Starting a business takes time and money. There ARE Airbnb management business costs. Don’t let the internet fool you. This video breaks those costs down, including how you can minimize your co host business expenses.
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This question comes up often as people are looking into starting an Airbnb property management business. This video will go through the following three topics:
What costs will you incur BEFORE you book your first property?
What are your ongoing operational expenses?
What is the fee structure? What is coming out of your management fees versus what is being paid for by the property owner?
I do not recommend spending a lot of money as you get started, as it is not needed. It is really about what you NEED. I would budget between $200 and $300 to get set up and book your first property.
First, I recommend setting up a basic website. The domain will cost about $10-$20 and the hosting will cost another $10 per month. So, your website will cost $30 upfront and have an ongoing cost of $10 per month.
Secondly, you will need data for the area you want to manage. I recommend a data mining company called AirDNA. It’s a really great tool that you can use to figure out nightly rates, occupancy rates, and seasonal fluctuations. It will allow you to know how much any property can expect to earn in a 12-month period.
It is important to have that data, as it gives you credibility when you are speaking with property owners.
It is a monthly subscription based on the area and will run between $30 (small town) and $120 (large city). However, we have built a tool in the link above that allows you to grab the data once, put it in the projection tool and it houses the data and presents it in an easy-to-read format. Using our tool means this will be a one-time expense of $120.
That is really all you NEED to start your business.
I also highly recommend budgeting for a coach. I believe that it is less costly to learn from a coach who has made mistakes than to learn by trial and error. If you would like to see how coaching with me works, check out the training in the link above. We are already helping and working with hundreds of people.
Those will be all of your expenses before you book your first property.
Next, below are the costs associated with managing properties.
The first expense will be to hire a cleaner who will turnover the property after each guest. This is something that I do not recommend doing yourself. What is nice is that Airbnb allows you to set the nightly rate PLUS set a cleaning fee. This means you will be earning this fee on top of your property management fee.
The second expense is your software expenses. You will want some software to get everything centralized onto one backend for guest communications.
This will cost between $20 and $40 per property per month. You will want to start using software once you have booked more than five properties. I recommend programs such as SmartBNB and Hostaway that do not charge a percentage of guest bookings but instead charge monthly flat fee.
I also recommend a program called iGMS if you have fewer than five properties because they do not charge for the first five properties.
For guest communications, once you have more than five properties you will want to hire a virtual assistant. This will cost about $30 – $40 per property per month. With a virtual assistant, it is going to be so important to have the right systems in place to hire and train the right person.
To get those systems in place, check out our free training in the link above.
So in total, the expenses you will deduct out of your management fees will be around $80 per property.
The last expense is something that the property owner is going to pay for and that is the maintenance expenses. Typically, if you’re managing locally, you’re going to take care of the maintenance and will be coordinating repairs and that sort of thing.
Hopefully this has given you a breakdown for the income and expenses looks and how it all breaks down.
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