Secrets Of Running A Six-Figure Airbnb Business

Renting rooms on Airbnb can be a pretty good business, even if that’s not how the company really wants you to think of it.

It’s easy to tell that nobody actually lives here.

The bedroom is furnished with matching dark-wood Ikea furniture. The large, empty closet is occupied only by a handful of hangers pushed to one side and an ironing board that doesn’t look like it’s ever been used. In the kitchen, there’s a cutting board; two wine glasses and two tea cups; four plates, four glasses, four bowls, four forks, four knives; and three spoons.

But that’s just about it.

My Airbnb host is leasing three apartments just like this one, all in the same building. He posts two of them on Airbnb, as he does with two other apartments in two other buildings. The third he just acquired, so he’s busy setting it up. When he’s done, he will have a total of six apartments listed on the short-term rental site that has been used by more than 4 million guests.

A few years ago, my host—whom I agreed to to call "Bradley" (his choice) for this article—moved to San Francisco for a job as an options trader. He was laid off eight months later, about the time computer programs started making the same decisions he made in a fraction of the time. So he went to work for himself. Now he wakes up on New York time, about 5:00 a.m. in San Francisco, makes trades until the early afternoon, and spends the rest of the day checking people in, doing laundry and cleaning apartments for his next Airbnb guests. For this part-time job—he spends a few hours per day on it—Bradley could make a six-figure income next year.

Airbnb insists it's not a hotel. Even while admitting that its hosts should be responsible for hotel taxes. While defending itself in New York City—where the attorney general demanded user data on 15,000 hosts in order to crack down on "illegal hotels"—the company pointed press to a survey showing, at least by its own measure, that 87% of Airbnb hosts are the primary residents in the homes they rent out to guests. In San Francisco, it’s 90%, according to another survey.

But among the other 10% are people like Bradley, who very much sees being an Airbnb host as a business. "With trading, you look for arbitrage opportunities, where you have an opportunity to buy things for cheaper and sell them for more," he says. "In the same way, I was like, I can rent apartments for $2,000 a month, but if I were to rent them on Airbnb, I get $150 a night."

At 90% occupancy, Bradley can make about $4,000 per apartment on Airbnb. He pays about $2,000 of that in rent and utilities. That comes out to about $2,000 profit per apartment per month, or $24,000 each year. With six apartments, he could make up to $144,000 in a year.

Getting Started

Bradley has never stayed in an Airbnb apartment as a guest. He got the idea to start an Airbnb hotel from his ex-girlfriend, who used to stay at his apartment most nights and rented out her own apartment for extra income. "I was like, wait a second, ‘you’re pretty much living here, you’re not paying a split of rent, and you’re making a profit off your place,'" he remembers thinking. "I could recognize who the fool was in that situation." His next though was: "Why don’t I do that?"

In the first four months, he rented four apartments. Most of them were in an apartment building owned by a family friend, who knew of his business plans. Others were in small buildings that were unlikely to have live-in landlords. He was careful not to sign leases at two apartments managed by the same company, which would inevitably raise a red flag.

He purchased four apartments worth of furnishings from Ikea, because the furniture maker charged a flat $85 for delivery no matter how much was in the order. In the end, each apartment cost about $8,000, with deposit, to set up.

At first, business was great. All of his units were full most of the time, and he was earning back his investment. He figured he would rent another apartment every month, and have 12 of them by the end of the year, enough to comfortably quit his day job.

Then January hit. Hotel prices dropped enough in San Francisco to reduce demand for Airbnb alternatives, and Bradley took a $6,000 loss. "That’s when I slowed my roll," he says. But he didn’t stop. He rented two more apartments over the next eight months.

Making A Living In The Sharing Economy

Aware that I am staying in an apartment maintained by a young, single man, I am surprised one morning to discover a hairdryer under the sink. "I try to put in everything that a hotel would," he says. This philosophy also explains the $4 coffee maker ("I don’t think anyone has ever used it, but people notice that you have it"), the iron, and the single piece of artwork in the apartment, which is a bright graphic image of a phone with a cartoon bubble that says, "SLAM." Bradley used to put Banksy prints in his apartments, but nobody noticed. "I think that one was $10 at Ikea," he says.

