Recently, the market cap for Airbnb (ABNB) approached $100 billion, making the unique rental property company the most valuable in its class. Unsurprisingly, the incredible growth—even in the light of the COVID-19 pandemic—has caused property owners of all kinds worldwide to explore the possibility of renting their properties for profit.
Owning and running a vacation rental property can be incredibly profitable. There are countless examples of Airbnb hosts (or hosts on Homeaway, Vrbo, etc.) who pay about $2,000 per month in mortgage payments and can generate upwards of $5,000 in monthly revenue—that means a potential profit margin of more than $36,000 per year, per unit.
These figures only refer to the people who already own an Airbnb property. But even among those that do not, the potential growth of the vacation rental market—especially as we begin to slowly move beyond the pandemic—is still a clear avenue for wealth.
So, is it possible to financially benefit from an Airbnb without actually owning a property? In short, the answer is a resounding yes. In this brief guide, we will discuss a few ways that you can potentially benefit from an Airbnb, regardless of your current status as a rental property owner.
1. Renting a Rental
If you currently live in a rental property (aka you already have a lease for a rental property), there is a good chance that you could use this property to generate some income. Suppose you are not occupying the property at all. In that case, you can likely rent the property to potential guests and make money through a process known as renter arbitrage (renting a property and then renting it out for even more money). But even if you are currently occupying the property, you can still likely rent at least one room for a profit.
Of course, you will want to be sure that you actually have the right to do this. Many rental agreements do not specify whether you can rent part or all of your property to a potential tenant, which usually bodes in your favor. Some leases specifically allow you to rent out the property, making the entire process much easier. And unfortunately, there will be some agreements that ban you from subletting or renting the property as an Airbnb—there might be a few ways around these clauses, but navigating them can indeed be problematic.
Nevertheless, renting a rental is undoubtedly the most straightforward way to make money off of Airbnb without owning the property yourself. And if you live in a high-demand, limited-supply neighborhood or city, you can potentially rent out your property for a pretty penny.
2. Airbnb Experiences
Generally, the Airbnb platform is used to help people find properties to stay at while they are in a different city or town. However, Airbnb has come to realize that many people visiting a new place are also looking for something else: things to do.
Through Airbnb Experiences, you can capitalize off of Airbnb guests without actually owning any properties. There are many different kinds of Airbnb Experiences currently available, ranging from tours around the local area to cooking lessons for regional cuisine and pretty much anything else you can think of. If you have a particular skill or hobby that you are proud of, you can potentially make quite a bit of money–$100 per hour or even more—through Airbnb experiences.
3. Housecleaning and Maintenance
Running an Airbnb property, or any kind of rental property, requires a lot more than just getting people to rent it and moving on. You also need to make sure that the property is in fact livable and ready for the guests. In most cases, this means investing in house cleaning, maintenance, and other related services on a regular basis.
Do you ever wonder where the “cleaning fee” goes when you rent an Airbnb or why you can’t check-in until a specific time? Well, as you’d probably guess, this is because people need to change the sheets, tidy up the property, and do a wide variety of other tasks before the property can be presented to its guests. Though working as a housecleaner or maintenance worker won’t always be as profitable as owning the property itself, you can usually make quite a bit more than you would make doing the same kind of work at comparable properties, such as a hotel.
4. Property Management
Without a doubt, many Airbnb “hosts” simply hope to dump some money and just enjoy the revenues these properties generate over time. And, in a lot of cases, investing in rental properties is really that easy. But these property owners must ensure their properties are effectively managed over time.
There are a lot of different property management tasks that come with owning an Airbnb, such as marketing the property, interacting with the guests, organizing financials (taxes, etc.), and coordinating necessary services (housecleaning, maintenance, etc.). In the most basic Airbnb model, the property owner will do these crucial tasks themselves. But, sometimes, the owner, especially those who own multiple properties, will want someone else to take care of these things, which is where property managers can thrive.
Property management fees range from 5 percent to 12 percent of the monthly revenue. For instance, if an Airbnb property generates $5000 a month in revenue, the property manager can potentially earn up to $600 per month. If you can manage upward of 10 properties, you’d be making at least $6,000 a month.
5. Airbnb Co-Host
In the Airbnb world, a co-host is someone who has been deliberately added to the listing and is usually in charge of taking care of basic guest interactions and other related tasks, such as sending house guides. The co-host is different from the property manager because they act on behalf of the “primary” host while not necessarily needing to take care of other essential responsibilities.
Usually, the co-host is someone that the original host trusts to take care of many, though not all, duties that come with owning an Airbnb. This can include guest communication, managing listing postings, restocking essential supplies, etc. Ideally, a co-host will have a contract with the primary host that clarifies who is responsible for what.
6. Airbnb House Sitting
We’ve made it clear that owning an Airbnb, and managing the property, necessitates a wide variety of ongoing responsibilities. But what about the times when nobody is living there, which, on average, occurs for roughly 120 days over the course of the year?
An Airbnb house sitter is someone who checks in on and otherwise maintains the property when nobody occupies it. The duties of a house sitter can be as simple as “checking in” every now and then but can also include other tasks such as essential maintenance and cleaning, adjusting the climate and security systems, and more. It’s an excellent way for some people to make a little bit of money without being fully committed to property ownership.
Conclusion
Have you noticed the recent growth of the Airbnb market but don’t have a property to get into the vacation rental business? The good news is that you don’t need to personally own a property to make money. Through each of the six options mentioned above, you can generate quite a bit of income, regardless of whether or not you own a rental property.
