The Average Airbnb Income: How Much Can Hosts Really Make?

When Airbnb first hit the scene in 2008, who would've thought this home-sharing platform would turn into a multi-billion dollar industry? In 2023 alone, Airbnb hosts earned a whopping $57 billion by renting out their spaces to travelers. That's a staggering amount of money from opening up homes and spaces to guests.

But the reality is, not every host is pulling in millions. The income an Airbnb host makes can vary wildly based on a ton of different factors. So, if you're thinking of becoming a host or just want to boost your earnings, you're probably wondering — what really impacts how much cash you can make on Airbnb?

We'll break down the areas that affect an Airbnb host's income potential, from location and property type to pricing strategies and delivering amazing guest experiences. Plus, get actionable insights to maximize your profitability and help you make the most money possible.

Airbnb host income potential

Many prospective hosts wonder how much they can actually make through the platform. While there's no single answer, estimates suggest the average annual earnings for U.S. hosts are around $14,000 based on recent data. However, earnings can vary dramatically depending on a number of elements such as location, property type, expenses, and more.

The basics of Airbnb hosting

Airbnb hosting involves renting out either your entire property or just a portion of it to short-term guests. Hosts create a listing on the Airbnb platform detailing the property, amenities, and house rules. They set a nightly rate and manage bookings through the Airbnb website or app.

Hosting can be a way to earn extra income, but it also involves responsibilities such as cleaning, communication, and managing guest expectations. It's a much more active form of real estate investing than traditional long-term rentals.

Airbnb hosts range from people who rent out a spare bedroom to hosts who own multiple properties and run a full investment business around their short-term rentals.

Variables affecting income potential

There are many different aspects of hosting on Airbnb that impact your earning potential, including:

Location

Location is a major factor impacting a host's earning potential. An Airbnb property in rural Indiana, for instance, will not have the same income potential as a beachfront property in San Diego. It all comes down to demand and desirability.

Properties located in hot tourist destinations tend to command higher nightly rates and stay booked more consistently. Airbnb rentals close to major attractions like historical sites and natural wonders or within walking distance of restaurants and nightlife drive up demand and pricing.

Being located in a major city with a thriving business travel market like San Francisco or Chicago can also provide a steady stream of bookings and strong earnings.

Seasonality

Beach towns and ski resort areas see major demand spikes during peak seasons, while bookings can be very slow the rest of the year. Weather plays a big role in revenue for an Airbnb host as well. For example, in 2024, the average per-night listing in San Francisco is $394, compared to $156 in New York City. Despite both being major business and tourism hubs, San Francisco experiences milder year-round weather and fewer dips in seasonality.

Property type

Airbnb hosts can list a wide range of properties on the platform, from a private room in their house to an entire property. This range in property types impacts the amount you can make, since listings for whole properties typically capture higher rates. Higher-end properties that can accommodate several Airbnb guests also tend to have higher nightly rates.

The features and amenities of a property also impact its rental income. Properties with amenities like a pool, hot tub, or gourmet kitchen will attract higher rates. Due to their novelty and charm, unique or themed properties, such as treehouses, cabins, or historic homes, can also draw premium prices.

Pricing

Just like with long-term rentals, the rates you set directly impact your rental income as an Airbnb host. Pricing is dynamic since guests check in and out constantly. Your rate can fluctuate based on the day of the week, local events, and other market conditions.

Hosts have a tough job here. They need to choose a nightly price to make as much revenue as possible while remaining competitive to keep their occupancy rates high. Keeping on top of these changing rates can be a lot to manage, so many hosts use dynamic pricing tools to choose the best nightly rates for their property and situation.

Besides booking revenue, Airbnb hosts make money through other fees and services such as:

• Cleaning fee: An additional charge to cover the cost of cleaning the property between guest stays.
• Pet fee: A fee for guests who bring pets, which can cover extra cleaning or potential damage.
• Ancillary services: Offering extra services such as airport pickup, guided tours, meal preparation, or equipment rentals like bikes or kayaks can provide additional income streams.
• Late check-out/early check-in fee: Airbnb hosts might charge for flexible check-in or check-out times to cater to guest needs.

Occupancy

Airbnb host income is also related to the property's average occupancy rate. This metric measures the percentage of days your property is booked compared to the days it's available. The higher your occupancy rate, the more income you generate.

