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May 24, 2024
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Ηow to start an Airbnb: A Full Guide

Starting an Airbnb can be an exciting and lucrative venture. With proper planning and execution, hosts can transform their properties into successful short-term rentals (STRs). However, creating a successful Airbnb business requires knowing how to start an Airbnb properly.

This comprehensive guide covers the essential steps needed to start an Airbnb. We tell you everything you need to know, from initial investment and case studies to tips for managing fees. By the end, you’ll have everything you need to know to start an Airbnb the right way.

How much does it cost to start an Airbnb?

Naturally, starting an Airbnb requires some initial investment. Whether you already own a property or plan to buy or lease one, you must take several critical factors into account.

Property acquisition

Many hosts already own the property they want to rent out. However, many plan to buy or lease a property, and many who already own a property want to know the process if they decide to expand later.

Location: The location of a property is a deciding factor in your initial investment. Properties in tourist areas and destinations will be more popular but will cost more to buy or lease.

Size and layout: The property should accommodate the types of guests you’re targeting, such as families, business travelers, snowbirds, etc.

Condition: Well-maintained properties reduce initial renovation costs and get guests in more quickly.

Renovation and furnishing

You must make your property as attractive to your target guests as possible. As such, you may need to invest in initial renovations and furnishings.

Renovations: This could include painting, flooring, addressing structural issues, and updating fixtures.

Furniture: Safe, usable, comfortable beds, chairs, and tables are essential.

Appliances: You’ll need to invest in kitchen and laundry appliances to cover the expected basics.

Decor: Artwork, canvases, rugs, and other ornaments can create a warm and inviting atmosphere and enhance your property’s attractiveness.

Licensing and insurance

To protect your investment, you must acquire the correct licenses and insurance.

  1. Business license

You’ll likely need a business license to operate in your locality. Check if your city requires a business license for operating short-term rentals.

  1. Insurance

Insurance is essential to protect yourself and your property while being an Airbnb host. While Airbnb offers extensive liability and damage insurance, some homeowners choose to obtain additional homeowners insurance with STR coverage to add an extra level of protection against damages and liability.

Operational costs

How to start an Airbnb and running it requires knowing your operational costs. Within this context, there are several important costs to consider.


For any operational Airbnb, you must pay for electricity, water, gas, and internet. If you plan to offer extras such as cable, you must calculate these costs, too.


Running a successful Airbnb requires regular maintenance. This includes cleaning and laundry, repairs, DIY, landscaping and more. For fast and effective maintenance that keeps your Airbnb running like clockwork, consider using a professional short-term rental maintenance service.

Cleaning services

As mentioned above, cleaning is an essential piece of maintenance and, therefore, operational costs. A clean and visually well-maintained property is crucial for guest satisfaction. Satisfied guests mean higher ratings and reviews of your property.

You can clean the property yourself or hire a cleaning or short-term rental maintenance service. Fees are generally passed onto guests.


Keeping household supplies in stock is another important element when considering your operational costs. These are standard practices for those running Airbnbs, and guests expect them.

Some of the key household supplies that need regular restocking include:

  • Toiletries such as shampoo, soap, and toilet paper.
  • Kitchen supplies such as coffee, tea, and basic cooking essentials.
  • Consumables such as trash bags and cleaning equipment.

Additional expenses

If you want your Airbnb business to flourish, there will be additional expenses.

Here are some of the main additional expenses you’ll need to consider.

Marketing and promotion

You’ll need to market and promote your Airbnb property to attract guests and maximize your occupancy rates.

Here are some of the best ways to market and promote your Airbnb:

  • Professional photography: Hire a professional photographer to capture high-quality images. These can significantly boost your listing’s appeal, optimizing your occupancy rates.
  • Listing fees: You’ll need to consider the money you may need to spend on listing fees.
  • Advertising: Paid promotions on travel websites and social media can boost your profile.

Technology and automation

You can use technology and automation to streamline your operations.

For example, a high-quality pricing tool can calculate the optimal nightly rates for your STR. Furthermore, using a professional property management company that provides listing setup and optimization can increase your revenue.

Property management software

Like technology and automation, property management software is becoming increasingly ubiquitous in Airbnb management. Many guests find that investing in property management software helps them manage their bookings and communication more efficiently. This allows them to save time and earn more while focusing on the most impactful elements of being an Airbnb host.

