Companies like Airbnb and VRBO make it easy for property owners to generate passive income, here's how.
The gig economy revolutionized nearly every aspect of our lives.
It changed the way we eat. It changed the way we get around. And it even changed the way we do errands.
One of the most revolutionary changes brought on by the gig economy is happening in the lodging and hospitality industry.
Hotels and hostels aren’t the only choices anymore. With apps like Airbnb and VRBO, travelers have a much wider range of lodging options.
You can book a night in a log cabin, a week on a houseboat, or even a month in a yurt. Depending on how much privacy you want, you can reserve a room in someone’s house (or even their couch), or an entire apartment for a night.
The perks don't just extend to travelers, it’s great for property owners too.
The sharing economy presents a new opportunity for anyone with a spare room or second home to earn extra cash. In fact, home sharing is one of the highest paying sources of passive income out there!
A brief look at the history, and future, of the new hospitality industry.
When Airbnb launched in 2007, the idea seemed a bit ridiculous.
Renting out your home to travelers? Sleeping in a stranger’s bed? Who would want to do that?
Flash forward to 2019 and Airbnb is worth at least $38 billion.
But how and why did the home sharing economy get so big?
Airbnb started to gain traction in 2009 when the American economy was in rough shape. That year, nearly 900,00 folks lost their homes to foreclosure, and almost 9 million people were laid-off or fired.
Needless to say, extra income was hard to come by.
Although Airbnb was founded a year earlier, the recession proved to be its big opportunity.
With their platform, anyone with some extra space could rent it out to travelers. Whether it was a full apartment, a spare bedroom, or even just a couch, they could post it to the website and offer it up to renters.
Simply put, Airbnb allowed people to capitalize on their unused space.
At the time, the travel industry was experiencing a downturn. Hotels, resorts, and cruise lines fell by 74% between 2007 and 2009. Most people didn’t have the funds for vacations, and those who did were traveling cheaply.
In comparison to the hotel giants, home sharing offered comfortable places at competitive prices.
Airbnb now has several competitors:
Each of these apps offers travelers a way to book non-traditional accommodations. Aside from HotelTonight, they also present a lucrative opportunity for people who want to rent their space out.
Find out how much money you can make by renting out your home or apartment.
The lodging industry is one of the most lucrative gig economy jobs out there.
According to recent articles, the world’s highest-paid Airbnb host earns roughly $15 million each year. Of course, most people don’t make that much (he owns 881 properties throughout London).
But, even if you’re not a real estate mogul, you still have the chance to make a few thousand bucks by renting out an apartment or two.
On average, Airbnb hosting brings in roughly $924 per month.
That’s not bad at all, especially considering that it is very passive. However, several factors affect a host’s bottom line:
All of these factors will increase or decrease your income.
For example, if you rent out a single room in your two-bedroom apartment, don’t expect to make thousands. You aren’t likely to earn as much as someone who rents out an entire residence, even if yours is in a nicer neighborhood.
People tend to want a private place, particularly if they’re traveling in groups. So, entire houses do better than single rooms and couches. Guests usually pay more to have the house to themselves.
And remember: All three of the platforms charge a hosting fee.
For example, HomeAway’s fee is $349 per year. This allows hosts to list their property on the site. VRBO, on the other hand, charges $499 per year for the same service.
Both companies also offer a per-booking fee. If hosts don’t want to pay the annual premium, they may opt to hand over a certain percentage of their income for each booking. HomeAway’s booking percentage is 10% while VRBO’s is 8%.
Airbnb works strictly on a per-booking basis. They charge hosts 3% for every stay booked.
At the end of the day, how much you can make through home sharing depends on the quality of your property, the location, and how often it is rented out.
In order to list your property on a home sharing service, you'll need to meet these basic requirements.
It’s not hard to become a host. Whether you’re listing on HomeAway, VRBO, or Airbnb, most people can sign up and start booking guests within a few days.
There are more than 4 million listings worldwide on Airbnb alone, which shows you that a lot of people are approved hosts.
However, there are a few stipulations.
To sign up and become a host, you have to meet a couple of requirements
Rental accommodations come in all sizes, shapes, and styles. One of the reasons why customers prefer Airbnb and other platforms over hotels is that it allows them to stay in a unique property.
So, there are no style or size requirements when it comes to renting your property on an app. You can rent a single room or a whole estate.
