How to Become a Full-Time Airbnb Entreprener

Understanding Airbnb as a business opportunity

The modern Airbnb entrepreneurship landscape offers significant income potential for those willing to treat it as a serious business venture.

The short-term rental market continues showing resilience despite regulatory challenges. According to Airbtics, a short-term-rental host can make up to three and a half times more than a long-term landlord, with the typical U.S. Airbnb host earning $36,678 per year. However, Airbnb’s 2024 economic impact data shows the typical U.S. host earned $14,000 in 2024, with earnings varying significantly based on location, property type and management approach.

The Co-Host Network, launched in October 2024, has expanded opportunities beyond property ownership. This new model connects over 10,000 co-hosts across 10 countries with property owners who need management services. Co-hosts maintain an average rating of 4.86, with 73 percent being Superhosts and 84 percent helping manage Guest Favorite properties.

According to Jonah Hanig, founder and CEO of luxury rental property management firm Rove, the bigger your Airbnb network, the more you stand to earn. 

“In our experience, full-time Airbnb hosts can increase their revenue by 20 to 30 percent simply by being proactive about pricing, guest reviews and property upgrades,” Hanig told us. “It also opens doors to networking within the hospitality industry and scaling through multiple properties.”

Choosing your business model: owning, arbitrage or co-hosting

Understanding your options is crucial before diving into Airbnb entrepreneurship, as each model has different capital requirements, risks and potential returns.

Traditional property ownership

The most straightforward approach involves purchasing and managing your own rental properties. This model requires significant upfront capital, with most lenders requiring 20 percent down payments for vacation rentals, potentially more depending on your credit score. You’ll also need available cash to renovate and furnish properties to guest standards.

Airbnb arbitrage

Arbitrage involves renting properties on long-term leases and subletting them as short-term rentals. This model requires less capital but carries substantial risks. Daniel Cabrera, owner of Sell My House Fast SA TX and an adviser to many Airbnb entrepreneurs, advises caution when working with programs like Airbnb Arbitrage. 

“While Airbnb Arbitrage could be very profitable and doesn’t require any upfront ownership of a property, there are quite substantial risks associated with this approach, like landlord restrictions,” said Cabrera. “Traditional hosting requires more investment, but offers more control. Consider your financial status, risk appetite and long-term goals.”

Co-hosting

Co-hosting allows you to manage another host’s Airbnb property in exchange for a share of the revenue, typically 10 to 30 percent depending on the services provided. This model requires minimal upfront capital since you don’t need to own or lease the property, but it does demand strong hospitality, organization and communication skills.

Co-hosts may handle responsibilities such as guest communication, cleaning coordination, pricing adjustments and check-in/check-out logistics. The flexibility makes it a lower-risk entry point into Airbnb entrepreneurship, especially for those testing the market or building experience before investing in property or leases. However, because you don’t control the asset, your income depends on the property owner’s willingness to continue the partnership and the property’s performance in the market.

Step-by-step blueprint to launching your Airbnb business

Launching and growing an Airbnb business takes time and careful research. Follow these steps to get started.

1. Research legal requirements and market conditions.

Understanding local regulations is critical before investing in any properties. Your city or state may require registration, permits, licenses, insurance or other stipulations. Some areas forbid the practice altogether.

Recent regulatory developments significantly impact certain markets. In New York, for example, hosts must register with the city and cannot rent homes or apartments for 30 days or fewer unless they’re physically present. That rule applies even if the host lives in or owns the building. Hosts in San Francisco must reside in the property for at least 275 days a year to be eligible to rent it out short-term.

Consider the following additional legalities: 

• If you rent a property and want to offer it as a vacation rental, you’ll need permission from your landlord to list it on Airbnb. 
• If you own the property and you’re still paying off your home loan, you may need the approval of your mortgage provider. Some mortgage providers will say no, while others may require that you switch to a different type of mortgage that may cost more.

