In modern times, people are looking to rent Airbnb properties more often than traditional hotels. Though it may seem easy enough, Airbnb rentals may be more complicated than it appears.

Table of Contents

  1. What is Airbnb?
  2. How It Works
  3. How Does Airbnb Make Money?
  4. How to Rent Out Airbnb Without Owning Property
  5. ​​Pros and Cons of Hosting on Airbnb
  6. Steps to Finding a Profitable Airbnb Property
  7. Recap

In this article, we will look at how to rent a vacation property on Airbnb, along with the rules and regulations that come along with it. Then, we will look at useful ways for investors to find and list their own profitable Airbnb property.

What Is Airbnb?

Airbnb is one of several online platforms available for users looking to find short term vacation rental properties. To do so, the website lets people with properties list them on the platform and then connect them to people looking to rent their Airbnb.

The Airbnb website pretty much allows any available space to be listed. It can be an entire home for rent or just a spare room. It makes it easy for the people listing their properties to make a profit, as there are no strict requirements on what can be considered an Airbnb.

The most common types of properties seen for rent Airbnb are houses, condos, apartments, and even some hotels. As they essentially allow any available space to qualify as an Airbnb, users can find any type of property they are looking for.

How It Works

Airbnb works in different ways, depending on what you are using the platform for. If you are looking to list a vacation rental property on the site, you need to create an account in order to list your property. You also need to make sure your listing comes with all of the required licenses for that location so it will be legal to operate.

If you are looking to rent Airbnb properties, you also need to make an account. Then, you use filters to search through other listings available in your desired location. Some examples of search filters offered are for types of properties, such as Airbnb homes for rent. You also need to select the chosen dates for your trip.

There are some additional filters users looking to rent Airbnb must use, as well. They include how many guests will be occupying the property, as well as if they are bringing pets. It also is a good idea to factor in your budget when searching through available listings. It will make it easy to find vocational rentals at your price point.

Once you’ve selected an Airbnb you are interested in renting, you submit your request to the host. They have 24 hours to accept or reject your booking request. After the request is accepted, you will have the property reserved during your desired period. If the host doesn’t respond within 24 hours, the site also automatically accepts the reservation.

If you have any questions regarding a specific property, you can reach out to the host.

Related: How to Conduct a Thorough Airbnb Investment Analysis

How Old Do You Have to Be to Rent an Airbnb

At the very minimum, users must be at least 18 years old to rent on the Airbnb platform. They include people looking to travel in groups, as a pair, or as solo travelers. Though the minimum age is 18, and most properties go by the said rule, some property owners may ask for your age to be higher to rent their specific Airbnb.

It is always a good idea to reach out to the host for any additional Airbnb requirements to rent.

The same rule also applies to hosts. To list a short term vacation rental on Airbnb, you must be at least 18 years old.

How Does Airbnb Make Money?

People looking to list their property on the platform may be curious how the Airbnb business makes money. In short, Airbnb makes money, like other successful travel businesses, through a shared economy. It basically means they generate an income from renting vacation properties they don’t directly own.

If you rent Airbnb and the reservation is accepted, the platform takes a percentage of that profit. Their profit consists of a few different fees, which users will see when they book a listing. The first is a service fee, which is the cost of using the website to find a vacation rental. The service fee accounts for most of the site’s profits.

On average, users booking through Airbnb are charged about 14% as a service fee for the booking. The rate can fluctuate depending on how long you stay at a location and how expensive it is. Additionally, Airbnb makes money from its hosts. If you are hosting, you will be charged about a 3% fee of your total earnings.

Overall, Airbnb generates a profit from both the hosts and the users.

How to Rent Out Airbnb Without Owning the Property

You do not need to own an Airbnb property directly to create a listing on the site. Though some might be wondering how it is possible, the simple answer is being a property manager. Property managers are hired by the owners of rental properties to manage everything regarding the hosting process.

The tasks of a property manager include:

  • Creating listings
  • Managing the property itself
  • Confirming and rejecting bookings
  • Communicating with guests
  • Organizing and maintaining the property
  • Marketing the listing

As property avengers are in charge of all of the above tasks, they are the ones who handle creating the Airbnb listing. They do it because they know the property best. So, if you are looking to get involved with real estate investing without directly owning a rental, you can become a property manager.

Related: Airbnb Rental Arbitrage: The Complete Guide

Pros and Cons of Hosting on Airbnb

Just like every real estate website, there are some pros and cons that must be considered before using the platform.

Pros

Below are some of the most common benefits of Airbnb hosting:

1. Free Listings

As an Airbnb host, you do not need to pay a fee for listing an Airbnb rent property on the website. You only pay them once your listing gets booked. Then, you are changed about a 3% fee on your total profits.

