How To Start An Airbnb Business That’s Always Booked

Updated On: November 22, 2022

Ready to indulge yourself in the solopreneur lifestyle? Then an Airbnb business might just be the right choice for you.

Airbnb businesses can be very profitable, but of course, it's all about how you run your own Airbnb business.

Starting an Airbnb business is pretty easy; you can literally kick off your Airbnb business in a few days. However, it's not really about how long it takes you. You just need to make sure that you've crossed all the checkboxes to put your Airbnb business on the path to success

After all, there are probably thousands of other Airbnb hosts in your city trying to attract those guests that you desperately want them to book your property.

In this guide, we'll walk you through the whole process of starting a successful Airbnb business from A to Z. So, let's get into it right away!

Looking For More Business Options? Check out these business ideas.

What Is An Airbnb Business?

Airbnb host

Airbnb is an online marketplace that enables people to rent their properties to travelers or anyone who seeks accommodation in a particular city or town. An Airbnb host is the person who makes their property available for short-term rentals on the marketplace.

While some people use Airbnb casually as a side hustle, you can actually turn it into a full-time business.

In that case, using your own home won't exactly be feasible, so you'll need to buy a new property dedicated to your Airbnb business.

Reasons You Need to Know How to Start an Airbnb Business

Starting an Airbnb business may not exactly sound like rocket science. However, without having a strategy in place, your return on investment will probably be affected, even if it's as simple as starting an Airbnb business.

The initial investment for an Airbnb business can be very high, so you'd want to put that money to good use. Unaware small business owners don't have as much experience as savvy real estate investors, so there's a high chance of business failure.

Ideally, you'd want to maintain a positive cash flow through your business lifecycle to maintain its continuity. That can only happen with positive reviews and a high customer satisfaction rate.

Step-by-Step Instructions on How to Start an Airbnb Business

To start an Airbnb business, follow these steps:

1. Set a Budget

The first thing you need to do before starting an Airbnb business or any other business is to determine your budget. Without knowing how much you can spend on your business, you won't be able to figure out whether you'll be able to start the business in the first place or not.

Set a budget airbnb

Typically, the costs of starting an Airbnb business are broken down into the following categories:

  • Purchasing a property
  • Mortgage costs
  • Utility costs
  • Homeowners insurance costs
  • Business insurance
  • Property furnishing
  • Business license
  • Cleaning services

When setting a budget, you should consider how you'll finance your property. As a beginner real estate investor, you have four options: cash-out refinance, reverse mortgage, home equity credit lines, and traditional vacation rental financing.

Cash-out refinancing can be a good way to finance your property, but only if you have adequate equity in your main residence and solid credit history.

Opting for a higher-value mortgage will also allow you to use the cash difference to pay the down payment of your short-term rental property.

On the other hand, if you're older than 62, going for a reverse mortgage can be an excellent way to finance your Airbnb property.

The key advantage of a reverse mortgage over a regular one is that you instantly access the mortgage's full amount and are only required to repay it when you sell the property or move out. That's not the case with regular mortgages since you'll need to repay them in monthly installments.

Another alternative is to take a home equity line of credit to buy the property, but this only works if you have significant equity in your current property. Not only will you maintain your current mortgage rate but also qualify for another mortgage.

Of course, you can also go the old way and simply apply for a loan from any lending entity to finance your property. The problem is you'll have to pay an upfront payment, but the rest of the loan's value will be divided into monthly installments over a long-term period, usually 10-20 years.

2. Choose Your Niche

There are different types of travelers, and ideally, you'd want your property to accommodate the needs of a defined audience to encourage people to rent it.

For example, if your property is intended for foreign business travelers, you'd want your property to have speedy Wi-Fi, comfortable desks and chairs, and to be located in a calm area.

On the other hand, if you want to attract solo travelers or couples, a small studio apartment with a good view will suffice.

3. Investment Property Search

Once you've decided what type of travelers you'll be targeting, you can start searching for a suitable property and conduct a proper rental property analysis.

Your choice of Airbnb investment property can significantly impact your earning potential. Here's what you need to consider:


The first thing you need to think about when purchasing a property is the location. Remember, there's a good chance that the travelers who will rent your property are new in town, so the property's location can make or break the deal for them.

Ideally, you'd want your property to be easily reachable by multiple methods of transportation. It should also be in a lively area where the guest can easily find a place to eat or shop. In addition, it's recommended that you pick a location where services are easily accessible as well.