Running an Airbnb hotel doesn’t necessarily come with the freedom you might think. "Even though it’s easy, it’s still a hustle," Bradley says. "You have to be on top of it. You have to respond to all your inquiries. You have to run it like a business."

Bradley sometimes pays a woman who he refers to as his "assistant" $50, plus tip, to clean apartments and $25 to check people in. But he tries to do as much of the cleaning himself as possible. He notices things that need to be fixed when he cleans.

None of his guests has ever trashed an apartment during their stay. Some people are just messy, leaving, for instance, puke residue on the toilet seat or pizza sauce on the duvet cover. Guests have asked him on dates, he says (he declined). Others have shown up with obvious plans for extra-marital affairs. But even after hosting about 200 guests, there’s not been anything too weird. "No meth labs," Bradley says.

Staying Legal

In New York, a man named Nigel Warren was recently fined $2,400 for renting his room on Airbnb for a few days. Eventually, with the help of Airbnb, he won an appeal of the fine on the argument that his roommate was home at the time. Others, like Fast Company's Chris Dannen, have faced similar fines for renting out space in their apartments. But the question of whether or not Airbnb is legal remains confusing.

Laws about renting out an apartment for a short-term stay vary by city. A law in New York, for instance, makes it illegal to rent an apartment for less than 30 days if the owner is not around. There’s a similar law in San Francisco. City officials who argue that Airbnb is illegal cite public safety issues and regulations that hotels must follow, and they argue Airbnb hosts owe occupancy taxes, which assure tourists pay their fair share for police, street cleaning, and other public services they use while in town.

This month, Airbnb said it was willing to help collect hotel taxes in San Francisco and New York (San Francisco ruled Airbnb landlords were responsible for paying the taxes back in April). "While the laws in San Francisco and other cities can be confusing and even contradictory, we are eager to work with policymakers to clarify the laws and make them more fair, and to help cities collect any and all applicable taxes," Airbnb said in a statement provided to Fast Company.

In a blog post after Warren’s court victory , Airbnb CEO Brian Chesky emphasized that Airbnb renters are mostly people who don’t treat Airbnb as a business. "They include hosts like Teya, a student who loves cooking for her guests and will use the money she has earned on Airbnb to buy her apartment in Harlem. Or Javier from Brooklyn, who works in the restaurant business and likes to show off his favorite Latin dance spots to travelers from every corner of the globe. And hosts like Lauren and her husband who are using the money they earn on Airbnb to pay off their student loans," he wrote. "We all agree that illegal hotels are bad for New York, but that is not our community."

From Bradley’s perspective, however, there isn’t any harm being done by the small percentage of Airbnb hosts using the sharing economy as a way to turn a profit. The apartment owned by his family friends is happy to have him as a tenant, even with the Airbnb business. He’s shown them every aspect, from his profile page to how he checks people in. "They said, it looks really good," he says. "It actually looks like you take better care of the units than our other tenants."

The other landlords don’t know. "But," he says, "I pay my rent on time every month, and they haven’t gotten complaints." Not all Airbnb hosts are so lucky.

Airbnb installed a pop-up window on its site to remind hosts that they should follow their local laws when they register, and Bradley plans on paying San Francisco’s 14% hotel tax (that's on top of the 3% that Airbnb charges for payment processing). Airbnb sends its hosts 1099s so they can pay taxes on what they earn, and he also plans to pay income tax on his Airbnb revenue.

Bradley doesn't follow the controversy too closely, but he isn't too worried about it, either. "I think San Francisco is a big advocate of embracing its own tech companies and welcoming the disruptive technology," he says.

But still, he tells me later, "Please don’t break your leg in my apartment."