2. You Determine Your Own Price

The platform itself has no say in how much you can charge for your vacation rental property. You are able to determine what you want to charge by the night, week, or month.

3. Airbnb Offers Protection

Airbnb not only offers a protection program for guests but their hosts as well. The platform offers up to $1,000,000 for damages caused by guests during the duration of their stay. Though the protection plan doesn’t cost extra for hosts to get involved, the plan does not cover everything. It only accounts for unreasonable damage.

Cons

Along with the benefits, hosting an Airbnb comes with a few drawbacks, such as:

1. Potential Damage to Your Property

Though Airbnb does offer a protection plan, as mentioned above, it does not cover all damages to properties. Some things not included in the plan are if a guest steals cash, jewelry, artwork, or pets from the rental. Minor or inconvenient damages are also not covered. Hosting an Airbnb always comes with the risk of damage.

2. Taxes

Hosting on Airbnb may be subject to additional taxes you are not prepared for initially. It would be the value-added tax (VAT). Additionally, you could be subject to rental income taxes. Always do your research before hosting any property to be prepared for hidden fees that could impact your overall income.

3. Airbnb Is Not Legal Everywhere

When hosting an Airbnb, always make sure short term vacation rentals are legal in your location. Additionally, make sure to obtain all of the property licenses needed to operate an Airbnb business. If you fail to do so, your Airbnb won’t be considered legal and will be subject to fines and closing down.

Steps to Finding a Profitable Airbnb Property

If you are interested in getting into real estate investing, you need to find a property that will generate a high return on investment. You can search through available property listings to find one that looks appealing, though you may not be able to tell how profitable it will be.

To help with finding a profitable Airbnb property, use Mashvisor.

Mashvisor is a platform to help investors locate an investment property. We offer many tools and services that help you locate a high-earning rent Airbnb. We use up-to-date real estate trends to generate our data that helps you find the best properties in any area in the US.

Below are some of the best tools we offer for locating the most profitable short term vacation rental properties:

Property Finder

If you are struggling to find available properties, we recommend using our Property Finder tool. The tool is perfect for locating investment properties that fit your every want and need. We offer filters to easily search through listings. It helps make sure you are only looking at properties that work for you.

Below are some search filters offered:

  • Property type
  • Budget
  • Location ( you can search multiple locations at once)
  • Rental strategy (in this case, rent Airbnb)
  • Number of bedrooms
  • Number of bathrooms

Real Estate Heatmap

One of our next most useful tools for locating a profitable rent Airbnb is our Real Estate Heatmap. The tool is used to conduct a neighborhood analysis to filter through areas that may be more profitable than the others. Though you might have a certain state you want to invest in, the heatmap tool helps to find the best neighborhoods.

To determine which neighborhood will be profitable, we rely on real estate data and metrics. Some of the best metrics to look at are cash on cash return, cap rate, and Airbnb occupancy rate. They ensure your neighborhood will produce a profitable Airbnb property.

Related: Airbnb Rentals: FInding Income Properties Using a Heatmap

How Rent Airbnb Works: Mashvisor's Real Estate Heatmap

Mashvisor’s Real Estate Heatmap allows investors to find the best neighborhoods for property investments.

Investment Property Calculator

Once you’ve found a good neighborhood and a vacation rental in your preferred neighborhood, we suggest using our Investment Property Calculator to check how profitable your specific location will be.

Essentially, the tool conducts an Airbnb analysis to see how your listing will perform in the area. Part of making good investment decisions in real estate investing is ensuring your data looks good before listing a property. It is what our Airbnb calculator does.

Let’s say you’ve rented out an apartment as an Airbnb. With the income calculator, you can plug in all your data regarding your Airbnb and let the tool do the rest. It works for both any kind of traditional or Airbnb property.

The tool first provides you with pre-calculated real estate data for your property, such as:

  • Property tax
  • Maintenance and repair fees
  • Interest rate

Afterward, the tool provides a comprehensive rental strategy. It basically compares your Airbnb listing to if it were a traditional rental. The comparison helps you to make the best management decisions for your listing. To determine which will perform better, we compare:

  • Cap rate
  • Cash on cash return
  • Airbnb rental income
  • Airbnb occupancy rate

Our Airbnb profitability calculator is best for ensuring your investment property will generate a profit.

Recap

In this article, we looked at what rent Airbnb is and how to use the platform. The Airbnb platform is used by hosts to list their short term vacation rentals and by guests to rent Airbnbs. Airbnb might be good for people who already have investment properties or users looking for a place to stay. But what about finding profitable Airbnb properties?

To find the best Airbnb properties that will generate a high return on investment, we recommend using our tools. Mashvisor provides all of the tools investors need to make money in real estate. To get access to our real estate investment tools, click here to sign up for a 7-day free trial of Mashvisor today, followed by 15% off for life.




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