How To Make Money on Airbnb

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Catherine Tilke

Money Savings Advice How To Make Money on Airbnb

It’s been a tough year for many of us, but there’s finally a light at the end of the tunnel- and just in time for summer.

New research suggests that in spite of the newfound freedom, most of us won’t be jetting off abroad any time soon. Instead, millions of holidaymakers are getting ready to explore home turf, meaning now could be the perfect time to list your spare room on Airbnb.

According to building society The Cumberland, almost three-quarters of Britons say they’ll be planning their holiday in the UK this year.

With a staycation boom on the horizon, this guide will help you get ahead of the curve by sharing everything you need to know about getting started on Airbnb. From putting your guest bedroom to work for a few extra bucks to elevating your side-hustle into a bona fide business, we’ve got you covered. 

In Brief:

  • Make the most of your empty space by renting it out to guests on Airbnb
  • List your home now to cash in on the ‘staycation’ boom forecast this year

In This Guide:

  • How does it work and how much can I earn?
  • How to craft the perfect listing
  • Investments to give your home the edge

How Does Airbnb Work?

Just in case you’ve missed the hype, let’s run through the basics on Airbnb. Since 2011, Airbnb has been connecting travellers with homestays in the UK. After a simple sign-up process, you can advertise your spare beds- or entire home- as a place to stay for millions of travellers to see and, hopefully, book.

For travellers, AirBnB offers something that hotels don’t - the chance to ‘live like a local. Many people also enjoy the social aspect of staying in a family home. In contrast, others are tempted by the cosy comforts and savings that Airbnb stays offer compared to hotel holidays.

As a host, it’s up to you how seriously you want to take the opportunity. It can be a way to earn a bit of extra cash on the side with modest effort on their part for lots of people. However, it’s a viable full-time earner, too, if you have space and time to commit.

How Much Can I Earn Through Airbnb?

The average Airbnb listing in the UK earns £3100 per year or £250 per month. This is good pocket money, but its also worth remembering that there is a huge range of earnings on the site, and how much you earn depends on lots of different factors.



Location, Location, Location

There's no getting around this: where you live has a big impact on your earning potential. While it's certainly possible to make money on Airbnb almost anywhere, some places have a bigger pull for travellers than others, which affects the pricing. It's important to think about why travellers visit your locale so that you can target the right audience in your listing.

How Does Airbnb Pricing Work?

The website uses an algorithm to suggest a nightly rate for your listing. It takes into account your location, facilities, current demand and the cost of other properties in the area. You can choose to ignore the algorithm set your own rates, but the in-house ones are a useful guide as to how short-term, let's compare to renting.

AirDNA is a nifty site that shows you local Airbnb rates along with other handy business info, such as occupancy rates and average monthly earnings in a particular area.

Renting v. Airbnb

Some people prefer the reliability of traditional subletting. However, in lots of places around the country, you can earn much more through Airbnb. In 7 cities (Bath, Belfast, Brighton. Cardiff, Edinburgh, Manchester and Newcastle), just one Airbnb booking per week is enough to match what you could earn from a full-time renter.

According to Vanquis Bank, a spare room rented out full-time in Cardiff earns an average of £3408 per year. With one booking a week, the same room could earn over £6300 per year on Airbnb!

This works because Cardiff is a strategic city- it's home to one of the region's major sports stadium, so pulls tens of thousands of visitors every month.

How Much Does It Cost?

Registering and advertising on Airbnb is totally free! If you only have one listing, you'll pay a 3% service fee to the company whenever someone makes a booking.

For example, if you advertise your room for £40 and it's booked for 3 nights, your guest gets charged £120. Out of this, you receive £116, and Airbnb keeps £4.  

This fee pays for the platform but also includes liability insurance of up to $1,000,000 (approx. £718,000) which protects you from legal charges should anything happens to your guests while they're at your home.

Airbnb Startup Costs

Getting yourself up and running doesn’t need to break the bank, but you’ll probably need to make at least a few investments to give your guests a good experience and keep the bookings coming.

At a bare minimum, you’ll want to make sure your guests have clean bedding and new towels available. The goal is to make your guests as comfortable as possible within your means.

Lots of experts recommend going into Airbnb with an entrepreneurial mentality- meaning you should be prepared to invest and then reinvest your earnings to grow your business.   