[Image: Flickr user Porsche Brosseau]

Add New Comment

69 Comments

  • Purva Sharegistry

    I am a private lender, i offer loan at 3% this is a legitimate company with honor and difference we are ready to help you out in any financial problem that you are we offer all type of loan so if you are interested in this loan offer kindly contact us on our email urgentloan22@gmail.com

  • Purva Sharegistry

    I am Dr.Purva Sharegistry, a private money lender. I give out loans with an interest rate of 3% per annual and within the amount of $1000.00 to $500,000,000.00 as the loan offer. 100% Project Funding with secured and unsecured loans are available. We are guaranteed in giving out financial services to our numerous clients all over the world. With our flexible lending packages, loans can be processed and funds transferred to the borrower within the shortest time possible. We operate under clear and understandable terms and we offer loans of all kinds to interested clients, firms, companies, and all kinds of business organizations, private individuals and real estate investors. Just complete the form below and get back to us as we expect your swift and immediate response. EMAIL : urgentloan22@gmail.com

  • Purva Sharegistry

    I am Dr.Purva Sharegistry, a private money lender. I give out loans with an interest rate of 3% per annual and within the amount of $1000.00 to $500,000,000.00 as the loan offer. 100% Project Funding with secured and unsecured loans are available. We are guaranteed in giving out financial services to our numerous clients all over the world. With our flexible lending packages, loans can be processed and funds transferred to the borrower within the shortest time possible. We operate under clear and understandable terms and we offer loans of all kinds to interested clients, firms, companies, and all kinds of business organizations, private individuals and real estate investors. Just complete the form below and get back to us as we expect your swift and immediate response. EMAIL : urgentloan22@gmail.com

  • Purva Sharegistry

    I am Dr.Purva Sharegistry, a private money lender. I give out loans with an interest rate of 3% per annual and within the amount of $1000.00 to $500,000,000.00 as the loan offer. 100% Project Funding with secured and unsecured loans are available. We are guaranteed in giving out financial services to our numerous clients all over the world. With our flexible lending packages, loans can be processed and funds transferred to the borrower within the shortest time possible. We operate under clear and understandable terms and we offer loans of all kinds to interested clients, firms, companies, and all kinds of business organizations, private individuals and real estate investors. Just complete the form below and get back to us as we expect your swift and immediate response. EMAIL : urgentloan22@gmail.com

  • Purva Sharegistry

    I am Dr.Purva Sharegistry, a private money lender. I give out loans with an interest rate of 3% per annual and within the amount of $1000.00 to $500,000,000.00 as the loan offer. 100% Project Funding with secured and unsecured loans are available. We are guaranteed in giving out financial services to our numerous clients all over the world. With our flexible lending packages, loans can be processed and funds transferred to the borrower within the shortest time possible. We operate under clear and understandable terms and we offer loans of all kinds to interested clients, firms, companies, and all kinds of business organizations, private individuals and real estate investors. Just complete the form below and get back to us as we expect your swift and immediate response. EMAIL : urgentloan22@gmail.com

  • barryhamiltonfunds

    Have you all kinds of economic problems? Need a loan to pay down debt? you are in an economic crisis? trust us to treat all types of loans, see below. We are registered and authorized company to issue a loan at 3%, with a minimum duration of six months and a maximum duration of 30 years. We give loans to a minimum in 2000 to a maximum of 50 million. offers various services BELOW Personal Loans (Secure and Unsecured) Business Loans (Secure and Unsecured) Improvement Inventor Loans Auto Loans Marriage * Mortgage Loan health, etc .. So if you are interested, please come back to us via our email: barryhamiltonfunds@yahoo.com with God all things are possible.

  • barryhamiltonfunds

    Have you all kinds of economic problems? Need a loan to pay down debt? you are in an economic crisis? trust us to treat all types of loans, see below. We are registered and authorized company to issue a loan at 3%, with a minimum duration of six months and a maximum duration of 30 years. We give loans to a minimum in 2000 to a maximum of 50 million. offers various services BELOW Personal Loans (Secure and Unsecured) Business Loans (Secure and Unsecured) Improvement Inventor Loans Auto Loans Marriage * Mortgage Loan health, etc .. So if you are interested, please come back to us via our email: barryhamiltonfunds@yahoo.com with God all things are possible.

