Earning a living, or at least a side income, off your property by listing it on a short-term rental website might seem like easy money—the dream. While some are able to make six-figure incomes doing so, the average Airbnb host makes $924 a month sharing their space, and it’s definitely not easy money. Take it from us, two people who earned about $10,000 via sites like Airbnb and Craigslist by renting out our apartment while traveling and also managed a rental property in Maine with an overall rating of 4.8 out of 5 stars.
We learned everything the hard way, and, to be honest, we’d like it if you didn’t have to.
Do some soul-searching before you get started
You’re going to be letting strangers into your personal life, so it’s good to think about what’s really involved before potentially winding up in over your head. For starters, ask yourself questions like:
- How long do I want to rent my place for, and how often?
- How much do I want to make per night or rental period?
- Do I want to rent out my whole place or just a room? Do I want to share my space or only rent it when I’m away from home? (These answers will be important as you figure out what’s legal where you live.)
- Will I need to buy any new furniture, bedding, towels, or other items to make my place ready for guests? Do I have any concerns about privacy or security, and will I need to make any related investments (such as a home security system, privacy fence, soundproofing, or a separate Wi-Fi network)?
- Who will clean my place between guest stays?
- Will I manage the listing, all guest inquiries, and potential issues, or should I hire someone to do it? (Keep in mind, you may find yourself fielding multiple inquiries from potential bookings every day, handling guest questions from their arrival to departure, and many platforms encourage you to respond within 24 hours.)
- Am I OK with guests checking themselves in or will I want myself or someone else to greet them?
- If I am away and there is an emergency, who can I rely on to help with the guests?
Find out what’s legal (and what’s not) in your area
Depending on where you live, there may be no restrictions on short-term rentals or there may be specific regulations to follow. For instance, New York City has made it illegal to rent out a property for less than 30 days, unless you or the permanent tenant lives in the apartment at the same time, among other rules. San Diego has similar restrictions: It requires people interested in renting out their property for less than 30 days at a time to get a transient occupancy registration certificate. This allows the city to collect a 10.5 percent transient occupancy tax paid by the guest upon booking, a fee not charged if the stay is 30 days or longer.
To find out what’s allowed in your area, check your local city and state government websites. If you live in a condo or a community with a homeowner’s association (HOA), you’ll also need to find out if your property is subject to any policies related to short-term rentals.
Decide where to list your property
There’s a growing number of websites where you can list your short-term rental property, including Airbnb, HomeAway, VRBO, Orbitz, Booking.com, and, one of the original pioneers of short-term rentals, Craigslist. Each collects a different percentage of the earnings you generate from bookings made on their site. For instance, Airbnb charges most hosts in the US a 3 percent service fee (while certain listing types and hosts outside the US may be charged a higher fee). Elsewhere, both VRBO and the Expedia Group-owned HomeAway charge a 5 percent commission fee and a 3 percent payment fee. For a budget-friendly option, Craigslist charges hosts a $5 fee to list apartments in New York City, Boston, and Chicago, but is otherwise free.
Depending on your income goals, you may want to list your property on as many platforms as possible. Doing so will increase your overall bookings while potentially sacrificing more earnings to service fees. If you’d rather earn more per night, however, you may want to forego listing your place on sites that take a greater cut of your cash.
Managing individual listings, availability calendars, booking inquiries, and booking confirmations across multiple websites can present a logistical challenge. The sites we used as hosts—Airbnb, HomeAway, and VRBO—offer the option to sync calendars from platform to platform. If you’re looking for a way to handle everything in one place, there are paid services such as Guesty, Lodgify, and Hostaway available. (Guesty and Hostaway require you to request a quote to find out their pricing, but Lodgify says their platform starts at $32 per month if you sign up for a full year.)
Create an appealing listing
A picture is truly worth a thousand words when it comes to attracting the attention of potential guests, who are most likely looking for options on their smartphones and judging your place based on your photography abilities.
In addition to filling your listing with high-quality pictures, you’ll want to craft an accurate description of your place. This should include the areas of your home or property that guests will have access to (the whole place or specific rooms) and available amenities (such as cooking supplies and snacks), so there are no surprises when your guests arrive. Lastly, you’ll want to list your check-in details and house rules, so guests know how you expect them to treat your place. Be specific about things like check-in and check-out times, quiet hours, and the maximum number of guests.
