It sounds like the dream: Furnishing an extra bedroom, throwing a listing up on Airbnb, and watching the money roll in.
More and more Americans have joined the “gig economy” thanks to its promises of making easy money, whenever you have extra time. Roughly a quarter of Americans make money from side gigs, according to a study from Pew. Recent data analysis at Earnest showed that Airbnb has the highest earnings compared to other side-gig platforms. The average Airbnb host brings in more than $900 per month, but most people (likely those hosting less often) bring in about $440.
Becoming an Airbnb host can be an incredibly fun way to earn some extra cash, but it’s not passive income. You have to invest time in keeping your house spotless, writing a guide with activity and dining suggestions for your guests, and making yourself available for your guests’ needs—unless you’re renting out a second home and you’re paying someone else to manage it for you. (And yes, there are companies that do that too.)
I spent a few months as a host when I was a recent college grad with wanderlust and student loan debt, and I loved putting aside money for traveling by sharing my home with new people (some of whom I still stay in touch with through Instagram).
It’s not always easy, though. Sometimes, you get a guest who’s difficult, or needs a lot of attention. You need to keep your calendar updated and respond quickly to requests if you don’t allow instant booking. If you want to make a lot of money, you need to research key travel dates and figure out how to adjust your prices accordingly.
You also have to be mindful of your landlord if you’re a renter yourself and abide by city and state laws if there are any restrictions on short-term rentals where you live. I learned that the hard way, when my city decided to crack down on vacation rentals and my landlord told us to stop. My roommate and I had to cancel quite a few high-paying reservations when we took down our listing abruptly.
Tips from Experienced Hosts
I asked Michael Wurster, a seasoned Chicago-area Airbnb host who now plans to open a hostel, for his best advice on getting started. Wurster, 26, started hosting with his then-girlfriend, now wife, Jade, when a new roommate bailed on moving into a two-bedroom apartment with them after they’d already signed the lease.
At first, they hosted out of need. They wouldn’t have been able to make the rent without the extra money. Now, they do it more for the lifestyle than for the extra income. They charge $35 per night (up from the $25 they charged when they moved to a new apartment and needed good reviews) and make enough each month to cover about a third of their rent and utilities.
- Make sure you know what you’re getting yourself into. “To be successful, it’s important to make sure you’re comfortable with the entire decision,” Wurster says. He was hesitant at first when Jade suggested they rent out their spare bedroom, but then he realized they’d be able to accept guests after first talking with them and checking for verified ID.
- Don’t break your lease, if you’re renting. If you’re not supposed to be leasing out rooms in your house according to your lease, you risk getting in trouble with your landlord and maybe even your local government. Make sure you know local tax laws and that you register with your city or county if mandated by law. Make sure to read Airbnb’s policies for hosts, too. Their $1 million insurance policy has quite a few restrictions.
- Make your space Instagrammable and show off amenities in photos. “Usually when people are doing Airbnb, they’re looking for some sort of personality,” Wurster says. Take pictures of the bedroom and any other spaces available to guests from every angle, and put a bright photo of the bed as the first image on your listing. If you want to cater to a certain type of traveler, make relevant amenities highly visible. For example, Wurster likes hosting business travelers, so there’s a desk in the bedroom and it appears prominently in photos.
- Be honest. Reviews will make and break you, and people want to get what they’re expecting. If you’re offering an air mattress, don’t call it a bed. If you’re offering the living room and all that separates it from the rest of the house is a curtain, be upfront about that. People are willing to put up with a lot if they know what they’re getting into, Wurster says, but “the worst thing anyone can do is surprise a guest with something.” If your guests show up expecting wifi or cable and you don’t have it, you could get negative reviews that could keep other people from booking with you.
- As a first-time host, start off with a dirt-cheap rate. Getting guests without reviews is hard, but not impossible. When Wurster first started hosting, he lowballed every other listing in the area until he got his first few reviews. “We immediately undercut everything in the area by at least $5,” he says. “The first listing we ever put out was $25 per night, which is ridiculous. It was such a steal. We had three guests before we raised it. But those three guests left great reviews because they got a tremendous value.”