Airbnb has grown tremendously over the years in popularity, although it’s not a risk-free endeavor. Many cities are starting to regulate the use of Airbnb’s with restrictions on how and where an Airbnb is legal. Taking a deeper dive, some homeowner associations are banning the use of Airbnb’s in neighborhoods due to traffic and parking issues. With that said, there are still many areas across the country that still allow Airbnb’s and that creates some opportunity for you to make some money.
Yes, Airbnb can be time consuming depending on how much of the work you do yourself, such as repairs and cleaning, but in the end, you’re adding an income source.
Here are six ways to make money with Airbnb:
1) Airbnb your own home. There are a variety of reasons that you might have the opportunity to rent your home out. Perhaps you are traveling for an extended period or maybe your job is relocating you for a year or two, either way using Airbnb is an option. Now it might be easier for you to find a long-term renter for your home but if your home is in a tourist area or a hot location, using Airbnb might be a profitable venture for you.
Let’s say you could rent your home to a long-term renter for $1800 a month vs. using Airbnb for $125 a night. If you can Airbnb your home for 25 nights a month then that brings in $3125 putting you $1325 a month ahead. (You’ll still have utility bills to pay so that will cut into your profit a bit.)
If you are mortgage free, that’s cash in the bank.
There are also instances where people have moved out of their home and into a smaller house so that they can profit from using Airbnb. Some couples have moved into their motorhome leaving their primary home to Airbnb. This is providing an income to support their travel.
2) Airbnb a room in your home. When people think of Airbnb they often think of it as using their whole home but renting out an individual room can be profitable. There’s potential to pay a sizeable chunk of your mortgage by using Airbnb to rent a room. That wasted space in the basement or the large space over the garage can be converted into a moneymaker for you.
3) Buy a second home to Airbnb. Perhaps you don’t want to Airbnb your own home or rent a room out but there are always opportunities to buy a home to specifically Airbnb.
Many folks are buying second homes in areas they may want to live when they retire. Whether it’s the beach or the mountains, folks are buying second homes and using them as an Airbnb until they are ready to relocate.
4) Airbnb Arbitrage: You don’t own any real estate. You may or may not have heard of this, but it’s been growing in popularity for years. Airbnb arbitrage is when you rent a home for an extended period and then you turn that rented home into an Airbnb. You don’t own the home but renting it with the hopes of making more money with Airbnb than you pay in rent and utilities.
For example, you rent a home for $2000 a month and then you charge $150 a night through Airbnb. If you rent it for 25 nights a month, that will produce $3,750. Let’s say the utility bills combined work out to $250 a month, that gives you a $1,500 profit. Plus, since it’s a rented home, any home repairs would fall back onto the landlord, not you the renter.
Now here’s the risk. Not every home for rent is going to allow you to Airbnb the property so you’ll need to get permission from the landlord and put it in the contract. Also keep in mind that you could get caught paying rent if regulations change. If the home you rented is no longer able to be used for Airbnb then you’ll be stuck with paying that monthly rent with no offset. Also, there is a lot of competition on Airbnb compared to five years ago. Airbnb arbitrage still works but it doesn’t come without risk.
5) Rent out your Airstream or Vintage RV. Yes, this is actually a way to make money with Airbnb. There are folks who have their Airstream or unique remodeled vintage RV sitting on their property and making money using Airbnb. Think about it, your RV is just sitting there when you’re not using it so why not turn it into a money maker. Plus, how hard is it to clean a space of less than 200 sqft. With that said, if your motorhome reminds people of cousin Eddie’s RV in Christmas Vacation, then you’ll probably not get a whole lot of takers.
6) Rent out your She-Shed, Man Cave or outbuilding. With more and more folks building sheds behind their homes for a variety of purposes, converting those into a money producing Airbnb is a possibility. Now converting that she-shed office or man cave into an Airbnb will probably set you back some money initially. There most likely will be some cost to upfitting, such as adding a bathroom, closets or a small kitchen, but the costs might very well be worth it.
Making money off an Airbnb may not be the most passive way to make money because it will require some work. However, if you’re willing to put the time in and roll up your sleeves and do a little work, the payoff can be quite profitable.
Live free my friends,
Eric Gaddy
