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What Airbnb Profit Can a Host Make in 2025?
As travelers, we embraced the Airbnb platform long ago, and booking an "Airbnb" has become a regular part of our lives. What started as an alternative lodging option has turned mainstream.
Airbnb's Q4 revenue increased by 17% year-over-year, so they still expect to see their most profitable fourth quarter to date. In its Q3 2024 financial review, the company stated that its goal is to retain existing hosts and attract new ones, so they have prioritized making hosting easier. They openly said their goal is to turn hosting mainstream.
But here’s the big question: Should you be concerned about the potential increase in competition among hosts and the numerous Airbnb listings? How much can an Airbnb host really make these days?
Let’s unpack what profit can look like for your short-term rental business.
A Profitable Airbnb Business vs. a Side Hustle
As long as the overall number of bookings keeps rising (and it is), Airbnb will be a profitable venture. However, it's now a mainstream business that requires a different approach compared to the days when the platform was in its rapid growth phase.
What’s your ultimate goal? Not just in terms of rental income but also your lifestyle. Is renting out a room or a second house a way to earn extra income, and you see it as a profitable side hustle? Or perhaps you’re approaching it as a full-fledged business owner and investor?
Your answer to this question will determine your revenue expectations. Even if you’re renting out just one room, you can adopt an investor’s mindset. That’s exactly how some successful Airbnb hosts started building their portfolios.
Understand Market Saturation
The profitability of an Airbnb property is highly location-dependent. You need to define your target market carefully. Your property's performance is closely tied to its specific neighborhood, city, and region. Market saturation occurs when all potential customers are already being served, the total available demand has been fulfilled, and new competitors can only gain market share by taking it from existing ones.
In simpler terms, saturation happens when the number of active listings exceeds guest demand. Ideally, you want to enter a growing, unsaturated market with steady or increasing demand. Keep in mind that supply and demand are typically dynamic and constantly changing. Even in competitive markets, you will succeed if your listing stands out from the crowd.
There are numerous ways to distinguish yourself and gain visibility in Airbnb's algorithm - from unique design and premium amenities to exceptional customer service. Market demand impacts your Airbnb profit, but it’s not the only factor—your approach to business will impact it too.
What Are the Average Gross Earnings for Airbnb Hosts?
The short-term rental model generates more revenue compared to traditional long-term rentals. As we mentioned earlier, the revenue potential of your property heavily depends on its location.
It’s no secret that tourism and an influx of visitors make a location desirable for Airbnb. For example, in the Yellowstone National Park area, the average annual revenue for short-term rentals is around $70,800, according to AirDNA. This figure is well above average.
However, this number alone doesn’t make it the best market due to high competition from other Airbnb listings, established lodges, and hotels. Additionally, many accommodations are pricing out average travelers. Seasonal fluctuations, maintenance costs, and regulatory challenges also play a significant role.
According to official data from Airbnb in 2023, the typical host in the U.S. earned approximately $14,000 annually, or about $1,167 per month. This suggests you could easily aim for more than $3,000 per month (depending on the location and type of your property).
For instance, in Tampa Bay, FL, the average annual revenue is $34,900, which translates to roughly $2,908 per month, based on AirDNA data.
Jacksonville, FL, presents an even more promising opportunity, with an average annual revenue of $46,300, or about $3,858 per month. In fact, Jacksonville is currently considered a growing Airbnb market, especially because property prices are significantly lower than in most popular Florida destinations like Miami.
How Much Income Is Left After All Costs Have Been Subtracted?
Besides gross income, you also need to estimate your net income. Net income for an Airbnb property is calculated by subtracting all operating expenses from the gross revenue.
It sounds straightforward, but in the short-term rental space, managing costs requires extra attention. This means keeping operating expenses as low as possible while maintaining quality.
Of course, there are some expenses you simply can't skip. Besides utilities, you’ll need to budget for WiFi, cleaning crew fees, insurance, occasional maintenance, and wear and tear.
So, how much of your income typically goes toward expenses?
Airbnb Expense Breakdown
To help you organize your financial plan and better understand the profit your property generates, we compiled a list of common monthly expenses based on pre-tax amounts.
Note: These are base average prices; your property and location dictate the costs.
Airbnb fees: 3% or 14% of your daily rate
Cleaning fees: $20 to $50 per hour
*Note: You typically charge guests a cleaning fee, which covers the cleaning cost.
