The Fastest Way To A Six Figure Airbnb Business Model

There are so many different Airbnb business models that work. That’s the good news! The tough part for beginners is knowing what direction to go when you first start out.

The gurus teach everything from Airbnb arbitrage to rent by the room to partnership to luxury to market specific targeting. I started because a friend told me how much he made on a similar space he had on his personal residence and I was hooked.

I am going to show you everything you need to know about my personal Airbnb business model and why it would work for anyone wanting to get into short term rentals.

This post is all about Airbnb business model.

Best Airbnb Business Model

My Airbnb business journey

How it started…

I opened my first Airbnb April 2019. It was a guest house on my personal residence that my husband and I had planned to rent to long term tenants. We went to a dinner with our realtor and broker to celebrate our closing and the broker told us we should consider Airbnb. He had a basement that he rented on Airbnb and was pulling in $1,200 a month for 1 bedroom he rented part time!

I was totally blown away. Our guest house was a totally separate unit with a full kitchen, separate driveway and it’s own little retreat. We decided to go all in.

My husband spent 3 months completely remodeling the guest house and it turned out so cute! The first couple months we had $3,000-$4,000 revenue months. It completely covered our mortgage. How life changing!

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How it grew…

Once we had the guest house up on Airbnb, we were hooked. We had one other rental that we were planning on continuing as a long term rental but then we started having tenant problems. The best thing about Airbnb is that the tenants leave after a couple days and you don’t have to deal with them ever again. That sounded insanely enticing after months of tenant drama.

By this time, my husband and I started looking up other Airbnb gurus on Youtube and started learning from them. We learned about Airdna for property analysis. And learned about PriceLabs for dynamic pricing. I also learned about predicting revenue, prioritizing good design and creating a contactless experience for guests.

As a millennial. there’s truly nothing more important to me than being independent and not having to deal with hosts. Most of the guests we would host wanted the same thing.

How it’s going…

Now, we are almost live with our 8th short term rental! It’s been such a fun ride and we are looking forward to continuing to add to our portfolio. Our business model is simple and I’m exposing it all right here.

My Airbnb business model explained:

1. Look for affordable markets

We only buy in markets that are driving distance to where we are located. The rule is 3 hours or less. We want affordable markets and ones where we know the tourism isn’t going to die down anytime soon. Beach cities and national parks are both close to us so we have targeted these areas.

We also are not bringing in any partners at this time and trying to scale with all our own money. So we want to get creative with how we acquire. We’ve use investment loans, second home loans and refinances to pull and move cash around to afford another property.

The key is high traffic and markets that depend on tourism.

2. Only acquire small houses

Our biggest Airbnb is 2 bedrooms and hosts 6 people max! I love a small Airbnb and have learned that this guest is the guest I understand and want to cater too. They tend to be couples or families with 1-2 kids. Less wear and tear and never an issue with parties or special events that aren’t approved. It’s perfect for us and the right fit for what we want to do.

3. Prioritize design above everything

It’s all about the design. Our portfolio is a mix of short term and mid term rentals and on all the Airbnb properties, design is everything. We don’t spend as much on the design on the mid term rentals and I think that’s okay. The goal is to be the best property on the market in your area.

Short term rentals are more competitive with design than mid term rentals which is why we invest more there. Plus the ROI is higher.

4. Professional photos and a robust listing description

I always prioritize professional listing photos and a massively all inclusive listing description. Put so much information in the description and tell the guests what to expect. Leave nothing on the table for surprise and tell them the bad things too.

If you can properly manage guest expectations, you will be ahead of 95% of other hosts.

5. Automated messaging

This piece that’s crucial to our business model is automated messaging. Tell guests thank you for booking and when to expect their check in instructions. It will massively reduce the amount of back and forth prior to a guest check in.

Since starting this strategy, I have reduced guest messages a lot. Also, 80% of my stays I never hear from the guest during their stay and still get a 5 star review.

6. Airbnb business account

Lastly, tracking your revenue is tricky. The deposits come in with the cleaning fees that go to the cleaners, minus the Airbnb fees and it’s a weird amount.

The best solution I have found is Relay is the best bank for short term rentals. You can have up to 20 checking accounts and 2 savings accounts making it so nice for keeping transactions clear.

Regardless if you use them, keeping your finances in order and understanding revenue and expenses are crucial to being successful.

Airbnb business without owning a house

So many people aspire to get into Airbnb but view the cost of buying a house as a major barrier. It is, buying an investment property is a lot. There is a way around this, it’s called Airbnb arbitrage.

Airbnb arbitrage is where you find a rental property and work with the landlord on a signing a lease that will allow you to sublease the property as an Airbnb. With this strategy, you only need around $10,000 to get started which is way less than buying a house.

If you want to read more about this strategy, check out this article on running an Airbnb business that doesn’t own any property!

What do you implement in your Airbnb business that is really success? I’d love to know in the comments below!

This post was all about Airbnb business model.