You might think all of the stories going around about people making money on Airbnb with no property are just a bunch of marketing BS. But we can say hand on heart that you can make money on Airbnb with no property. And you can do it without any prior experience, if you know what you’re looking for and what steps to take.
We know this, because we have made good money on Airbnb with three rental properties – none of which we owned personally.
In this post we’ll show you the first Airbnb property that we rented and then listed on Airbnb. We’ll explain what sort of property we looked for and how we turned that property into a great side hustle income, with zero previous experience. The only caveat is, you need to know what to look for and how to set it all up if you want to succeed. But don’t worry, if this kind of Airbnb side hustle is for you then we’ve got you covered.
We’ll also dive into the costs, gross income and net profit so that you can get a feel for how the numbers really work.
We’ll assume in this post that you know how the basic business model works that enables you to list other peoples property on Airbnb and make money, If you don’t know but want to, check out this post here before reading on.
What kind of property will make money on Airbnb?
Our zero property Airbnb side hustle started in the capital city of Brisbane, Australia.
After we decided we wanted to make money on Airbnb with this strategy, we started by working out what kind of property we were looking for and where in Brisbane.
To understand this, we had to learn about what factors make a successful Airbnb listing and then research those factors.
If you want to learn more about the exact formula for identifying great potential Airbnb properties we highly recommend this course that steps out everything you need to know in a formulaic approach that you can replicate across multiple locations and property types.
Where to research and what to look for
The first thing you need to do is get an idea of where Airbnbs are already running successfully in your area.
The free way to do this research is on Airbnb itself but it will be time consuming and a bit complex. Here is how we’d go about kicking things off:
- Location search – Do a map search of different locations in your areas to see where existing properties are concentrated.
- Property search – Then drill down into those locations to find out what type of properties are listed there – is it apartments or houses? How many bedrooms, bathrooms? Take notes about the condition of the properties and amenities.
- Calendar search – then for each of the properties in that location open the listing on Airbnb as though you were going to book it. Use the web browser as it has better functionality. Look at the how full the listing calendar is for that month and the three months after. You need to see good upcoming bookings in the calendar.
This is really something you’d want to spreadsheet out. If you do this research you’ll start to understand what suburbs are good and what types of properties are getting good bookings in those locations.
The much easier way to go about this due diligence step is to just use the premier Airbnb data source and service – AirDNA. They’ve done all the data analysing for you and just give you the results.
For a small monthly subscription (ours was about $40 I think), which you can cancel at any time, AirDNA will give you access to critical listing performance data you need to make money on Airbnb without owning property:
- occupancy rates per location
- booked nights per month
- booked prices
- Property types per location
- actual earnings of potential competitor properties in that location
This data is presented in nice tables with maps and graphics – all easily digestible. And will make it easy and quick to work out where to look for property and what type of property you need to find.
The rental property we found
We decided on Brisbane City as the best location for our first Airbnb rental arbitrage property. We also worked out from the AirDNA data that there were very few 3 bedroom properties listed, so we targeted that under supplied part of the market.
In our CBD location, all of the properties were apartments rather than houses. Because we were looking for a large 3 bed apartment, we also wanted it to be at least partly furnished. This would reduce our set up costs to list it on Airbnb. The rental needed to include good quality beds, a sofa, dining table and chairs, a TV and TV unit at a minimum. We also knew, from the training we had done, that a large property needed two bathrooms to appeal to different combinations of guests. Our ‘wish list’:
- 3 bedrooms
- 2 bathrooms
- CBD location
- a wow factor, to beat the competition for bookings
So with this wish list we started to search online and attend rental inspections to identify suitable property.
Now lets take a look at the property we found, and ended up renting with the owners permission to list on Airbnb:
The apartment was a 2 bed 1 study apartment with two bathrooms. The study was key to our strategy because it allowed us to list the property on Airbnb as a three bedroom apartment, which meant a higher nightly price and more revenue.
All of the furniture you see in the photos came with the rental and was owned by the landlord, with the exception of the single bed we set up in the study. The kitchen items, decor and linen was supplied by us.
This apartment was located on the 72 floor of Brisbane’s highest residential building with towering views of the city skyline and sweeping panorama out to the ocean. This, and the fact that the building was new, made up our wow factor – the reason guests would chose our listing over the competition.