But, there are a few basic requirements you have to meet.
For all the leading lodging companies, the requirements are as follows:
Must provide basic amenities: All rentals should be stocked with soap, toilet paper, and sheets. You also need to provide at least one pillow and towel per guest.
Must accept reservations: You can’t sign up if you don’t plan on listing your place. You must accept bookings at least a few weeks each year if you want to remain on the platform.
Must respond to customers: Hosts should respond promptly to all customer inquiries. You are required to respond to reservation requests within 24 hours. If a customer reports that you failed to respond to them, you may receive a warning from the platform.
Minimal cancellations: Hosts are penalized for canceling reservations. Once a guest books their reservation, they depend on the host to house them during their trip. Platforms may ban you if you cancel on your guests.
Keep your rating up: Airbnb, HomeAway, and VRBO all depend on happy customers. So, you must maintain a high rating to show that you provide quality accommodations. If your rating falls too low, the platform might remove your listing.
As long as you fulfill those criteria, the platforms are happy to work with you.
Here's how to get started as an Airbnb, VRBO, or HomeAway host.
Hosting travelers is a fun way to make some extra money.
You get to meet all kinds of new people and earn income without having to do too much work.
Although it’s not necessarily passive income (you still have to maintain the house, etc), it definitely requires less effort than other gig-based jobs.
Airbnb, VRBO, and HomeAway all operate differently, and they all have slightly different signup processes.
However, they are very similar. If you are approved as a host by Airbnb, you can probably also become a HomeAway host.
The only significant difference is that VRBO focuses exclusively on entire houses. They don’t let their hosts rent individual rooms.
Below, we’ll explain how to list your house or apartment on Airbnb. You can follow these instructions to sign up for the other platforms, too:
Before you list your site, make sure you’re ready to have guests over. You could have guests within a few hours if they find your listing right after you post it!
Learn tips and tricks to optimize your property listing to earn more money as a home sharing host.
A successful host takes the initiative and treats their lodging gig like a full-time job.
Here are a few things you can do to put more money in your wallet:
Concerts, sporting events, and other big occasions are huge for hosts. During an event like the Super Bowl, the demand goes up.
Raise your prices when large events are in town, and you'll earn far more than you would during other times of the year.
If it’s your only property, make sure you have somewhere else to stay. Renting out the whole place will increase its value.
A clean rental is essential to keeping your ratings high. No one wants to stay in a dirty apartment.
But, all of that cleaning, vacuuming, and scrubbing takes time. If this is your side gig, you may not have the bandwidth to clean up after every guest.
We recommend you hire a pro. Every time someone checks out, the cleaner will come over and pick up.
It’ll dig into your earnings a little bit, but your high rating will earn you more guests.
Don’t just sit there and wait for people to book your place--promote it!
A few Facebook, Twitter, or Instagram posts let people know that you’re home is open for booking. Then, if one of your followers knows someone headed to your city, they may recommend it.
The more people who know about your listing, the better your chances are of keeping it occupied.
To make your listing stand out, consider hiring a professional photographer to take pictures of your home or apartment.
If you have the equipment and the know-how, you can do it yourself.
Fill your photos with natural light to highlight what makes your rental special.
Looking to save some money on your next property rental? Take advantage of these lodging promo codes.
Gig workers love deals. Luckily, there are a ton of promo codes that can help you earn (and save) money in the lodging industry.
We’ve compiled a few methods you can use to save money while you travel. Hopefully, these will help put a few extra bucks in your pocket.
You can earn free Airbnb credits by getting other people to book trips or sign up as hosts. Here’s what you do:
If your friend opens the email, clicks the link within it, and books a trip, you’ll get $20!
Plus, they get $40 off a $75 reservation, which is a great incentive for them to sign up.
And if they become hosts themselves, you’ll get $75.
HomeAway does not offer promotion codes. But there are several ways to saves to save on HomeAway without a promo code.
If you’re in the market for a traditional hotel room, you may want to check out HotelTonight.
This app helps you find the best deals on last-minute hotel bookings. It allows hotels to post their unused and canceled rooms for a discounted rate.
Even better, you can save $25 on your first booking by using a HotelTonight promo code.
Here’s how to save:
$25 will be credited to your account!
This code only works for first-time users. If you’ve already booked a room, it won’t work for you.
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