2. Analyze financial viability and earnings potential.

Calculate potential income using current market data to ensure profitability. According to Statista, average nightly rates vary significantly: San Diego averages $296, Los Angeles $230, Chicago $176 and New York City $119. Keep in mind that property size, bedroom numbers, amenities and specific locations cause significant price fluctuations.

Occupancy rates critically determine financial success. These also vary widely by location, peak season and property type. Airbtics reports current occupancy rates: Seattle 73 percent, New York 67 percent, Baltimore 60 percent and Houston 60 percent. Target occupancy rates between 65 and 75 percent for optimal profitability.

Factor in all expenses:

• Mortgage payments or rent
• Cleaning costs and maintenance
• Airbnb’s service fees (3 percent for hosts under split-fee structure)
• Insurance and utilities
• Property-related expenses

Cash flow management becomes crucial in seasonal markets where bulk income occurs during specific periods. Use Airbnb’s earnings estimation tool to assess profitability potential.

3. Identify your target market.

Before listing any properties, ensure that you understand what your target audience wants and that you can deliver it. Your property type and location will determine your typical customer. A city-center property, for example, will likely appeal to younger couples or business travelers, while a lakeside cabin in the woods may appeal to families or larger groups.

To better understand your target demographic, find similar properties in the area that receive excellent customer reviews. Note what your target demographic wants and appreciates — and what displeases them. Consider everything from the type of furnishings you provide to the proximity of nearby attractions and amenities.

4. Develop your scaling strategy.

You’ll likely need multiple rental properties to succeed as a full-time Airbnb entrepreneur. Depending on how frequently and at what rates you can rent out locations, it may take anywhere from three to 10 properties to build a profitable, sustainable business and achieve financial security.

Growing your portfolio requires significant financial commitments for each addition. Beyond down payments, you’ll need available cash for renovations and furnishing to guest standards.

5. Establish legal business structure.

Form a legal entity to conduct business as an Airbnb host, especially as your portfolio grows. Although it’s not legally required, operating through a business structure such as a limited liability company (LLC) can save you money on taxes. It also provides a layer of privacy in cases where a problematic guest may attempt to confront you personally or take other threatening actions. In business lawsuits, only the LLC’s assets are at risk, not personal assets.

6. Set up financial systems and tax compliance.

Tax laws and obligations vary by state and your tax responsibilities will differ depending on whether you rent out an entire property or just a single room. Many cities and states charge short-term occupancy taxes, which you are responsible for collecting and remitting.

To ensure compliance, keep meticulous records of all income and expenses. It’s wise to hire an accountant experienced with rental businesses – ideally, one who has worked with landlords and understands the nuances of short-term rentals.

Open a separate business checking account to simplify bookkeeping and tracking startup costs. Separating business finances from personal finances builds entrepreneurial discipline and aids tax preparation.

7. Secure comprehensive insurance coverage.

Business insurance is crucial for your Airbnb operation. Your LLC should secure buildings and contents insurance policies on the property, along with a commercial general liability insurance policy. Additionally, consider business income insurance to cover losses during periods when the property is uninhabitable, such as after fire damage or other major incidents.

8. Implement booking management systems.

Property management software becomes essential as your business grows to prevent double bookings and streamline operations. Double bookings must be avoided at all costs. If a client arrives at your property and discovers another occupant, they’ll complain to Airbnb and leave a terrible review for your business. You’ll also risk losing future revenue from repeat guests, since many travelers return to their favorite destinations year after year. 

Managing the business: automation, remote management and scaling

Successful Airbnb entrepreneurs leverage technology and systems to manage properties efficiently, often from remote locations.

Property management technology

Airbnb’s Software Partner program includes over 100 integrated tools for scaling operations. Leading solutions include Hostaway, Guesty and Hostfully, which provide channel management, automated guest communication and task management capabilities.

Key automation features include:

• Dynamic pricing optimization
• Automated guest messaging
• Cleaning and maintenance scheduling
• Multi-platform calendar synchronization

Remote management strategies

Using a systematic approach is key to managing Airbnb properties, especially if you are managing your properties remotely.

