How to Become an AirBnB Host: The Ultimate Guide for Beginners in 2020

Updated: May 11, 2020

You have a room or property for rent.


But tenants aren't coming easily.


Perhaps you want to squeeze more money out of your rental property.


Maybe you're a people-person who wants a more exciting and fun way to be a landlord. A way that will occupy your time and give you opportunities to meet people from all over the world.

AirBnB guest having breakfast in bed

If so, you're probably thinking of joining the over 650,000 other AirBnB hosts worldwide and open your doors to guests from all over the world.


You're wondering, how to become an AirBnB host?


It sounds exciting. You've heard of the insane profits some hosts make. You think you've got what it takes to be a good AirBnB host.


But...


You've also heard murmurings of low bookings in recent times.


Stories of horrible guests and experiences have reached you.


AirBnB has been banned in some cities or countries.


To make things worse, you've gone to AirBnB's website and attempted to sign-up as a host but all the options and settings are just plain confusing.


You're in a dilemma.


AirBnB sounds like.the perfect opportunity to make money, meet new people, and show-off your skills as a host but it could also turn into a nightmare.


Now, the million-dollar question:


How do you become an AirBnB host, profitably tap into the estimated US$30 billion market for hosts and at the same time avoid the pitfalls?


Do not fear, this comprehensive guide is going to help you ace this.

Table of Contents


1. Is AirBnB Profitable for Hosts?

2. How to Start Hosting (+ Bonus Video Tutorial)

3. How to Start a Profitable AirBnB Business

4. How to Become an AirBnB Host Without Owning Property

5. 9 Rules for Every First Time AirBnB Host

6. 5 Tips for Making Money with AirBnB

Is AirBnB Profitable for Hosts?


You may love meeting new people and you're probably a great host. But if you're going to be expending your own money, time, and energy towards this, it better be profitable.


Which leads us to this question…


How Much Can You Make as an AirBnB Host?


On average, hosts make about $924 per month. This according to research by Earnest, a financial institution.

Making money as an AirBnB host

The variance is wide though. Because of the number of variables. The size of your house, the services you offer, the location you're in, the segment you're in, and the number of people you can accommodate will influence your revenue.


So, is there a more precise way of estimating your potential revenue instead of relying on a global average? You bet.


AirBnB Calculator: How to Quickly Gauge Your Potential Revenue


AirBnB has a nifty tool that allows you to instantly get an indication of your income potential based on your geographical location and the number of rooms you have. This calculator tool is free.


Head over there now and key in your city or town in the "find out what you can earn" section. You'll see what your monthly income potential is. If it is within your expectations, things are looking good for your hosting career.


Cool Tip: The AirBnB Calculator is a rough estimate. For more accuracy, AirDNA is the best tool. Their paid service provides you with details on occupancy, growth, prices, and more in over 80,000 cities. The data here is invaluable for professional hosts.


How Long Does It Take to Become an AirBnB Host?


Theoretically, you can do it in 3 steps and in under 1.5 hours.

Signing up to become an AirBnB host

There is no tedious approval process you have to go through, no document submissions that you have to make (except to verify your identity) and no physical contracts you have to sign and mail back.


When you sign-up as a host, you will be asked to verify your identity by uploading any form of government identification. That can be done in less than 5 minutes.


The responsibility of complying with all your local laws and regulations lies on you. AirBnB makes this very clear in their Terms of Service (which you automatically agree to by using their service).


How to Start Hosting (+ Bonus Video Tutorial)


You’ve checked your potential income as a host and it looks promising. You’re feeling more confident. You’re telling yourself, “I can do this.”


So, let’s get started!


AirBnB Host Login: Create an Account


Visit AirBnB's host setup page. Click on "Get Started" and you'll be on your way to becoming a host within the next hour. After you’ve registered your email address and password (I don’t recommend using your Facebook or Google Account to sign-in), there are 3 broad steps to getting started as a host.


I'll walk you through every step in the video tutorial below.


Please note that AirBnB regularly updates their interface. Therefore, some variance between the video tutorial and the actual AirBnB website may occur.

That was easy wasn't it? Let's move on.


AirBnB Hosting Fees (Hint: It’s the Cheapest in Town)


What percentage does AirBnB take from hosts?

AirBnB's fee percentage

AirBnB (with some exception) charges the cheapest fee in comparison to other platforms like HomeAway, Agoda (Priceline), Expedia, and Booking.com.


Most of the time, you will be charged 3% of the booking subtotal which includes your nightly rate, cleaning fees, and other guest fees but excludes taxes and AirBnB fees.


You could be charged a little higher if you have a strict cancellation policy or if your listing is in Italy. If your listing is in Mainland China, the hosting fee is 10%.


You can read more on AirBnB's host setup page by clicking "Financials" at the top menu. Onward!


AirBnB Application: Download the App for Your Mobile Phone


If you’ve not already done this, it is an important basic step that you should complete. 


Your response times to inquiries and problems can make a big difference. With the app installed on your smartphone, you will receive notifications every time an inquiry comes in or every time a guest sends messages to you on the platform.


The app is available on Apple Store or Google Play Store.


Let’s move on to the more advanced stuff now.


How to Start a Profitable AirBnB Business


Always strive for profitability and not for the highest occupancy because...


