You may have heard the horror stories of Airbnb hosts having to shut down and losing all of their Airbnb income as the pandemic raged globally in 2020. It wasn’t just Airbnb hosts losing their pants – a lot of businesses and families struggled. But it did bring into sharper focus the risks of hosting on Airbnb. We lived it. We’re here to tell the tale. So is Airbnb profitable for hosts in 2021? How much can you make on Airbnb in a post pandemic era? Or is it all too damn risky now? In this post, we’ll look at how much you can make in Airbnb profit in April 2021, starting with our own one bed apartment. We’ll also delve into how to manage the financial risks of setting up Airbnb passive income. Read on peeps to see for yourself what an Airbnb side hustle can be worth.
The perfect ‘lil Airbnb passive income property
We have a little one-bedroom apartment on Airbnb in regional town in Australia. It’s located close to the city centre and next to a nice golf course. It’s about 52m2 internal, with a full galley kitchen, bedroom, separate bathroom/laundry and open living dining. The place has its own private, sunny courtyard with nice seating area and lovely garden.
We used to rent it on the long-term rental market for $210 per week or around $10,080 per year, factoring in vacancies between tenants. $10,080 was gross income, and after mortgage and bills we were in the red (negatively geared) by a little each year. A dumb position to be in looking back and I’m not sure why we let so many years go by with it negatively geared. But that’s another story.
We began thinking a few years ago when we were looking at how to better our financial equation that our little one bedder would be the perfect property to trial on Airbnb. We had renovated the place in 2014 and it wouldn’t take much in terms of capital to turn it into a short-term rental. Airbnb side hustle number one, here we come!
We set up the property for short term guests, (another capital outlay), had professional photos taken and listed the place in May 2019. We weren’t sure who would book as there was not a lot of data on that regional market, but we knew how much moolah we had in the deal. We did our best with the data available and knew the nightly rate we needed, based on local market occupancy, to make a good profit.
How much money can you make on Airbnb in 2021?
Fast forward to April 2021 and that little one bedder has long since paid back its initial set up investment and is no longer negatively geared. Here is how much we made in Airbnb profit from this property in April 2021:
So the answer financial freedom seekers is yes – you can make money on Airbnb in 2021. Even with a global pandemic holding back the reins on international travel. This one bed apartment that used to lose a few grand for us each year on the long-term rental market made a profit of $1559 in April alone. The first of our 4 Airbnb properties turned out to be the perfect toe in the water….
If you want to know how to make Airbnb but don’t have any investment properties – we’ve got your covered too! The good news is there is a strategy to make Airbnb profit with zero investment properties that we’ve used and made good money from. Check it out here along with all of the other tools and resources we know and love to make money with Airbnb.
Airbnb passive income
The beauty of that $1559 is that it ranks pretty highly on the passive income scale. During the month of April we put a total of no more than 5 hours into running that apartment on Airbnb. We’re able to do this because we have set up the operating and financial systems and processes to run the listing passively. So that’s a cool 300 bucks an hour. For a little one bedder with a small initial investment risk, turns out it was no-brainer. But taking that first step financially was not easy until we really got a handle on the risks.
Taking your first step to Airbnb profit
Time to pimp your assets peeps! If you want to escape the rat race and you own some property, then one of the first places to start is reviewing those assets. Are they costing or making you money? Have you got the best cashflow strategy in place? Can you use them to live financially free here and now? Airbnb can be a very rewarding passive income strategy and we’ve shown here Airbnb is profitable for hosts in 2021. If you can pimp your property assets financial freedom seekers, we say get on it!
If you’re thinking about an Airbnb profit strategy for yourself but are worried about losing money, then it’s a simple case of doing the numbers. One of my favourite bosses of all time has a sign on his office wall:
“in God we trust, all others bring data”.
I’m not into god but the rest is plain truth. Actually, I’m not into data either, but there’s no financial freedom without it! What I’m getting at is that the financial risk with Airbnb is tangible and manageable. So where to get started?
We’ve lauded the benefits of AirDNA in a previous post so no need to go on about it too much here. In short, it’s a genius tool if you’re worried about taking the first steps into making killer Airbnb passive income. It gives you critical insights into the nightly rate you can charge and the occupancy you can expect in your local area – based on real data. And it’s darn cheap at under $50 for the month, no ongoing subscription – especially for information you get.
How do you work out potential Airbnb income and profit?
So what do you do with the AirDNA data, once you get it? You’re going to want to turn it into useful financial information to help your investment decisions. Sign up for our free Airbnb Profit Estimator to put your Airbnb data into action!
Airbnb Profit estimator – The Airbnb Profit Estimator is our simple to use spreadsheet tool for wannabe Airbnb investors, and time poor Airbnb hosts. The aim? To help y’all with the financial side of investing in and making money on Airbnb. Here’s what’s in the bundle:
This is where you plug in the AiDNA research. The profit estimator helps you see the potential Airbnb profit you can make based on the nightly rate you can achieve and the occupancy rates in your local market. This data is available through AirDNA. Or you can work it out in a round about way on the Airbnb App – its just way more complex and time consuming.
Airbnb set-up budget planner – this will help you make sure you don’t over capitalise when setting up your first Airbnb. It works in tandem with the Profit Estimator. It calculates your investment breakeven in weeks based on your potential profit and projected (or actual) set up costs. Spend too much early and you’ll be slogging it through months before you see any actual profit.
Income statement – helps you record your Airbnb income and expenses from day one. It calculates monthly and annual profit, profit margin as well as capitalisation rate. This one is for time poor Airbnb hosts or Airbnb side hustlers. If you have a real job, this will make the finances of running an Airbnb a breeze.
This tool is designed to help you take the first step to Airbnb passive income and stay on top of the numbers as you grow your Airbnb profits and maybe even your Airbnb business.
The final word – knowledge is only power with action!
Don’t be held back by disinformation or false news. But also, probably don’t make investment decisions based on the numbers we give you here. Do the numbers yourself like you would for any investment. Start with out free Airbnb Profit Estimator.
If you want to become an Airbnb Host, here is a link to the platform. As they say in the (wherever they say it)…. the rest is up to you!