“The transition from part-time to full-time hosting is about mindset and operations,” said Hanig. “First, treat it like a business, not just a side gig. This means systemizing everything — guest communication, cleaning schedules and pricing.”

Hanig recommends:

• Use dynamic pricing software.
• Manage guest communications effectively.
• Build relationships with local service professionals, including cleaners and maintenance teams.
• Monitor local regulations for changes.

Health and safety compliance

Properties must meet all applicable health and safety standards, including:

• Smoke detectors and carbon monoxide detectors
• Fire extinguishers and first-aid kits
• Clearly marked emergency exits
• Essential amenities (e.g., toilet paper, soap, towels, pillows and linens)

Cleaning and maintenance systems

Reliable cleaning schedules ensure properties remain guest-ready. Professional cleaning teams after each stay maintain high standards impacting reviews. Consider offering small discounts to encourage guest tidying before departure.

Estimated startup costs and profitability breakdown

Understanding the financial investment required helps aspiring Airbnb entrepreneurs plan effectively and set realistic expectations.

Initial investment requirements

Startup costs vary significantly based on business model and location:

Property purchase (traditional model):

• Down payment: 20 to 40 percent of property value
• Closing costs: two to five percent of purchase price
• Initial renovations: $5,000 to $50,000+ per property

Furnishing and setup:

• Essential furniture and appliances: $3,000 to $15,000
• Kitchenware, linens and supplies: $500 to $2,000
• Professional photography: $200 to $500

Operational expenses:

• Airbnb fees: three percent of bookings
• Insurance: $1,000 to $3,000 annually
• Cleaning services: $50 to $150 per turnover
• Utilities and maintenance: Variable

Revenue projections

Based on 2024 Airbnb data, hosts across various markets can expect:

• National average: $14,000 annually per host
• Full-time hosts with multiple properties: $50,000 to $200,000+
• Co-hosts providing management services: $15,000 to $75,000 annually

As mentioned, short-term rental hosts can make up to 3.5 times more than long-term landlords, with successful hosts increasing revenue 20 to 30 percent through proactive pricing and property upgrades.

Common pitfalls to avoid

Learning from common mistakes can save new Airbnb entrepreneurs significant time, money and frustration.

Legal and regulatory missteps

Research local laws thoroughly before launching. Regulations continue evolving, with cities like New York implementing strict registration requirements that dramatically reduced available listings. Monitor local regulations continuously as they can shift and impact your business.

Pricing and financial errors

Avoid underpricing properties or failing to account for all expenses. Use market data and dynamic pricing tools to optimize rates. Account for seasonal variations and cash flow management in seasonal markets.

Guest communication issues

Poor communication leads to negative reviews and reduced bookings. Implement systems for fast response times and provide comprehensive property information including local guides and welcome packages.

“[Offer] clean and well-maintained properties, fast responses, and thoughtful touches like local guides or welcome packages,” Cabrera said. “It’s all about consistency that superhosts get there.”

Operational oversights

Avoid double bookings through proper calendar management and property management software. Maintain cleaning schedules religiously as cleanliness directly impacts reviews and repeat bookings.

Quick-reference checklist for Airbnb entrepreneurs

Pre-launch essentials

• Research local short-term rental regulations.
• Analyze market rates and occupancy data.
• Secure financing or identify properties.
• Form LLC business entity.
• Open a business bank account.
• Obtain necessary permits and licenses.
• Purchase comprehensive insurance coverage.

Property setup

• Complete property renovations and improvements.
• Furnish with essential amenities and comfort items.
• Install safety equipment (smoke detectors, fire extinguishers).
• Create property guidebooks and local recommendations.
• Take professional photographs.
• Test all appliances and systems.

Launch and operations

• Create optimized Airbnb listings.
• Set up property management software.
• Establish cleaning and maintenance schedules.
• Implement guest communication systems.
• Set up dynamic pricing tools.
• Create emergency contact procedures.
• Monitor reviews and respond promptly.

Skye Schooley contributed to this article. Source interviews were conducted for a previous version of this article.