Smart home devices

We live in an era of smart technology, and most revolve around the home. To enhance security and the guest experience, you may invest in installing smart locks, thermostats, and security systems.

How profitable is starting an Airbnb?

No “How to start an Airbnb” guide would be complete without discussing profitability.

There are many factors to consider when discussing the profitability of starting an Airbnb. Location, seasonality, competition, and more determine a host’s profitability.

Here, we break down the main factors that determine the profitability of Airbnb.

Factors affecting profitability

To know how profitable starting an Airbnb will be, we need to start with the main factors that influence profitability.

  1. Location

Location plays a significant role. Properties in high-demand locations are typically more expensive, but hosts can also command higher rental prices. Plus, they generally have more reliable occupancy rates, which balances the cost of the property.

  1. Seasonality

You need to know your location's peak seasons. Seasonal variations can heavily influence occupancy rates and income potential.

  1. Competition

Research and know your competitors. The higher the competition, the more you’ll need to invest in property improvements and marketing.

Calculating profit margins

You can calculate profit margins by analyzing the following:

Nightly rates: Set rates based on local market conditions.

Occupancy rates: Calculate the average percentage of booked nights.

Additional fees: Include any additional fees such as cleaning, late, and pet fees.

Cost estimation

You’ll also need to work out the sum of all costs. This includes fixed costs such as your mortgage, property taxes, and insurance. It also includes variable costs such as utilities, maintenance, repairs, etc.

Profit calculation

To calculate your profit accurately, subtract total costs from total revenue.

It’s important to continuously monitor and adjust as you go. We recommend keeping a record of monthly profits and expenditures. Over time, you can adjust your strategy and maximize your profitability.

Cases and examples

Airbnb case studies help shed some light on what you can expect to earn, payout, and profit from. Use the following case studies to help you understand and calculate your expenditure and profit.

Case 1: City apartment

The Airbnb host is an entrepreneur who purchased a two-bedroom apartment in a busy city center. The initial investment included a $300,000 mortgage, $200 for utilities, and $150 for cleaning services. They listed the property at $150 per night. Their occupancy rate was 80%. Hence, the owner generated approximately $3,600 per month. After expenses, this resulted in good profits.

Case 2: Rural cottage

The hosts of this Airbnb are a couple who converted their unused rural cottage into an Airbnb. Their initial costs included $5,000 for renovations and $3,000 for furnishings. Their operating costs were low at only $300 monthly for utilities and maintenance. Their target guests were vacationers and travel enthusiasts seeking a countryside retreat. They charged $100 per night and had a 70% occupancy rate. They generated around $2,100 per month—a healthy ROI.

What do you need to do to start an Airbnb?

How to start an Airbnb includes knowing what you need to do. Starting an Airbnb requires some effort from hosts to get up and running. But knowing what’s required of you and where to start will help make the process more seamless.

Market research

One of the most important aspects of how to start an Airbnb is market research.

Below are three main facets of market research you need to conduct.

  1. Target audience: Identify your target audience and tailor your property to their needs. Business travelers, families, couples, and tourists have different preferences. By better meeting their needs you increase the probability of them choosing you over your competition.
  2. Competitive analysis: You must analyze your competitors. This can give you insight into their amenities, pricing, and guest reviews.
  3. Demand analysis: There are tools to gauge local demand. You can use this information to optimize pricing strategies based on market data.

Legal and regulatory compliance

When it comes to starting an Airbnb on the right foot, you’ll need to ensure compliance with local regulations. This means understanding and aligning yourself with local regulations specifically for short-term rentals.

Local regulations: Starting an Airbnb involves zoning laws, occupancy limits, and health and safety standards.

Taxation: This means understanding the tax implications of operating an Airbnb, including income tax, occupancy tax, and sales tax.

Licensing requirements: Some areas require specific licences for operating STRs. Check with local authorities to ensure you meet all the requirements.

Property preparation

Safety measures: Safety is one of your top priorities. Install smoke detectors carbon monoxide detectors, and fire extinguishers. Ensure all exits are marked and accessible.

Cleaning and maintenance: Ensure your property is clean and well-maintained. Keep on top of maintenance and regular deep cleaning.