We scoured a range of blogs and expert advice to compile a list of some of the best investments you can make to ensure your space is as inviting for travellers as possible.

Costs can quickly rack up, and it may not be possible to do it all at once- but this shopping list should get you on the way to making your home guest-friendly ASAP.  

To Ensure Basic Comforts:

  • Per bed: 2x sets of bedding, at least 2x pillows and 1x duvet
  • Basic Mattress – well worth the investment if yours has seen better days
  • Per guest: Two sets of towels
  • A new coat of paint – refresh the look of a room instantly
  • Wifi
  • Guest toiletries
  • Ironing board
  • Blackout curtains-  light-sensitive sleepers will thank you!
  • Working smoke detectors and carbon monoxide alarms – you can get a free smoke alarm directly from AirBnB, or call your local Fire Service to carry out a safety check of your home and fit an alarm.

Level-Up Your Hosting Game:

  • TV
  • Bedside table & lamp
  • Desk – an essential for remote-workers
  • Well-stocked guest pantry (if self-catering is available, a selection of store-cupboard basics is a thoughtful addition)
  • A sofa-bed – a great way double the occupancy of your space instantly
  • Digital entry system – let guests pick up and drop off keys without you physically needing to be there
  • Local guidebooks
  • Professional photography – don’t let dodgy lighting ruin your listing

Go All-out:

  • Landscape your garden
  • Upgrade your plumbing- low water pressure in never a hit
  • Overhaul your interior design - Whether you DIY-it or call in the pros, having even one picture-perfect room as the cover photo on your listing is a bonus.

Ongoing Costs

Besides repairing general wear and tear, there are ongoing investments you’ll need to make.

Depending on how much time you have, you might decide to clean the property yourself after each stay or outsource to cleaners such as Cleaners or Airtasker to keep your space ready and primed for guests.  

If you have a full-time job, you could choose to outsource key exchange to Parcelly, which handles key exchange for Airbnb stays up and down the country.  

If you want to, you can take an even more hands-off approach and hand over management of the listing full-time to a specialised company, such as Guest-Ready or Pass the Keys, or even recruit a co-host.


Money Savings Advice Explainer. Find out more information about an Airbnb co-host by reading our short explainer article below.

We update all our guides regularly. If you are researching other ways to make money and we haven't got an exact guide that helps you, keep coming back as we update daily.


It’s worth thinking about these costs when you’re setting your rates!

Time Investment

For every booking you make, you’ll probably chat online with 5 guests who don’t make a reservation. This can be time-consuming, but unfortunately, its an important part of running a successful Airbnb.

Use the app to respond to messages on-the-fly, or outsource to a management company such as Guest-Ready or Houst if you really don’t have time to keep up with your enquiries.  

Taxes

If your business takes off, you may also be liable for taxes on your earnings!

Business Rates

You’ll need to register to pay business rates in England if your home is available to book for more than 140 nights per year.

Unless you earn a lot of money through Airbnb, you will probably qualify for small business relief even if you need to register.

 In Scotland and Wales, the rules are slightly different. Your home also has to be booked for at least 70 nights per year before you pay business rates.


Money Savings Advice Explainer. Find out more information about business rates by reading our short explainer article below.

We update all our guides regularly. If you are researching other ways to make money and we haven't got an exact guide that helps you, keep coming back as we update daily.


Rent-a-Room Scheme

You can earn up to £7500 per year on Airbnb without paying any tax across the UK. If your Airbnb is also your main residence, you’re likely to qualify. However, to benefit from this tax relief, you’ll need to register before you start renting out.

Make Your Airbnb Listing Stand Out

There are nearly a quarter of a million listings on Airbnb in the UK, so it’s really important to get your right to give your new business the best chance.

Your listing is where your guests can check out photos, details about the property and info on the host (that’s you!) before deciding whether to book. In short, it’s really important to get it right.

It’s so important that there are even companies that specialize in perfecting listings- Optimize My Bnb, run by a former Airbnb employee, promises to tweak your advert to get you higher rates and more enquiries.

If you’re not ready to part cash to consult with a specialist, don’t worry. It’s possible DIY a great listing by following our top 5 tips:

1 - Take Amazing Photos

According to Airbnb, guests spend more time looking at photos than any other part of the listing. Capture your home in its best light by following their tips: tidy up, time your photoshoot according to the best natural light, and add captions.