Many tourists also prefer to stay at properties that aren't too far away from the city center so that they can easily move from one location to another without wasting too much time on transportation.

Property's Type and Size

Once you've picked a location to search for a property in the real estate market, you can check what property type and size are suitable for your budget. Many travelers don't care much about the property's size, especially solo travelers.

So even if you bought a studio apartment for your Airbnb business, it could potentially make you a lot of money. Some people even prefer smaller apartments and shared accommodation to save on overall travel costs. It all depends on who your target audience is.

So, for example, if you're targeting large families on vacation, you need a two-story or triple-story home. Just keep in mind that it'll cost you much more to buy and furnish than small apartments.

Also, here's a tip:

Make the most out of your property's rental space. If you buy a studio apartment, you can add a sleeper couch or bunk bed to accommodate an additional person, making it suitable for shared accommodation.

4. Prepare the Property for Guests

Preparing a vacation rental for guests is entirely different from furnishing a property you'll simply live in or rent to long-term tenants.

Furnishing should include beds, chairs, tables, desks, couches, and kitchen cabinets. The size and number of each of these items largely depend on your space.

It's also necessary to include basic kitchen items, like plates, cups, forks, knives, boilers, etc.

Moreover, you need to make the property Airbnb-friendly. For example, in an Airbnb rental property, you need to make sure that the check-in process is as smooth as possible. It's recommended that you install an Airbnb lockbox to allow guests to self-check in.

Just remember to change the passcode of the lockbox before the next guest checks in.

On top of that, you must send clear and concise check-in instructions for your guests. It's also important that you take care of maintenance works and repairs. Conducting a deep cleaning process before the next guest arrives is vital as well.

5. Open a Business Bank Account

A business bank account is required for Airbnb rental properties to conduct all of your outbound and inbound financial transactions.

Almost all banks offer business bank accounts with variable terms, so you might want to check out a few banks and choose the one with the most favorable terms and conditions.

6. Complete Your Tax Registration

Before officially starting your Airbnb legal business entity, you must register your business with the tax authority. Typically, an Airbnb business has two tax categories: sales tax and income tax.

Sales tax is collected from guests. Whenever you issue a receipt for your guest, you must make them fully aware of the exact tax amount they're paying when booking and collect sales tax after informing them.

Income tax, on the other hand, is deducted from your net profit. The IRS'll require you to log your Airbnb income and expenses. When you receive a Form 1099-K from Airbnb, you'll have to calculate your income and report it.

Side note: 

When reporting your income, make sure you deduct all business expenses to pay fewer taxes. These include property mortgage or rent, property insurance, furnishing, utilities, repairs, and cleaning service.

Tax registration is crucial for a legal and proper business structure. You won't have to pay any taxes if your yearly net profit doesn't exceed $600.

7. Create an Airbnb Listing

After preparing your property for guests and completing your tax registration, you can now create an Airbnb listing for your vacation rental.

airbnb sign up

The process can be a bit time-consuming, especially if you want your Airbnb listing to stand out.

Here's everything you need to do:

  • Capture pro-level photos of your property, showcasing all of its strong points (view, amenities, etc)
  • Write an in-depth description of the property, describing its best features and who it might be suitable for
  • Make a new host profile to introduce yourself to your potential guests
  • Brainstorm a creative title for your Airbnb listing to make it unique

Nevertheless, if you want to get your listing live as quickly as possible, you don't need to make everything perfect at first. Just make sure that you update your listing regularly to make it look as attractive as possible.

Once your property is all set up and ready, you can turn your attention to listing it on a vacation rental platform. For this step, you will let the type of audience you are trying to attract and the targeted market guide you.

8. Set Your Price

When deciding your listing's price, you need to take the following three factors into consideration: Affordability, market, and audience.

The standard Airbnb fee for hosts is 3% of the total receipt for each booking. In other words, the price your potential guests see will be higher than what you'll earn.

However, in some cases, the fees can be higher. If your Airbnb business is based in Italy or if you're an Airbnb Plus host, expect to pay higher fees. The fees are also higher for hosts with strict cancelation policies. 

When setting your Airbnb price, try to utilize Airbnb's built-in metrics that benchmark your prices against other Airbnb rentals in your location. It also recommends when you should adjust your prices, like when demand is lower or higher than normal. 