Guest amenities: You will need to provide amenities that enhance the guest experience. These include comfortable bedding such as clean linens, kitchen essentials such as utilities and cookware, and entertainment options such as TV and streaming services.

Listing creation

Creating professional-grade and appealing listings can be the difference between closing bookings and not.

Follow these tips to ensure your listing creation meets the quality standards that will attract guests and get your property booked.

  1. High-quality photos

Investing in professional photography to showcase your property will make your property more attractive to guests. Highlight key features and amenities in the highest quality possible.

  1. Compelling descriptions

Write detailed and engaging descriptions. Include detailed information about the property. Also include nearby attractions and unique features to help you stand out.

  1. Accurate details

Ensure all information is accurate and up-to-date. House rules, check-in and check-out times, and amenity use must be clear and accurate for your guests.

Marketing and promotion

To get started and excel as an Airbnb host, marketing and promotion will be necessary.

Below are three areas to focus on to get your Airbnb noticed and booked.

  1. Optimize listings

Optimize your listing titles and descriptions with relevant keywords. This will help your property appear higher in search results, hence seen by more people.

If writing is not your strong suit, consider hiring a professional vacation rental management service that can write attention-grabbing, keyword-dense listings.

  1. Social media promotion

Social media is a prevalent and near-necessary marketing tool. Leverage it by uploading engaging content and visuals to attract potential guests to your property.

  1. Guest reviews

Positive guest reviews will be one of your most powerful tools. Encourage guests to leave positive reviews. High ratings and positive feedback boost your listing’s credibility and attractiveness.

Guest experience management

The experience you provide your guests is a crucial factor in starting your Airbnb journey correctly.

Communication: Communicate promptly and clearly with your guests. Address inquiries, provide check-in instructions, and respond to issues quickly to keep guests happy.

Personalized touches: Welcome notes, local guides, and complimentary snacks can add that little extra and provide a positive guest experience.

Problem resolution: Resolve issues quickly and effectively. Problem-solving can turn negative experiences into positive ones.

Guest experience management can be one of the more difficult and time-consuming aspects of being an Airbnb host. Consider hiring a professional vacation rental management service that offers 24/7 guest communication to help.

What percentage does Airbnb take?

To be a host on Airbnb entails fees extracted by the platform. Here we go listing the different fees you can expect to pay to be a host on Airbnb.

Standard fees

  1. Standard fee

Airbnb charges a standard service fee for each booking. This is usually a percentage of the booking subtotal.

  1. Cleaning fee

Guests will be charged a separate cleaning fee after their stay. You must ensure that this fee covers your cleaning costs.

Additional fees

  1. Extra guest fee

Most hosts charge an additional fee for extra guests beyond the standard occupancy number. This can earn you more money and compensate for additional wear and tear that may occur.

  1. Pet fee

If you allow pets, charge a pet fee. This will cover extra cleaning and potential damage.

  1. Security deposit

Request a security deposit to cover potential damages. This can help mitigate risk and ensure guests take care of your property.

Tips for managing fees

Use the tips below to better manage your fees and ultimately increase your revenue.

Use transparent pricing: Be clear and straightforward when listing your fees. Transparency helps avoid misunderstandings and helps build trust.

Set competitive rates: Based on market research, set competitive rates. An intelligent dynamic pricing tool can accurately adjust your rates based on demand and seasonality.

Track expenses: Track your expenses regularly to ensure you’re operating profitably. Also, use accounting software to more efficiently manage your finances.

Regular reviews: Take note of your reviews and adjust your pricing and fees based on market conditions and guest feedback.


As we’ve outlined, there are many aspects to creating a successful Airbnb business. Starting an Airbnb requires careful planning, an understanding of the costs involved, and a focus on providing a great guest experience. If you invest wisely, market effectively, and manage operations efficiently, you can create a lucrative Airbnb business. Follow these steps, considerations, and tips and you can traverse the complexities of starting an Airbnb and establish a thriving short-term rental business.

With that said, consider hiring a professional vacation rental management service. They’ll reduce the complexity, speed up the process, and make it easier for you to start your Airbnb business right. Keybee can help. Our service is the most flexible and complete on the market. Our cleaning service, pricing tool, listing setup and optimization among others will maximize your Airbnb business profits.


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