How to make money on airbnb

Investing in real estate is good for those who want to make money. And this is because, through real estate investing, you can buy a property and use it to earn more. Now there are many ways to use an acquired property for profit. But perhaps the ones gaining more traction are short-term rentals on Airbnb.

But what is Airbnb?

If you’re interested in vacationing, you’ve probably heard of apps that can connect you with people who will let you stay at their property for a while. The app, called “Air Bed and Breakfast” or Airbnb, was launched in 2008 by two industrial designers who moved to San Francisco.

They couldn’t pay rent for their apartment at this time, so they decided to make extra money by renting out their place to people who couldn’t find a temporary hotel. And long story short, their strategy became a huge hit as it expanded to a massive network of 4 million hosts worldwide. And to this day, their platform continues to create more opportunities for hosts and real estate investors in general.

Related: Airbnb CEO: It took us 12 years to build, and we lost almost everything in 6 weeks

Long-term versus short-term rentals

Real estate investments include renting properties and there are two main ways to generate income from them: Long term rental And Short term rental. When I started as a real estate investor in 2012, all my properties were long-term rentals. But in 2017, I converted them all to short-term stays, mostly through Airbnb.

Why? There were several reasons that made me decide to go all-in with Airbnb:

1. You earn less money on long-term rentals.

Did you know that if done right, you can earn an average of $2,000 monthly on Airbnb? Of course, many factors must be considered to get this number. Also, you can make less or more than this amount every month.

But the thing is, with Airbnb short-term rentals, you get to set your price, and no one else has a say. You can’t do that with traditional long-term rentals. With long-term rentals, you can only set a fixed amount and increase your rent by 3% to 5% a year.

2. You have greater responsibilities as a landlord.

There are several factors to consider when hosting a long-term rental, and one of them is that your tenants may not be able to take care of repairs to your property. The reason is simple: they won’t be there forever. Ultimately, the obligation still falls on your shoulders.

Another fact to mention is that you cannot evict your tenants easily. Now, conditions vary from city to city and state to state, but generally after 30 days of stay, your guests earn certain rights.

Case in point: In 2020, the government passed an eviction moratorium that does not allow landlords to evict their tenants for non-payment. This was certainly helpful for many tenants across the country. But now, some landlords still owe thousands of dollars, and they may never get the chance to get behind them.

3. With Airbnb short-term rentals, you don’t have to work like an employee.

Short-term rentals are passive in nature, meaning that if you own a property, you can earn even if you’re not around. Add this to Airbnb’s online platform and your market potential expands even further.

But here’s the thing: You can still be stuck working around the clock to manage your list Fortunately, there is a way to create a system and create a team that manages the business for you. We use this innovative business model with Airbnb, which has accelerated our cash flow and offered tremendous growth.

4. You don’t have to buy property to get started.

If you’re familiar with cash flow goals for long-term rentals, you’ve probably heard that the goal is to earn $200 per unit per month. That’s all well and good, but if you’re trying to replace a job that pays you $5,000/month, this income won’t pay you much. You still need to own at least 25 units to get there.

So what you can do instead is buy a few units, give them a nightly rate and launch them on the platform to start getting bookings and recover your returns quickly.

But what if you don’t own the property and still want to Airbnb? Then, all you have to do is apply Arbitrage model.

The arbitrage model, also called subleasing, is where you rent properties from other landlords, get their permission in writing, and then launch their properties as your short-term rentals on Airbnb. Yes, this strategy is completely legal and allows you to start a business without buying property

Related: How to Make Money Online: The Basics

Are there other ways to start Airbnb even if you don’t own a property?

Yes. Besides subleasing, there are two other ways to start an Airbnb business without much capital.

1. Co-hosting

With the co-hosting strategy, you don’t have to buy or own the property because all you have to do is help the hosts manage and manage their listings. This method allows you to learn more about the business and earn.

2. Using OPM (Other People’s Money)

A balance transfer occurs when you transfer funds available on your credit card to your checking account. You can then use this money to sublease a property and start your own Airbnb business without using any of your money.

Airbnb is a great platform for real estate investors. Its innovative business model allows you to generate positive cash flow, get started even if you don’t own property yet, and enjoy the time, location and financial freedom most people only dream of.

RELATED: How to Start a Business with Just $1,000