Alternatively, you can pay a pro to style and shoot your home. Professional photos can boost income on a listing by up to 40%, say Airbnb. London-based hosting pros House make a convincing argument for this case with their before-and-afters.

2 - Write a Description

Your listing name and description are just as important as the photos. The listing name is the first thing potential guests see when they search.

Think about why your guests are likely to be coming to your neighbourhood. Close to a famous venue? Include it in your title. Live in (or near) a desirable part of town? Make sure to mention it. Beautiful garden? Tell your guests!

Try to keep your title short and make each word count. Once you have a few title options, run them through an SEO search engine to see which combination of keywords people search for the most.

3 - Be Honest!

Your listing’s description is where you let your guests know more about the property and what their stay will be like. As well as telling them more about your home, this is the place to let them know what (and what’s not) included, plus any house rules that they might need to know about is.

By being clear and honest about your expectations from the start, you’ll hopefully attract guests who are willing to abide by your rules and help them come fully prepared for their stay.

4 - Introduce Yourself

Hosts and travellers are expected to share a living space (unless you’re renting out your entire home), so it’s important you’re honest about who you are. Solo travellers especially need to be able to trust that their host is the person they claim to be.

Upload a clear headshot to your profile and add some personal details to put your guests at ease. A 2017 Cornell University study found that travellers most preferred host profiles, which are the short-medium length and include details about where the host comes from, what they do for a living and their approach to hospitality.

For example:

“Hey! I’m Ollie. I’m a sous chef with a passion for Italian food. (what they do for a living) I grew up in North London and have lived in Leeds for 7 years (where they come from). I love how much this city has to offer and would be delighted to host you and help you explore! (hospitality style).

5 - Recruit Your Friends and Family

According to Danny Rusteen, former Airbnb employee and head of Optimize My Bnb, Airbnb is notoriously secretive about how its search algorithm works. However, the company once revealed that if a property is saved on someone’s wishlist, it’s more likely to appear higher in search results. Ask your friends and family to save your listing to give your property a boost in the search rankings!



What Are the Risks?

Inviting strangers into your home always carries an element of risk- but Airbnb is far from the Wild West! Thankfully, the company has robust safeguards in place to protect travellers and hosts alike.

To the Property

It’s a good idea to secure any valuables or sentimental belongings somewhere that guests can’t damage them (or worse). The same goes for personal documents which may leave you exposed to ID theft, such as bank statements. 

Security deposits are taken automatically from travellers’ accounts on some occasions, depending on the property and the time of their booking. Airbnb holds funds for 14 days after their stay, during which time you can lodge a complaint if any damage occurred during their stay.

You can also set your own security deposit on your listing, if you would like to ensure one is in place every time you take a booking.

Airbnb’s Host Guarantee policy promises to replace anything damaged, broken or stolen by guests (or assistance animals). To lodge a claim, you need to provide photos to show damage, and receipts. It’s a good idea to gather any important receipts before you start hosting, and regularly take snaps of the property, so if the worst happens, you’ve got everything you need to find a solution.

To You

If you’re worried about letting strangers into your home, there are a number of things to make the hosting experience safer. It’s possible to change your account settings so that you only receive requests from people whose ID has been verified by Airbnb.

You can check guests’ profiles too, to see what other hosts have said about them in the past before you confirm.

Other FAQs

Can I Airbnb If I’m a Renter?

It’s vitally important to check with your landlord before you start renting on Airbnb. Many buy-to-let mortgages specify that the landlord must be aware of who’s staying in the property at all times, and it could void their insurance if they’re found in breach of this. This means you could be risking eviction if you get caught.

If you need to approach your landlord, try asking if there is anything you could do to make the arrangement acceptable to them. By being mindful of their needs, you might be able to negotiate a setup that works for both of you.

Once you’ve decided to take the plunge, you can be up and running on Airbnb within 24 hours- and on your way to a salary boost worth £1000s per year! Follow our advice and turn your dingy spare room into somebody’s home-from-home.

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Catherine Tilke

Catherine is our specialist financial news journalist. With over 7 years of experience and a raft of contacts in the financial world, she prides herself on delivering the most relevant and up-to-date financial news for our readers.

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