Occupancy rates rely on many factors like the ones above, as well as:

• Guest reviews: Positive feedback from previous guests enhances your property’s reputation, encouraging new bookings. High ratings and glowing reviews can increase occupancy rates.
• Marketing: Hosts that promote their Airbnb listings through social media, listing sites, and local advertising can increase visibility and attract more guests.
• Host responsiveness: Quick and helpful communication with potential and current guests can improve your occupancy rate. Speedy responses to inquiries and addressing concerns as soon as possible persuade guests to book your property and leave positive reviews.

Expenses

The operating expenses associated with your property also impact how much you can make. If you buy your property with cash, live in an area with low property taxes, and handle all the management yourself, you'll make more as an Airbnb host than someone with higher expenses in these areas.

The various expenses involved include:

• Mortgage payments: Monthly payments on any loan taken to purchase the property.
• Property taxes: Annual taxes based on the assessed value of your property.
• Insurance: Property insurance and any additional coverage for short-term rentals.
• Utilities: Electricity, water, gas, internet, and other essential services.
• Maintenance and repairs: Regular upkeep and unexpected repairs to keep the property in good condition.
• Cleaning fees: Costs for professional cleaning services between guest stays.
• Supplies: Toiletries, linens, kitchen essentials, and other items to keep your property stocked and guest-ready.
• Marketing and advertising: Expenses to promote your listing and attract more guests.
• Management fees: Fees paid if you hire a property manager to handle bookings, guest communication, and maintenance.
• Platform fees: Charges by Airbnb for using their platform, usually a percentage of each booking.

Competition

There are over 5 million hosts on Airbnb. While not all of these hosts are actively hosting guests, and many target different market segments, that's still a lot of competition. States like Hawaii have the highest Airbnb density per resident, which increases competition for potential guests.

The amount of Airbnb properties in your city greatly impacts your revenue. High competition can force you to charge lower rates or result in vacancies, even during prime seasons.

Regulations

The growth of Airbnb properties, coupled with housing affordability challenges in some cities, has led to increasing regulations that impact how much the average Airbnb host can make. For example, cities like Scottsdale, Arizona, have passed regulations requiring each property hosting guests for less than 30 days to buy and maintain a license.

Airbnb hosts in communities with homeowners associations (HOAs) may also face restrictions. These could include limits on rental timeframes, noise ordinances, or other rules designed to maintain community standards.

Regulations can vary widely by location and might include:

• Licensing requirements: Many cities now require short-term rental properties to be licensed, which often involves fees and following specific standards.
• Zoning laws: Some areas restrict where Airbnb rentals can operate, limiting them to certain zones or banning them in residential neighborhoods.
• Occupancy limits: Local laws may set maximum occupancy limits, affecting the number of Airbnb guests you can host at one time.
• Taxation: Airbnb hosts might be required to collect and remit occupancy taxes, similar to those paid by hotels, which can impact overall profitability.
• Safety and health standards: Regulations may mandate safety measures such as smoke detectors, fire extinguishers, and regular property inspections.
• Minimum stay requirements: Some cities enforce minimum stay rules, such as requiring Airbnb rentals to be for at least a few days, to discourage high guest turnover.
• Reporting and compliance: Airbnb hosts might need to regularly report occupancy and income to local authorities to confirm compliance with regulations.

Airbnb host experience

Your experience as a host also plays a role in how much you can earn on Airbnb. Data from Q3 2022 shows that Airbnb Superhosts made 64% more than the average host without this status. Superhosts are those who have earned a special designation from Airbnb for providing exceptional hospitality, maintaining high ratings, and consistently receiving positive guest reviews.

This status boosts your visibility on Airbnb, making your listing more attractive to potential guests. As a result, Superhosts have higher occupancy rates and can charge premium prices.

Increasing Airbnb profit

For prospective hosts or existing Airbnb hosts, there are things you can do to increase your income potential, such as:

Choose the right property

If you're looking to become an Airbnb host, start by choosing the right property. If you plan on renting a room in your existing property, then this doesn't apply, but if you're about to invest in a new property, take time to conduct market research so that you can maximize your profit potential.

Use the factors listed above to find a profitable property and location. You can leverage Airbnb's platform to research competition or tools like Mashvisor and AirDNA to determine rental rates and options. Also, be sure to contact representatives in the property's local jurisdiction and any HOAs to understand any regulations you'll need to follow.

