Or at least a bunch. Hosting on Airbnb is the best side hustle out there, pulling in almost double the next option (Lyft). How much you will make in particular is a hard question to answer because each listing is different.
Some markets, like San Francisco, have extremely high listing prices. But those high prices also come with very high costs of living, so your bottom line is reduced.
Other factors matter here as well, such as, how much you owe on the listing property itself, how much the utilities cost you, how much you have to pay other people to help you maintain it. Taxes in your area will also affect your earnings. You gotta pay the man!
Ball Parking Your Earnings
The best way to ballpark how much money you can make hosting on Airbnb is to perform a quick “Scenario Analysis.” We’ll walk you through one of these where we try to figure out how much we can make if we host under the following three scenarios:
- Once in a while = Booked 10 days a month
- Some of the time = Booked 20 days a month
- All of the time = Booked 30 days a month
STEP 1: First calculate how much you will make in each of those situations before taxes or other costs are removed. Say you want to charge $100 a night; with the three scenarios above, that means you can factor a budget where you make $1000, $2000, and $3000 a month.
STEP 2: Now, figure out what your space will cost you per month to maintain. This would include taxes, rent or mortgages on the property, approximate utilities, cleaning fees, etc..
STEP 3: Now that you have your costs, you can determine how much you would profit in each situation, from being barely booked to being completely booked. In our scenarios and costs assumptions, you can see that we lose money if we’re only booked 10 days. We make the most if we are completely booked for 30 days.
As an alternative to Step 3, you can also figure out the minimum number of nights you need to host in order to break even (not lose money or make money). In our scenarios and cost assumption, once you host 13 nights, you start making money.
If you have bought the property, but still owe a mortgage, breaking even might be your goal as you are building equity. But if you are only leasing the property, you will want to make sure your rent isn’t higher than what you’ll make.
“But My Situation is Different”
Of course, it is! The situations are boundless, and the best thing to do is figure out your own personal goal with your listing.
Are you trying to pay your entire mortgage with money from Airbnb? Are you looking to help pay rent? Are you looking to cover your rent completely? These are important questions to answer since they are a driver of whether hosting will help you hit your income target.
There are all different types of situations for listings on Airbnb, each with their own goal. For example:
- A host may lease a 2-bedroom apartment for themselves, living in one room and renting out the other to short-term Airbnb guests. Goal: Use the extra bedroom to completely pay the rent.
- A host may own a second home that they sometimes use. He/She may want to rent it out for the weeks that they aren’t staying there. Goal: Earning extra spending money.
- A host might own a four bedroom home, but only uses one of the bedrooms year-round. He/She might list the other spaces as private rooms. Goal: Help him/her pay the mortgage.
Your circumstances will affect your expenses and earnings goal. But the basis is still the same; profit is always income minus expenses. Do the math above and make sure that the outcome matches your financial goals.
We set a base price above of $100 per night. Your rate is going to change depending on the time of year, the day of the week, the time of the booking etc…
Things that change pricing regularly include:
- Busy Travel Season
- Major Events (i.e. Super Bowl, Olympics, Conferences, Festivals, etc)
Many people will book far in advance for a huge event or celebration, so be aware of what’s coming up in your town far in advance, so that you are not giving up your property for far less than it’s worth.
Whatever price you choose, remember that the better your listing, the more likely you are to get booked. So if you are trying to maximize your renting potential, make sure you have the top things every Airbnb should have.