How much can you pay in rent and still make money?
We knew from our research on AirDNA the gross revenue that we could expect from renting similar a 3 bed 2 bath property in Brisbane City. AirDNA shows you the average occupancy level (nights per month) and nightly booked price for a particular area and a particular type of property. You can validate this by viewing the real earnings of your competitors, also using AirDNA.
We then estimated, from the training material we had, what our costs might average out at per month to run the Airbnb listing, in addition to rent. These costs covered things like power, water, internet, laundry, snacks, insurance and any small maintenance issues that we might need to fix.
From these figures, we were able to calculate the most we could afford to pay in rent and still make a good profit each month. That maximum rent was $1000 per week, which was right on market for a furnished 3 bed, 2 bath new build property in Brisbane City. This is another critical reason to use AirDNA and to get access to all of the templates available through the BNB formula course if you’re serious about turning this Airbnb strategy into a full time income or business.
Our Airbnb costs, gross income and net profit revealed
This is the first time we’ve revealed the numbers from the inside on one of our Airbnb listings where we didn’t own the property. We’re sharing it because we hope it benefits you if you’re thinking about making money on Airbnb without any property of your own and trying to understand the cash flow proposition and business risk.
|Laundry & cleans||$1120|
|Airbnb Gross Revenue (after fees)||$10,583|
|Other revenue (after fees)||$1,735|
|Total Gross Revenue||$12,318|
So what does these figures mean?
Here’s three valuable take home points from the actual monthly figures we’ve shared today that will help you to succeed:
1.You need to be confident your revenue from bookings will more than cover your monthly costs.
In our case, these monthly expenses of $5927 were fairly typical. No expenses for maintenance were incurred that month but you’d want to factor a maintenance cost in. You also need to factor in expenses to run this type of Airbnb business. These include insurance, your own internet costs and computer costs, and any other administrative expenses you might have.
The way you develop this confidence? Look at the data you can get on AirDNA and do your sums. Our advice is don’t sign a rental agreement on any property to list it on Airbnb before you do your homework.
2. There are peak and off peak seasons with most areas. You need to stay right on top of monthly pricing to make a profit like this.
Know when your season peak price nights are and charge accordingly. This month was so profitable because we knew a peak event occurred in the city during the month. The nightly booked price for apartments with a spectacular view of the city skyline on one particular night was $2000. Imagine if you missed that and just charged the normal rate?
You can find nightly advertised prices and forecast future nightly prices (based on booking demand) in AirDNA.
There are also pricing services that you can use to make sure you take advantage of changes in demand for accommodation in your market. One such service is PriceLabs.
3. Occupancy rates matter to your success. Which means the quality of property you pick to list on Airbnb is critical.
You can find average occupancy rate data in AirDNA. You need to hone in on the rates that apply to your particular type of property. One bedroom places will book differently to 3 bedroom places. The quality of property your rent and wow factor will influence your booking rate.
But once you know the average occupancy rate for your area and have found a quality property with wow factor, just focus on the top earning properties in that area and either copy what they do (in terms of styling, listing, added value), or do it better. If you follow this advice, you will almost certainly beat the average occupancy rate you find on AirDNA. We routinely beat the average occupancy rate by 10% to 20% with this property, and some months were 96% booked.
The final word – in God we trust, all others bring data
Making money from Airbnb without owning property is a fantastic side hustle. It’s entirely doable with no experience. It’s fun and it doesn’t take long to start making a good secondary income stream. With a couple of properties like this you could literally quit your job and make a different life for yourself and a better lifestyle.
But you can’t just jump in and expect immediate success without knowing what you’re doing and without looking at the data. There is a bit to it, some stuff to learn. It’s all entirely do-able though. We can vouch for that.
The two tools we used and that were critical to our success we have shared with you today -:
We can’t recommend these highly enough. They do cost some money. But it’s one of the best investments we’ve made in ourselves because of the money we made.
If you’re interested in reading more about making money on Airbnb check out our other great posts:
- How to manage Airbnb properties for other people
- Make money on Airbnb without owning property – $6400 in one month with this apartment
- Can you really make money with rental arbitrage?
- How to start an Airbnb in a pandemic
Til next time have fun, be happy and do good freedom seekers!
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