Optimize your listing

With so many Airbnb listings competing in the same market, optimizing your property profile is a way to increase your potential earnings. There are several components to having a strong listing, including:

• High-quality photos: Invest in professional photography to showcase your property in the best way possible. High-quality images that highlight the best features of your rental increase your listing’s appeal.
• Compelling description: Write a detailed and engaging description of your property. Highlight key features, nearby attractions, and unique aspects that make your listing stand out. Use descriptive language to paint a picture for potential guests, but be sure that your description is honest and accurate.
• Accurate amenities: Make sure to list all the amenities your property offers. This includes basics like Wi-Fi, heating, air conditioning, and parking, as well as any bonus amenities like a pool, hot tub, or outdoor space. It's also a good idea to check other listings to see which are the most common amenities for your location and add them to your rental if possible.
• Regular updates: Keep your listing updated with current information and up-to-date photos. Regular updates show potential guests that you maintain your property and care about their experience.

Enhance guests' experience

The more positive reviews you have, the greater the chance guests choose your rental over similar properties. Being an Airbnb host means you are in the hospitality industry, so take note of things hotels have been doing for years:

• Cleanliness: Cleanliness is a top priority for guests, so Airbnb hosts should hire professional cleaners if necessary to maintain high standards.
• Comfortable amenities: Provide comfortable bedding, quality towels, and essential toiletries. Little touches like extra blankets, pillows, and a stocked kitchen can make a big difference.
• Local information: Provide a guidebook with information about local attractions, restaurants, and transportation options. Personalized recommendations can enhance your guests' stay.
• Availability: Be available to address any issues or concerns quickly. Providing a contact number or messaging through the Airbnb app shows guests you care about their experience.
• Consistent communication: Keep guests updated with instructions for check-in and check-out and any house rules. Timely and friendly communication can prevent misunderstandings.
• Maintenance and upkeep: Airbnb hosts should regularly check and maintain your property to confirm everything is in working order. Quickly address any maintenance issues to prevent guest dissatisfaction.
• Safety and security: Make sure your property is safe with working smoke detectors, fire extinguishers, and secure locks. Safety features give Airbnb guests peace of mind.

Manage operating expenses

No matter how high your occupancy rate is, if your expenses eat into your revenue, you won't make very much as an Airbnb host. Managing your expenses helps hosts keep more of their bookings revenue. Property management software like Azibo can help you manage these costs and increase profit potential in the following ways:

• Self-manage: Azibo can help you self-manage your properties, eliminating property management costs that can take a huge chunk out of your profit. This comprehensive platform allows you to collect rent, manage maintenance, and track your finances. Automated expense tracking and financial reporting make it easy to stay on top of your finances.
• Regular maintenance: Conduct regular maintenance to prevent costly repairs down the line. This includes routine checks on plumbing, HVAC systems, and electrical systems. Azibo's maintenance tracking helps you monitor the status of each property. Preventive maintenance can extend the lifespan of your property’s systems and appliances, saving you money in the long run.
• Expense tracking: Use Azibo's accounting features to regularly monitor your expenses and understand where your money is going. This includes utilities, repairs, cleaning fees, supplies, and other recurring costs. Keeping detailed records helps you identify areas where you can cut costs or optimize spending.

How much do Airbnb hosts make?

Airbnb hosting presents a profitable opportunity, but making the most money possible depends on many factors. Choosing the right property, delivering standout guest experiences, and several other variables influence a host's bottom line.

Earning high profits as an Airbnb host requires ongoing effort, and regularly improving and fine-tuning every facet of the hosting experience can really pay off. From properly maintaining the property to addressing guest issues swiftly, these details boost a host's reputation and income.

In this competitive market, hosts who go above and beyond while staying flexible to changing conditions will make the most money. Airbnb hosting demands ongoing hard work, and those willing to put in the effort to constantly evaluate strategies will see their profits rise.

Airbnb average income FAQs

How much money do I need to run an Airbnb?

The amount of money needed to run an Airbnb varies based on location, property type, and amenities. Generally, you'll need funds for initial setup like furnishing costs, ongoing expenses and contingency funds for unexpected costs. A rough estimate is $3,000 to $10,000 to start, plus monthly operating expenses, not including the property purchase.

Does Airbnb make more than renting?

Airbnb can potentially make more than traditional renting, but it depends on factors like location, occupancy rate, property type, and management costs. Short-term rentals often generate higher nightly rates but require more active management and can have variable income. Traditional renting provides stable, consistent income with less effort.

What percent does Airbnb take from a host?

Airbnb typically takes a service fee of around 3% from hosts for each booking. This fee can vary slightly depending on the cancellation policy you choose and other factors.