Airbnb hosts who welcomed at least one guest in the first six months of 2021 earned an average annual profit of $9,600, according to Airbnb’s own data. What’s more, half of the site’s activated listings didn’t have to wait more than four days to receive their first reservation request.
That was before the omicron strain, but this winter’s surge of infections has so far not triggered anything close to a repeat of March 2020, when The Wall Street Journal reported that Airbnb lost $1.5 billion in bookings overnight. In fact, all signs still point to a notion that isn’t lost on aspiring real estate investors — it pays to own a rental property.
Make no mistake about it, the lingering pandemic is not making life easy for Airbnb hosts, but the status of Airbnb host is still the ultimate side hustle.
Make the Most of Your Money: How To Compound Your Income in 2022
There’s Gig Work, and There’s Airbnb
Earnest, a tech-driven fintech lender, recently released a report on the sharing economy based on data from tens of thousands of loan applications. It examined the profitability of nine of the most popular money-making platforms in the gig economy, including Uber, Lyft, DoorDash, Fiverr, Etsy and TaskRabbit.
Across all platforms, the average gig worker makes less than $500 per month, but one name stood out above all the others by far — Airbnb. Airbnb hosts earned more than triple all other workers, with nearly half earning more than $500 per month.
The monthly average for hosts was $924, blowing away No. 2 TaskRabbit, whose users average $380. A full 10% of Airbnb hosts earn $2,000 or more per month. On every other platform except TaskRabbit, either 0% or 1% made $2,000 per month.
In short, if the average person has the choice of working on the side or renting out a place, it isn’t really a choice at all.
The Pandemic Has Opened a Window of Opportunity
Because of 2020, conventional wisdom says that Airbnb will fall with every surge of the virus and rise again with a new release of pent-up demand when it fades. That seems to be changing.
Several news outlets have reported a shift in travel dynamics that’s trending away from short-term rentals and vacations in favor of long-term getaways booked by newly liberated remote workers.
According to Motley Fool, Airbnb has gained the most from this new evolution in travel and vacation culture. The company generated record revenue and profit in the third quarter of 2021 — but the balance sheet isn’t the only evidence that people now want more than the traditional getaway over a long weekend.
Airbnb’s third-quarter earnings report showed that long-term stays of at least 28 days were the company’s fastest-growing booking segment. In fact, 20% of all stays were long-term bookings in the third quarter, up from 14% in the third quarter of 2019 (skipping the fluke year of 2020).
In short, new hosts in 2022 can get in on the ground floor of a new and lucrative market based on extended working vacations, which simply never existed before.
Discover: 20 Hot Jobs That Pay More Than $150,000
So, What Can You Expect To Earn?
The industry site Hosty recently released its Best Cities for Airbnb Business in 2022 list, which factors in variables like occupancy rate, return on expense, standard daily price and local rules and regulations. The list’s authors remind prospective hosts that running an Airbnb business is hard, time-consuming, involves a lot of paperwork and can be frustrating. It’s all worth it though, of course, if it generates a reliable income stream.
So the obvious question is how much will you make? The answer — like just about everything else with real estate — is that it depends on your location.
The Hosty study cites the average monthly income in No. 1 Manhattan Beach, California, as $10,782. In No. 3 Key West, Florida, it’s $8,822. In No. 6 Long Beach, New York, it’s $4,670. In No. 17 North Canton, Ohio, it’s $3,810 and in No. 20 Milwaukee, Wisconsin, it’s $1,940.
Don’t forget that you have to pay to play. Airbnb takes a 3% cut, according to Wise, and cleaning costs, taxes, the cost of consumables like toilet paper, fees for licenses and permits, insurance fees and other miscellaneous expenses are all part of the cost of doing business.
More From GOBankingRates