  • Clara Andrews

    Hello Every One, I am mrs Clara Andrews from Califonia U.S.A, I quickly want to use this medium to shear a testimony on how God directed me to a Legit and real loan lender who have transformed my life from grass to grace, from being poor to a rich woman who can now boast of a healthy and wealthy life without stress or financial difficulties. After so many months of trying to get a loan on the internet and was scammed the sum of $5,200 i became so desperate in getting a loan from a legit loan lender online who will not add to my pains, then i decided to contact a friend of mine who recently got a loan online, we discussed about the issue and to our conclusion she told me about a man called Mr Bill Copeland who is the C.E.O of Bill Copeland Loan Company So i applied for a loan sum of (420,000.00USD) with low interest rate of 2%, so the loan was approved easily without stress and all the preparations where made concerning the loan transfer and in less than two(2) days the loan was deposit

  • Clara Andrews

    Hello Every One, I am mrs Clara Andrews from Califonia U.S.A, I quickly want to use this medium to shear a testimony on how God directed me to a Legit and real loan lender who have transformed my life from grass to grace, from being poor to a rich woman who can now boast of a healthy and wealthy life without stress or financial difficulties. After so many months of trying to get a loan on the internet and was scammed the sum of $5,200 i became so desperate in getting a loan from a legit loan lender online who will not add to my pains, then i decided to contact a friend of mine who recently got a loan online, we discussed about the issue and to our conclusion she told me about a man called Mr Bill Copeland who is the C.E.O of Bill Copeland Loan Company So i applied for a loan sum of (420,000.00USD) with low interest rate of 2%, so the loan was approved easily without stress and all the preparations where made concerning the loan transfer and in less than two(2) days the loan was deposit

  • rlumpkinjr

    You better have the correct kind of insurance. Your typical homeowners or renters insurance policy doesn't cover you like you think. I had somebody fall and break her leg, when I call my insurance agent, I found out that she wasn't covered under my current/standard/everyday policy that 99% of homeowners have.

  • Larry Leroy

    1)YOUR NAME................... 2)YOUR COUNTRY................ 3)YOUR OCCUPATION............. 4)YOUR MARITAL STATUS......... 5)PHONE NUMBER................ 6)MONTHLY INCOME.............. 7)ADDRESS..................... 8)PURPOSE OF LOAN............. 9)LOAN REQUEST................ 10)LOAN DURATION..................

    THANKS, Larry Leroy(C.E.O) EMAIL:aldermoreloanfirm1@gmail.com www.aldermoreloans1.webs.com ALDERMORE LOAN FIRM

  • Larry Leroy

    Gets good money lending service today that is generally reliable,safe ,filtered by International Loan Agency and also Tested and Trusted. We give out loan for Any purposes, if you are really in need of a loan,, just let us know the amount you need as a loan,and your problems will be over.We issue loans to individuals despite their financial conditions.,and low credit score.

    Are you in need of a loan? Do you want to pay off your bills? Do you want to be financially stable? All you have to do is to contact us for more information on how to get started and get the loan you desire. This offer is open to all that will be able to repay back in due time. Note-that repayment time frame is negotiable and at interest ra

  • Sophia Hills Condo

    Sarah Kessler has some good tips for using AIRBNB, but overall I find his slick and emotionally cold approach to be not in the spirit of "the sharing economy". It's not really even in the spirit of liking guests, since Scott's motto is "my favourite guest is the person I never knew existed" and his attitude towards communication with guests is that time spent communicating cuts into one's profit margins. No, Scott's approach is not that of the small home owner in the sharing economy, it is rather the same one that the giant corporations have - how can I maximize my profits while not really caring much about the people that come through my life. In this ebook, he brags about how much money he's made and how little he works for that money.

  • Lauren Travis

    TESTIMONY ON HOW I GOT MY CHRISTMAS LOAN FROM A GENUINE LOAN COMPANY LAST WEEK

    I am MRS LAUREN TRAVIS by name, I live in California, United State Of America, who have been a scam victim to so many fake lenders online between February last year till April this year but i thank my creator so much that he has finally smiled on me by directing me to this new lender who put a smile on my face by not scamming me and also by not not deceiving or lying to me but however this lender whose name is Mr Alvaro Amaranto gave me a Christmas loan which amount is $ 90,000 united states dollars after my agreement to their company terms and conditions and one significant thing i love about this loan company is its fast service and also its God fearing attitude for not been like other fake lenders online who scammed me before now by asking me to bring fees upon fees without getting the results of all those fees payment that i made to t

