Start an Airbnb Business

If you aren’t familiar with Airbnb, it’s an online marketplace that offers properties to rent for lodging, vacationing, tourism, and homestaying. The website offers listings for short-term rentals and long stays. Airbnb properties can include single-room units with their own or shared bathrooms, full-sized apartments, an entire house, and even RV sites. 

Airbnb has grown to become a profitable venture for business owners renting rooms and/or properties to customers, especially in areas that are high in tourists and vacationers. This business can work in your favor since a vast majority of people will always be in need of finding a comfortable place to stay without wanting to pay a high price for little comfort and privacy. 

Why start an Airbnb business?

If you’re wondering how to start an Airbnb business, then there are many things to consider. In addition to the points mentioned above, starting an Airbnb business allows you to set the price you want for nightly rates or longer periods. It also lets you to earn some extra income if you already have a full-time career. 

The website also allows you to list for free, although there are some fees when it actually comes time to rent. Remember, though, that the potential for securing many clients throughout the year can make these fees worth it. And with positive reviews, you’ll become a trusted renter, growing your business further. 

Another reason to start an Airbnb business is that guests are always on the lookout for a more relaxing and comfortable home-like location. And perhaps best of all, the website offers protection that can cover up to $1 million in damages for your property.

If you’ve decided to take that leap and open an Airbnb business, then here are 10 helpful steps. 

Step 1: Plan Your Airbnb Business

You’ll have to create a business plan first. No matter if your business will be a sole venture or if you’ll be running it with others, you will have to decide on the business structure. Consider the following questions:

These will all be handled by you if you plan to run things alone, but if you have a team, you’ll need to sit down and discuss the merits of each role and how much work each position will require. 

Additional questions to consider before opening an Airbnb

A few other questions to think about include:

Step 2: Decide Your Budget

If you decide to purchase a property for your Airbnb business, then consider the costs, insurance, taxes, utilities, and mortgage (if applicable). In addition to calculating rental costs, you’ll want to consider other expenses that come with renting, such as linen and towel costs, and outfitting the property. If you decide to offer meals, then a grocery budget will also need to be considered. 

Step 3: Choose Your Rental Market

Before you start an Airbnb business, one of the most important things to consider is who your rental market will be. It’s best to make this decision based on your location. If your property is near popular attractions, then people looking for a vacation rental will probably be your primary client base. If the property is near a corporate hub, then business travelers will be popular clients.

Step 4: Name Your Airbnb Business

All business owners should create a catchy and memorable name for their company. There’s no harm in doing some research to see what other similar businesses are calling themselves to get some ideas. It’s a good idea to name yours based on your location or the type of renters you’re looking for.

Adding your own name to the title gives it a personal touch as well. Something like “Samantha’s Hosting Company” or “David’s Beach Getaway” can work. 

Businesses come in different forms and structures, and deciding what yours will be will take time and consideration. Many Airbnb hosts choose the limited liability company (LLC) structure since it offers various protections for personal property. If you’re a real estate investor that happens to own many Airbnb rentals, then you can put all of your properties under a single LLC entity. We can help with our LLC Formation Service.

Step 6: Register Your Airbnb Business for Taxes

Like with any business, you’ll have to pay taxes for your Airbnb business. Real estate taxes are a given as is the case for everyone that owns real estate properties. You’ll also be subject to sales taxes and even a local occupancy tax. The latter is typically known as a hotel tax. Get in touch with an accountant for help with this. 

Step 7: Get All Necessary Permits and Licenses for Your Airbnb Business

You’ll need to make sure that your business has all necessary permits and licenses. Since you’re running a rental business, you’ll need a business license. This might also be called a Lodgers Tax License or a Transient Occupancy Tax (TOT) certificate. You’ll have to register your Airbnb business with your local county agency that collects hotel taxes. 

One thing to know is that Airbnb businesses cannot operate in areas where local zoning laws prohibit them from using properties for short term rentals. 