There's an option to specify a minimum number of nights for your guests to be able to book your property. It'll help you make up for your investment in cleaning and upkeep. On top of that, you can create a variable price that depends on the number of guests. Some Airbnb hosts charge extra services, like equipment rental, tours, and cleaning. 

When you're still starting out, the best route is to set your prices so that you make a small profit margin. Competitive pricing will attract more guests, and once you start getting positive reviews, you can gradually raise your pricing so that it matches or exceeds the average for your area.

Guests are charged before arriving at your property, and you should receive the full amount within 24 hours of your guest's arrival. 

Taking it to the Next Level: How To Go Beyond Starting A Traditional Airbnb Business

If you really want your Airbnb business to succeed, you need to invest more in your vacation home rental to ensure an unmatched stay for your guests.

Here's what you can do:

Equip Your Property With Essential Amenities

Your vacation rental property shouldn't just be a "place to sleep"; your goal is to make your guests enjoy their stay.

So, by investing in high-quality supplies and amenities, you can guarantee an unforgettable stay for your guests.

These include bathroom supplies, mattresses, kitchen essentials, and others. You want your guests to have everything they need in the property and not have to bring their own supplies. Otherwise, expect to receive significant negative reviews from your guests.

Of course, these are just the basics, but if you want to go above and beyond, you can also include some or all of the following luxury amenities:

  • Workstation
  • Hot tub
  • Wi-Fi booster
  • Smart devices
  • High-quality toiletries
  • Board games or even gaming consoles

This is entirely dependent on your market. Think about what your target guests would really enjoy in their stay and prioritize it. For instance, a business traveler would appreciate a workstation more than a couple of board games.

Another great idea is to include a welcome package to surprise your guests when they arrive after a long flight. A welcome basket wrapped in a satin ribbon and filled with fruits, nuts, and snacks is all your guests would need for excellent customer satisfaction and a 5-star review.

You can also add a cute welcome book with information like your number, Wi-Fi credentials, and instructions on using certain amenities like alarms and microwaves. You can also add any important notes your guests should be aware of.

Optimize Your Workflow

As your Airbnb rental business grows, you'll need to automate certain operations to streamline your workflow and manage multiple hosting operations easily.

Various vacation rental software solutions can help you run your Airbnb business more smoothly. These solutions make managing multiple accounts and listings much easier, with a unified inbox that lets you view and respond to all your messages in a single location.

Vacation rental software can also automate guest reviews and help you share daily schedules with your team and assign them tasks.

In addition, this type of software can also be used to accept payouts and create invoices with Stripe or PayPal integration.

Alternatives to Starting an Airbnb Business

While an Airbnb vacation rental business can definitely be profitable, there are other alternatives that you can consider if it doesn't click with you.

Here are some of the best ones: enables you to list your property for travelers from all over the world. It's one of the most well-known accommodation websites for vacation rental bookings.

It's mostly focused on hotels, but since the apartment and house selections are often limited, you'll find that there's less competition for you to deal with. It also lets you accept security and damage deposits from guests.

Not to mention, also helps travelers book flights, internal transportation, and guided tours to tourist attractions, offering a more comprehensive booking experience than Airbnb, which only focuses on accommodation.


Vrbo is very similar to Airbnb as it offers private properties for rental. The main difference here is that you can't rent a shared property. In other words, guests can't stay with you in the property if you already live there.

The key advantage of Vrbo is that HomeAway owns it, meaning that your property will automatically be listed there as well.

This increases your chances of getting more guests to book your short-term rental property.


SimplyOwners is targeted at travelers that prefer to rent directly from owners.

Guests won't have to pay an additional service fee if they book your property through SimplyOwners. However, you must make a request to the SimplyOwners team and wait for them to create a listing for you if approved.

You also have to pay an annual listing fee.


Like Airbnb, FlipKey offers hosts and guests a seamless listing and booking process. You can list all types of vacation rentals on it, yachts included.

FlipKey also has an unmatched review system that ensures 100% transparency.

Wrapping Up Starting an Airbnb Business

So that was everything you needed to know about starting a profitable Airbnb business.

Running your own Airbnb business requires buying a property, completing all business and tax registration paperwork, furnishing the property, and creating an Airbnb hosting listing.

Since this is a small business, you don't really need to be an experienced real estate investor to become an Airbnb host. It's much simpler than that.

About the Author

Colin Shipp is a marketer who has been working remotely full-time since 2015. He specializes in growth marketing, content marketing, online courses, and remote work. On he writes about strategies he is using in his own life.