Profitability Eats Occupancy for Breakfast


If the Ritz-Carlton wants 100% occupancy, all they’d have to do is charge $150 a night. There’d be a long queue of guests everyday.

Long queue to check-in

But the Ritz-Carlton wouldn’t do that.


Ponder this:

Is it better to have 30 nights a month booked at a daily rate of $150, or 10 nights a month booked at a daily rate of $1,300?


See what I mean? Profitability should be your strategy, always.


But how do you do that when other hosts are competing on price only?


Create a Perception of Value


Why would someone be willing to pay $1,300 a night at the Ritz-Carlton but balk at having to pay the same at The Trump International? 


It’s not necessarily because the Ritz-Carlton’s rooms are significantly better. It’s simply the perception of value. You can create this perception too.


Make your listing unique. Make it stand out. Make guests feel like they’re getting value for their money.


If you do this properly, you won’t have to compete on price alone.


Make no mistake though, pricing yourself correctly is very important. Let’s talk about this.


How to Setup Your AirBnB Price in 4 Steps


This is how most hosts price themselves; they look at the daily rates of other hosts in the neighborhood and copy. It’s a bad strategy.


Other hosts may be barely breaking even. By following the herd, you could end up losing money. 


A better way to price yourself is to know your costs, then derive your price from there. You can do this in a 4-step process.

How to setup your AirBnB price

#1 Calculate Your Costs and Your Break Even Point


Let's assume that you have an apartment to list on AirBnB with the following costs:


  • Cleaning - $45 per clean

  • Laundry - $15 per reservation

  • Electricity (average estimate) - $250 per month

  • Toiletries - $20 per month

  • Internet - $60 per month

  • Kitchen supplies - $55 per month

  • Mortgage / rent - $2,000 per month


The average AirBnB length of stay is about 3 days. At a 50% occupancy rate per month (15 days), you'll have 5 separate bookings.


Therefore, you'd be spending $225 per month on cleaning ($45 x 5) and $75 per month on laundry ($15 x 3). This brings your total monthly cost to $2,685.


You should always plan to breakeven with a 50% or lower occupancy. So, your daily rate to cover your cost can be calculated as follows:


Cost / # of days occupied

$2,685 / 15 days (50% occupancy) = $179


The next important question is - will guests pay you $179 per night to stay at your AirBnB?


#2 Research Market Prices & Occupancy


With a little bit of research, you'll be able to tell how realistic a daily rate of $179 is.


Let's assume your apartment is a 2-bedroom unit with 2 baths and is located in San Francisco. It also has 3 beds.


Go to AirBnB's main page and search for stays in San Francisco.

Search AirBnB listings

Look at apartments that are similar to yours, use the filters.

How to filter AirBnB search

Select 2 bedrooms, 2 baths and 3 beds.

Filter AirBnB search results

Next, in the map section zoom into the location where your apartment is located. You don't have to zoom in too close. Just tight enough to search within an area that can be considered similar.


Ensure you have the "Search as I move the map" option ticked.

Refine search using the AirBnB map

You'll now see a list of apartments that are similar to yours in the search results. This particular search has yielded 85 results. On the 1st page, the lowest priced listing is $168 and the highest is $565. Most of the listings are between $200 to $300.


$179 appears to be acceptable in this market. In fact, a daily rate of $200 will still be reasonable and can be your default price.


This is a great start because this market is equitable for you. But what if you found that all similar listings to yours were priced below $179?


In this case you have a problem.


The good news is that you can fix this problem. Remember value perception? People will pay your price if they find your offer irresistible. Therefore, if you can create a perception of value for your price, guests would be willing to pay.


Next you need to estimate the occupancy levels in your neighborhood. This is fairly simply to do. Go to a listing’s page and click on the “Check-In” date. A calendar will pop out. The future dates that are struck-off are most probably booked.


Look at how many dates are struck-off for the next 30 days. 

How to gauge occupancy in an area

In the picture above, assuming you’re looking at the calendar on April 21st, you’d count all the dates that are struck-off between April 21st to May 20th (30 days). 


Based on this, you can estimate the occupancy for this listing to be 100% (30/30) for the next 30 days.


You should do this for the first 15 to 20 listings in the search results to get an average. The more listings you include, the more accurate your estimate will be. 


Also, be wary of peak months which can skew your findings.


Let’s assume after doing this for 20 listings, you find the average 30-day occupancy to be 65%. Therefore, with a minimum price of $179 per night, you can be profitable.


Let's look at the next part of your pricing strategy now.


#3 Make an Irresistible Offer


When you setup a listing for the first time, AirBnB will give you the option to give your first 3 guests a 20% discount. Choose this option to make your listing more attractive to prospective guests.

How to give discount to your first 3 guests

Your pricing for your first month should also be low. How low? 10% below the average. Take the first 20 listings (the more the better) in your research above and calculate the average nightly price.


If the average nightly price is $200, you should price yourself 10% below this which is $180.


To price yourself at $180 for the first month only, change your price from the calendar.


To do this:


1. Go to your main calendar

2. Select the desired listing

Change price for particular period in AirBnB

3. Scroll to the desired month

4. Select the dates

5. Turn off Smart Pricing (if it's on)

6. Set your desired price

7. Save