What is Airbnb?
Airbnb is a platform where property owners choose to rent out part of their houses, like a DSQ. You can also choose to rent out the entire property on a short-term basis. It is majorly used by travelers who don’t want to stay in a hotel and would rather have a ‘home-like’ experience. It also helps property owners make money from parts of their house that are underutilized.
One of the biggest questions that most people ask is, how can they make money from Airbnb? And like most property experts, I too had the same questions. So, I decided to interview a friend who runs several Airbnbs and create a blog on it. In this piece, I will be breaking down some ways you can make money from Airbnb even without owning a single property. As well as some strategies to gain an advantage over the competition.
how can you earn money on airbnb?
The Airbnb business has several ways to make money off it, and the majority of them don’t even require you to own your property. The best way you can tap into such a market is by identifying places you can add value and then getting the experience and capacity to serve this need.
1. Airbnb Arbitrage
The first way is called Airbnb arbitrage. This is where a person rents out a rental property, furnishes it, and then lists it on the Airbnb platform to rent it out to others. It is perhaps the most common way people in Nairobi do Airbnb. The alternative would be to buy the property before renting it out, which is quite expensive.
One thing you should seek to know before venturing into arbitrage is if your landlord allows it. Running it without consent can lead to legal consequences or even eviction.
| Advantages | Disadvantages |
| Cheaper than buying an apartment before renting it out | Potential issues with the main landlord |
| Flexible in terms of location | Capital-intensive to start due to furnishing costs |
| Ability to move easily to high-demand areas if markets shift | Can be time-consuming without a good manager |
2. Airbnb property Management
If you possess strong organizational skills and a keen attention to detail, managing Airbnbs may be a suitable career path for you. Airbnb managers are tasked with overseeing bookings, managing clean-ups, stocking the unit with supplies like toiletries, and handling guest communications. They are paid either a percentage of what the Airbnb brought during the month or a fixed agreed monthly pay.
Airbnb management has several advantages; you earn recurring income provided you do an exceptional job. You have minimal risk on the property, as you are just a service provider. As a manager, you can scale your income by having more properties under management. Having strong relationships with Airbnb owners who can hire you for management services is essential if you want to succeed at this. Airbnb hosts will also likely pick you if you have existing long-term clients who can rent out their properties.
3. Airbnb Photography
One notable thing about Airbnb is that the photos on the platform are always crisp-looking. This is not by accident. There are people who specialize in taking Instagrammable photos and videos to promote properties. If you are good at photography or videography, this could be another service that you add. The barrier to entry is not high, as these days, phones have some great cameras. And with a good portfolio, you can land well-paying clients. My recommendation is that you tie photography with another service like marketing to distinguish yourself. It will also make you irreplaceable, as you are providing more value.
How much money can i make on Airbnb?
If you are convinced about starting an Airbnb, then the second most logical question would be how much can you make on the platform? And the answer is that it depends on several factors. Some people make millions while others go bankrupt in the same business based on these differences.
i. Location — if you are in an area with high demand, then chances are you will make more money. To pick an attractive location, you have to do your research to determine where most guests are spending their time and why. For instance, my friend rents out her properties to expatriates that come to Kenya for business seasonally.
ii. Target customer — another differentiating factor is the type of clientele you are serving. Business people or staycationers will pay more compared to people looking to just party and leave.
iii. Customer service — the Chinese have a saying that goes, “He who doesn’t smile should not open a shop.” If you are not good at customer service and handling people, then this business is not for you. Customers are likely to come back and send referrals if they felt treated right in the first place.
iv. Financial management — Airbnb is like any other business; if you are not managing how much you make well enough to sort your expenses, you will run the business into the ground. If you struggle with numbers, seek assistance from someone who is proficient in this area. Alternatively, I have prepared a simple Excel sheet that should get you started.
v. Additional services—this is what people call cross-selling. You can make more if you add services like having a chef cook for your guests, etc.
What type of airbnb is most profiable?
Not all Airbnbs are the same. There is a type of Airbnb model that makes more money than the rest, and these are called Unique Short-Term Rentals. Most people looking to stay at Airbnbs are travelling for vacations, and they don’t want the typical ‘apartment’ vibe. That is why unique guest experiences like A-frames, container homes, or treehouses turn the most profits. The secret is to locate them near a tourist attraction.
Locating such an Airbnb in an area like Sagana with activities like water rafting, kayaking, and bungee jumping on the Sagana River can be very profitable. Your guests will typically want to spend more money on this unique experience. Furthermore, including some amenities in your place, like a fire pit or swing chairs, can add a premium to what you charge.
