How to Earn Passive Income as an Airbnb Host

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If you’ve been thinking of becoming an Airbnb host, America’s current economic woes may be giving you pause. And that’s understandable. As inflation concerns lead people to make thriftier choices in their lives, it stands to reason that a luxury like travel might be falling by the wayside. But, perhaps surprisingly, that’s not the way this appears to be playing out.

A recent survey from The Vacationer revealed that 80% of Americans are still planning some summer travel this year, inflation or no inflation. So how does this compare to last year? At least 35 million more Americans are expected to travel this summer than last. After pandemic lockdowns and everything else people have endured over the past couple of years, it doesn’t look like we’re planning to label vacations as a luxury item anytime soon.

Image source: Getty Images.

That’s great news for anyone thinking of getting into the vacation rental game. For many, though, their other big concern is how they would make time to take care of that investment.

But what if you didn’t have to? Let’s consider what it takes to earn passive income as an Airbnb host.

Find a great property manager

When you think about owning a vacation rental property, you might cringe at the thought of handling things like tenant questions and complaint calls and staying on top of all the maintenance and repairs your property will need over time. With so many tenants in and out of your vacation home every month, there’s really nothing passive about keeping all that in motion.

A vacation rental property manager can take your Airbnb investment from feeling like a full-time job to the passive investment you were most likely looking for. From arranging for the cleaning to fielding tenant complaints and questions and making sure maintenance and repairs are properly handled, a property manager can keep your vacation rental property running smoothly, tenant after tenant.

While rates can vary widely, vacation rental property managers charge 25% to 30% of the rent on average. This is compared to an average of 10% charged by long-term rental property managers. The higher rate for short-term rentals makes sense when you consider how much more demanding the much higher turnover makes that role. 

Is earning passive income as an Airbnb host worthwhile?

According to short-term data analyzer AirDNA, vacation rental hosts hit their highest average annual revenue ever in 2021 with $56,000. That figure is expected to drop about 5% this year as supply increases and rates decline, but to then stabilize and see a further increase in 2023. And with current surveys suggesting that inflation and high gas prices are doing little to impact America’s travel plans, it looks like those projections are likely to hold up to some pretty hefty economic headwinds.

If you’ve been avoiding short-term rental investing because it sounds like a lot to take on, you’re not wrong. There are a lot of moving parts involved in keeping a vacation rental afloat and ensuring happy guests and glowing reviews. That’s why an experienced, reputable vacation rental property manager can be well worth the fees they charge.

If you own or find a property that you think might make a fantastic vacation rental, crunch the numbers and see whether vacation rental hosting might be a worthwhile endeavor even with a property manager on the payroll. You might find that Airbnb hosting can be a day at the beach after all.

Nell McPherson has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Airbnb, Inc. The Motley Fool has a disclosure policy.





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