnb income and profit
- Ability to build your investment portfolio over time
- Making money from Airbnb in the long term through appreciation
The cons of making data-based Airbnb decisions are:
- Need to find the right Airbnb data tools for accurate forecasting
- Relatively large initial budget to cover the down payment on a property
- Operating costs related to owning an investment property and running an Airbnb business
Making smarter investment decisions based on solid Airbnb data software is the best way to make money from short-term rentals for beginner investors with limited knowledge of local markets and opportunities.
6. Buy an Airbnb portfolio: Best for experienced investors
Another less conventional way of making money from Airbnb is to purchase an entire Airbnb portfolio for sale. Unlike the more traditional approach of buying a single investment property to list on Airbnb and other booking sites, this strategy entails investing in a whole portfolio that has been constructed by another investor.
To invest in a portfolio of short-term rental properties, you need to have access to ample cash–or excellent financing options–as well as the skills and network to find available opportunities. As this is a major investment that requires significant capital, it's absolutely crucial to evaluate all possible aspects of the deal and accurately forecast individual property and entire portfolio performance before committing to a purchase.
The pros of buying an Airbnb portfolio are:
- Quick growth
- Airbnb passive income (by hiring professional managers)
- Economies of scale
- Discounted management fees
- Investment risk distribution and mitigation
- Less seasonality effect on revenue
- Diverse exit strategies
- Long-term appreciation
The cons of investing in a portfolio of Airbnb properties include:
- Major initial capital requirements
- Limited financing methods
- Crucial importance of making smart investment decisions
- Limited options to sell
Buying an Airbnb portfolio as an income generation strategy is a viable option for experienced investors with access to readily available cash or tailored financing options.
7. Host experiences: Best for existing hosts
A creative way to make more money from your Airbnb property is to offer experiences. While guest interest in Airbnb experiences is growing, supply from hosts is generally lagging behind, mostly because many hosts underestimate the potential of this simple trick. Airbnb experiences are as diverse as it gets, ranging from local tours, discounted access to tourist attractions, and cooking classes, all the way to wine or cheese tasting, scuba diving, and ski lessons, and anything in between. Experiences can be delivered by the host themselves (provided that they have the skills and the time) or in collaboration with local small businesses or entrepreneurs.
To successfully launch an experience from your Airbnb listing, it's important to study the local market to understand what opportunities are demanded by visitors and what unique activities make the area so special. Next, you have to decide whether the experience is something that you can provide yourself or you need to find a local vendor to help. Finally, you need to add the experience to your listing and start marketing it along with your STR property.
The pros of offering Airbnb experiences are:
- Increased income potential from a property you already own and rent
- Possibility to capitalize on personal skills and talents
- Opportunity to cooperate with the local community
- Additional passive income (if outsourced)
The cons of hosting Airbnb experiences include:
- Higher operating costs
- Increased liability with some experiences
- More work managing experiences
In general, this strategy is the best fit for hosts who are already running a profitable Airbnb business and are looking for a way to further boost their revenue.
8. Cut down on expenses: Best for hosts running out of options
Another way to make more money from Airbnb is to simply limit your operating expenses. After all, Airbnb cash flow is the result of income and costs, so if you're facing trouble in growing revenue, you can try by cutting down expenses. Of course, it's best to work on the two strategies simultaneously for optimal results.
To decrease the cost associated with managing your short-term rental property or business, analyze all recurring and one-time expenses, find out their source, and evaluate their importance to the business. While some costs are absolutely indispensable for offering high-quality services to guests, others might be lowered without a major impact on the performance of your property.
Some proven ways to cut down Airbnb management expenses are resorting to automation tools (like dynamic pricing and Airbnb channel managers), installing energy-efficient solutions, opting for in-bulk supply discounts, and switching Airbnb management companies.
The pros of minimizing your Airbnb business expenses include:
- Possibility to boost Airbnb income without extra upfront costs
- Optimized business performance
- Increased profitability
The cons of cutting down operating costs comprise:
- Risk of lowering the quality of services to guests
- More active work required by the owner/host
Taking into account what goes into cutting down your operating expenses, this strategy should be applied in combination with other Airbnb income generation methods to boost results or when property owners or managers have tried everything else with no success.
9. Benefit from Airbnb management tools: Best for DIY hosts
One of the absolutely best ways to make as much money as possible from Airbnb–for both owners and property managers–is to use Airbnb management software. Vacation rental software is a rather wide concept that can apply to many different tech-based tools including but not limited to property management systems (PMS), data and analytics, marketing, communication, lead management, calendar and reservation management, revenue management, accounting, and other tools.
To maximize the positive impact of introducing short-term rental management software to your operations, define the exact tools that you need (based on the strengths and weaknesses of your current business model) and find the best tools available on the market. The top software platform will help you streamline and automate processes while boosting results and helping you make more money from your Airbnb property/properties than ever before. You can improve listings with a channel manager, optimize daily rates with dynamic pricing, increase occupancy by accelerating guest communication, and decrease costs by coordinating your tasks and team more efficiently.
SummerOS is the best and most comprehensive vacation rental management software platform developed by property managers to address all pain points faced by STR operators.
The pros of using Airbnb software tools are:
- Easier operations
- Boosted Airbnb revenue and optimized expenses
- More scalable portfolio growth
The cons of utilizing Airbnb management software include:
- Risk of using poor-quality Airbnb data in your decisions
- Risk of over-relying on technology and losing the human touch necessary in hospitality
All in all, introducing the right Airbnb property management software is the best option for hosts who are managing their properties on their own and for professional property managers who are currently growing their business and expanding into new markets.
10. Buy Airbnb stocks: Best for passive investments
Finally, you can make money from Airbnb by investing in the company stock. Airbnb was first listed for public trading on the NASDAQ stock exchange in 2020 via an initial public offering (IPO). Investors can buy and sell Airbnb shares just like the shares of any other publicly-listed company as long as they have a brokerage account.
To decide if investing in Airbnb makes sense, consider the financials of the company. In 2024, Airbnb had a market capitalization of $82.12 billion, which is still short of the peak which the company achieved in 2021, at $105.78 billion. In terms of revenue, Airbnb generated $9.9 billion in 2023, a 19.2% year-on-year increase from 2022.
While trading with Airbnb stock carries the same innate risk as other stock investments, there is also a strong potential for dividend payments and long-term appreciation considering historical performance and forecasts about the future of the short-term rental industry.
The pros of investing in Airbnb shares include:
- Regular Airbnb passive income
- No need to worry about asset management
- Access to liquid assets
- Strong potential for capital growth
The cons of buying Airbnb stocks are:
- No control over profit
- Increasing competition from other listing platforms
- Potential industry downturn as a result of tightening legal regulations
In general, making money by investing in Airbnb stock is the best option for non-real estate investors looking for opportunities to diversify their stock portfolio with shares of a promising company.
Bottom line
The sky's the limit when it comes to ways to make money from Airbnb, and these are the best strategies to do that for different types of investors and property managers. If you want to avoid property ownership, you can get started with Airbnb arbitrage or launch a property management company. You can boost your cash flow by hosting experiences or cutting down on expenses.
Whether you invest in Airbnb properties or manage them, you need to base your decisions on powerful data and use the top forecasting tools to grow your revenue. Summer Forecast is your go-to Airbnb data and analytics platform to help you find the best markets, identify the top opportunities, and optimize the performance of existing properties.
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