Utilities: From ~$270 per month
*Water, gas, electricity, trash and recycling
Internet, cable, and streaming services: From ~$100
STR Insurance: From ~$100-$150 per month
Landscaping: $4 – $12 per square foot
HOA fees (if applied): From ~$100-$300
Supplies: ~$30-$50
*toiletries, kitchen essentials, coffee, tea, and sugar packets, bottled water, snacks, light bulbs
Regular Maintenance Budget Allocation: From ~$120
*Note: It's up to you—you won't need to call repairmen every month, but you should plan for maintenance costs and repair.
How Can I Estimate Airbnb Income?
To estimate your property's earning potential, start by analyzing your neighborhood and surrounding area. The basic calculation can also be done manually, and you'll want to consider several key factors.
Calculate the monthly income of comparable listings in your area over the course of a year. This is crucial because seasonality significantly affects rental occupancy and income. Is a highly profitable peak season enough to offset slow months? Additionally, research the average occupancy rate in your area, as this indicates rental demand and market health.
Armed with these figures, you will get a realistic picture of potential earnings.
Pro Tip: Set the Pricing Right
Think of Airbnb's pricing strategy like a skilled surfer riding ocean waves. Just as a surfer must constantly adjust their position based on waves, tides, and weather conditions, a successful Airbnb host needs to dynamically adjust their pricing based on market conditions, seasonal trends, and local events.
Average daily rates in the area will help you determine your base price. Investors also use dynamic pricing tools to automate this process.
Key Factors Impacting Airbnb Profit
Let's recap what factors influence and determine your profit.
Location and Property Type
Location is a non-negotiable factor when considering Airbnb revenue. While local attractions and touristic destinations are important, identifying underserved market niches can also boost your success. Sometimes, this means turning what might seem like a location disadvantage into a unique selling point.
For example, a property in a former industrial area could be transformed into a trendy loft that appeals to photographers and artists. Agricultural properties can tap into the growing "farm stay" trend, where guests pay premium rates to experience rural life. One creative host converted an ordinary backyard shed into a popular stargazing cabin with a glass roof, showing how a unique experience can command higher rates than traditional accommodations.
Seasonality
While tourist destinations have obvious peak seasons, urban areas experience more nuanced demand patterns that savvy hosts and locals can leverage.
Cities rarely have true "off-seasons" like vacation destinations, but rather multiple micro-seasons tied to business cycles, events, and cultural calendars. Consider how corporate earnings seasons bring quarterly business travelers, or how university areas see spikes during graduation, parent weekends, and academic conferences.
Property Management
Having a property management company do the job for you can cut into your earnings if the profit is barely average. However, if your profit is exceptional, it can be beneficial for both sides. Consider that management companies for STRs typically take 10-30%."
Guest Experience
In Airbnb's 2024 financial results, the company and Airbnb co-founder Brian Chesky reported that since launching their updated hosting quality system in April 2023, they had removed over 200,000 listings that failed to meet guest expectations.
Hosts must elevate their offerings from essentials to non-negotiables like upgraded amenities and guest-focused design. Ensure that both your property and guest communication are top-notch.
Factors that Indirectly Affect Airbnb Income
Zoning laws, restrictions, and economic downturns are external factors that could impact Airbnb's profitability, yet they remain entirely outside a host's control. Local zoning laws and restrictions dictate how properties can be used, with some areas banning short-term rentals altogether or limiting the number of rental days allowed per year.
Tried and True Tips for Airbnb Revenue Growth
There are also factors that hosts can fully control, which will significantly impact their revenue.
Optimize Listing
Don't underestimate the power of compelling descriptions and professional photography to instantly boost bookings.
Gain Superhost Status
Those who go above and beyond guest expectations can also command higher nightly rates. Achieving Superhost status signals reliability and exceptional service and makes your listing instantly more appealing to potential guests.
Diversify Platforms
An STR business doesn't need to rely on Airbnb alone to drive bookings. Platforms like VRBO or Booking.com can significantly support your revenue growth. By expanding your presence across multiple platforms, you can reach a broader audience and reduce the impact of any single platform's fluctuations.
Allow Monthly Stays
Monthly bookings are a type of long-term stay that can drastically reduce guest turnover and provide income consistency. On Airbnb, it's a quick process—just a few moments to enable monthly stays and set discounted prices to incentivize bookings.
Did you know that with iGMS, you can automate a major part of guest communications and assign cleaning tasks to specific crew members with just a few clicks? You can also drive bookings from all platforms and never worry about double bookings again. Discover what else automation can bring to your growing Airbnb business.