Accuracy is key, as sites like Airbnb encourage guests to leave reviews, and one of the factors they’re asked to weigh in on is how truthful you’ve been in describing your place.
Set your price
Now it’s time to set the right price for your place. A good place to start is by looking up what your competitors (your neighbors) are charging in your area. Real estate sites like Movoto also provide estimates of a property’s short-term rental income potential. Almost all the popular listing sites have algorithms that will suggest pricing based on your area, but, in the end, you are the one who has the last word.
In addition to your nightly rate, you can include a cleaning fee that guests pay as a one-time charge. When calculating this fee, consider who will be doing the cleaning. If you hire someone, it may cost $15 to $35 an hour, depending on where you live.
At first, you may want to offer a special 10 to 20 percent discount to the first three guests to help you get your first bookings. This may motivate guests to stay with you, since people may otherwise be hesitant to book a place without any reviews.
To encourage longer-term bookings (and less turnover for you), you can also offer discounts on an ongoing basis when guests book a week-long stay or longer, or a stay of at least 30 days. For instance, 10 percent off for a full week, or 15-20 percent off for a month or longer.
A note about short-term stays: They may help you fill up your booking calendar, but will also mean more frequent cleanings and, potentially, more wear and tear on your home. If you’re fine with that, you can experiment and set the parameters that work best for your needs.
Track your revenue
Although individual property listing websites will tell you the revenue you’ve earned from their platform, you may want to track all your earnings if you’re listing on multiple sites. Paid booking management services like Guesty can help, but if you plan to do it yourself, these are some of the key metrics we tracked for our properties:
- Date booked on
- Number of nights booked
- Booking site used
- Total payout
- Guest name
- Discount amount and percent (if applicable)
- Booking site service fee amount and percent (if applicable)
- Cleaning fees
- Losses due to cancelations or refunds
- Total earnings
- Nightly earnings
- Percent occupancy by month
Be prepared to provide customer service
Think of the customer service you’ll need to provide in the following stages:
At this stage, people are deciding whether or not your place is the right one for them, and they may ask for more information about your listing. For instance, they might want to know if you can make an exception to your no-dog policy, if the check-in and check-out times are flexible, what specific amenities are available, and what attractions are nearby. We found it helpful to create a document we could pull answers from when responding to the most frequently asked questions.
We also put together a list of recommendations for the area, with suggestions including local restaurants, grocery stores, wineries, bars, parks, museums, events, and attractions. That way, when people asked about these at this stage, the answer was just a copy/paste away.
Upon booking confirmation
If your guests haven’t already asked for it during the booking inquiry process, they may now reach out for recommendations or ask about the check-in process.
Ahead of guest arrival
To stay ahead of guest questions, you may want to reach out with all the information they’ll need for a smooth check-in. We created a standard welcome message detailing the check-in process, local recommendations, the Wi-Fi details, quiet hours, and our contact information.
After check-in and during the guest’s stay
At this point, your job is to make sure your guests arrive safely and find everything they need to have a comfortable stay. After an initial introduction, your contact may be minimal for the rest of the stay.
We left a printed guide to the house inside the property we managed in Maine, which detailed where guests could find things like extra towels, sheets, toiletries, and coffee, along with instructions for the Wi-Fi, the check-out process, and how to contact us in an emergency.
On guest turnover days, your goal is to get your first guest checked out, the cleaning done, and, if there’s another guest coming that same day, your next guest checked in smoothly. To make sure you have the timing coordinated, it’s a good idea to send the cleaning person (or yourself, if that’s the case) to clean an hour after your guests depart. That way, your departing guests won’t feel rushed.
With many short-term booking rental sites, you and your guests can each rate each other. While there’s nothing you can do to change a review once it’s published, you can respond to it to show future potential guests that you take the time to address and respond to customer feedback (good or bad).
We’ve seen friends and family who have tried bringing in extra income via short-term renting go all in—at nearly full occupancy from the start—and burn out within a few weeks or months. It’s okay to invest time and find out this really isn’t for you. If you can, try to take things slow, and, if you’re not sure this is something you will be able to sustain, limit the money you spend buying things like new furniture or supplies. But if you find providing this service suits you well—happy hosting!