  • Lauren Travis

    TESTIMONY ON HOW I GOT MY CHRISTMAS LOAN FROM A GENUINE LOAN COMPANY LAST WEEK

    I am MRS LAUREN TRAVIS by name, I live in California, United State Of America, who have been a scam victim to so many fake lenders online between February last year till April this year but i thank my creator so much that he has finally smiled on me by directing me to this new lender who put a smile on my face by not scamming me and also by not not deceiving or lying to me but however this lender whose name is Mr Alvaro Amaranto gave me a Christmas loan which amount is $ 90,000 united states dollars after my agreement to their company terms and conditions and one significant thing i love about this loan company is its fast service and also its God fearing attitude for not been like other fake lenders online who scammed me before now by asking me to bring fees upon fees without getting the results of all those fees payment that i made to t

  • Lauren Travis

    TESTIMONY ON HOW I GOT MY CHRISTMAS LOAN FROM A GENUINE LOAN COMPANY LAST WEEK

    I am MRS LAUREN TRAVIS by name, I live in California, United State Of America, who have been a scam victim to so many fake lenders online between February last year till April this year but i thank my creator so much that he has finally smiled on me by directing me to this new lender who put a smile on my face by not scamming me and also by not not deceiving or lying to me but however this lender whose name is Mr Alvaro Amaranto gave me a Christmas loan which amount is $ 90,000 united states dollars after my agreement to their company terms and conditions and one significant thing i love about this loan company is its fast service and also its God fearing attitude for not been like other fake lenders online who scammed me before now by asking me to bring fees upon fees without getting the results of all those fees payment that i made to t

  • Lauren Travis

    TESTIMONY ON HOW I GOT MY CHRISTMAS LOAN FROM A GENUINE LOAN COMPANY LAST WEEK

    I am MRS LAUREN TRAVIS by name, I live in California, United State Of America, who have been a scam victim to so many fake lenders online between February last year till April this year but i thank my creator so much that he has finally smiled on me by directing me to this new lender who put a smile on my face by not scamming me and also by not not deceiving or lying to me but however this lender whose name is Mr Alvaro Amaranto gave me a Christmas loan which amount is $ 90,000 united states dollars after my agreement to their company terms and conditions and one significant thing i love about this loan company is its fast service and also its God fearing attitude for not been like other fake lenders online who scammed me before now by asking me to bring fees upon fees without getting the results of all those fees payment that i made to t

  • Lauren Travis

    TESTIMONY ON HOW I GOT MY CHRISTMAS LOAN FROM A GENUINE LOAN COMPANY LAST WEEK

    I am MRS LAUREN TRAVIS by name, I live in California, United State Of America, who have been a scam victim to so many fake lenders online between February last year till April this year but i thank my creator so much that he has finally smiled on me by directing me to this new lender who put a smile on my face by not scamming me and also by not not deceiving or lying to me but however this lender whose name is Mr Alvaro Amaranto gave me a Christmas loan which amount is $ 90,000 united states dollars after my agreement to their company terms and conditions and one significant thing i love about this loan company is its fast service and also its God fearing attitude for not been like other fake lenders online who scammed me before now by asking me to bring fees upon fees without getting the results of all those fees payment that i made to t

  • Lauren Travis

    TESTIMONY ON HOW I GOT MY CHRISTMAS LOAN FROM A GENUINE LOAN COMPANY LAST WEEK

    I am MRS LAUREN TRAVIS by name, I live in California, United State Of America, who have been a scam victim to so many fake lenders online between February last year till April this year but i thank my creator so much that he has finally smiled on me by directing me to this new lender who put a smile on my face by not scamming me and also by not not deceiving or lying to me but however this lender whose name is Mr Alvaro Amaranto gave me a Christmas loan which amount is $ 90,000 united states dollars after my agreement to their company terms and conditions and one significant thing i love about this loan company is its fast service and also its God fearing attitude for not been like other fake lenders online who scammed me before now by asking me to bring fees upon fees without getting the results of all those fees payment that i made to t

  • destinyvoice54

    Hi Sarah, the story was really wonderful and I liked your approaching towards the readers. You have told the importance of Airbnb in a way that even a kid can understand it. Also, here I would like to mention the name of a site that helped me a lot in getting higher position over Airbnb, its http://rentingyourplace.com. Lastly, thanks a lot for the post.