Step 8: Open a Business Bank Account

Having a business bank account is important since it makes tracking your business expenses easier and streamlines your tax work. If your Airbnb rental generates over $20,000 a year or if you conduct over 200 transactions through the business, then Airbnb will send you a 1099-K form. 

When the time comes to do your taxes, you can deduct certain expenses like fees charged by Airbnb. These include reservation fees, which can be up to 20% depending on your property’s nightly rental cost. The bottom line is that having a business bank account instead of a personal one makes your business taxes easier to complete. 

Step 9: Buy a Property if Needed

An Airbnb business doesn’t require you to purchase property. You can use your own, but if you decide to avoid this, then you’ll have to do some homework and research. You can start off by checking out some Airbnb real estate in your area.

This will give you an idea of the size and amenities they offer. You can also see what feedback customers are leaving. Are they saying it was spacious, cramped, old, or if it needed remodeling? Take all of these into account when finding a property. You’ll definitely want to make sure that it’s near local attractions and hotspots, too. 

Step 10: Set Your Airbnb House Rules

As the host and property owner, you can set any rules you’d like. Just be sure that they’re fair and agreeable. You can also decide if pets will be allowed, how many guests can stay per unit, and list check-in and check-out times. It’s also a good idea to set a rule for quiet periods so certain gusts don’t disturb others during the evening and early morning. 

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How Airbnb Hosting Works

Airbnb is a customer service-centric business model. In order to stay in business and attract future guests, you’ll have to run your operations like a hospitality business. Guests will check in, allowing you to meet them and get a better feel for how to keep them happy with their stay. Payments for your rentals will be made through Airbnb.  

Positive feedback is an important incentive to keep guests happy, so be quick to respond to their needs and questions. Keeping your property spotless is also important as are following COVID-19 protocols. These are musts to do business with Airbnb. 


Once you learn how to start an Airbnb rental business, you can add a steady stream of income every month. You just need to learn how Airbnb hosting works and plan ahead. Just like starting other business types, if you want to get an Airbnb started, you begin with a detailed business plan. Then follow the rest of our steps to dive into the world of short-term rentals.

How We Can Help

Now you know the steps to start your Airbnb. We can help with our fast, easy formation services. We will handle formation for you, so you can get prepared to run your business. Then, once your business is up and running, we offer worry-free compliance and other services to help your business grow. 

Starting an Airbnb Business FAQs

  • Can you start an Airbnb business without owning a house? 

    Yes, you can start an Airbnb business without a house. You can use different residential properties or purchase one to use only for renting.

  • What kind of host should I be for Airbnb?

    The Airbnb website has a list of requirements for being a great host. These include being responsive, accepting trip requests, avoiding canceling guest reservations unless absolutely necessary, and doing everything you can to ensure a high-level rating.

  • What are some insider tips for making the most money with Airbnb?
    • Be honest and detailed in your listing.
    • Be fair with your pricing.
    • Always put the customer first, even when they’re difficult.
    • Have a quick response rate
    • Have a plan B for the unexpected, like cancellations. Be open with the customer and try to make things right.
    • Always leave reviews for guests, even if they’re negative.
    • Keep track of all your expenses.
  • Does Airbnb hosting work? 

    Airbnb hosting works and can be a profitable hospitality business since there will always be a market for people searching for comfortable lodging.

  • How much does it cost to start an Airbnb business? 

    This depends on different variables, like whether you plan to purchase a property to rent out. If you plan to use your own property, then you may need to do some construction work to give the rented room(s) more privacy or to add a new bathroom. You’ll also need to consider food and cleaning costs. But if you already own the property, you may be able to start an Airbnb business with no additional money.

  • How much do I make with Airbnb? 

    Overall, the final amount you make will depend on your profits minus the costs to run the business, like maintenance and cleaning. Airbnb also charges a percentage to use their service. This is where a business plan and business banking account will come in to let you know what your profit margin is.

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