The short-term rental business is booming…
After beginning as a method to earn extra income as a homeowner, short-term rentals have exploded into one of the highest-earning business models today.
This growth isn’t slowing down anytime soon.
In fact, according to research by Precedence, the global short-term rental market reached a whopping USD $124.52 billion in 2024 alone. Experts predict the market value will reach $344 billion by 2034.
Whether you have been dabbling in a side hustle or dreaming up plans for a full-time business, now is the perfect opportunity to begin your short-term rental income strategy.
But first, let’s address the elephant in the room.
Everyone’s heard horror stories of people throwing their spare room (or entire home) onto Airbnb, securing a few bookings then watching revenue slow to a halt.
The difference between a short-term rental hobby and short-term rental business comes down to strategy.
Individuals who treat their rentals as a business from day one are the ones cashing out while others are left high and dry.
Here’s what you’ll learn:
- Why Short-Term Rentals Are Booming
- How To Create A Profitable Short-Term Rental Income Strategy
- Revenue Maximization Strategies The Smartest Hosts Are Already Using
- Mistakes That Drain Your Short-Term Rental Profits
Why Short-Term Rentals Are Booming
Whether it’s due to international travel or Covid-caused ‘doom tourism’, there are several reasons why travellers are booking more short-term rentals these days.
People want authenticity. While hotels will always have their place, travellers are increasingly searching for unique spaces that offer kitchens, living rooms, and an overall feeling of being ‘at home’.
Another massive driver of growth is online marketplaces like Airbnb. Creating a listing is easier than ever before. And better yet, you don’t even need to own property to succeed.
EntrepreneurialProperty investors are dominating the industry with strategies like rental arbitrage with Airbnb where you can lease a property long-term then sublease it to guests on Airbnb for a profit.
Here’s the beauty of rental arbitrage.
Instead of getting bogged down by a costly mortgage or down-payment. You simply rentique (pay) the gap between what you owe for rent and what you earn from guests.
Increased competition aside, travellers spent more than $90 billion in economic activity through Airbnb in the US alone in 2024.
Depending on your city, property type, and management style – the average Host earns around $14k a year in supplemental income. Some earn 10x’s that much.
As you can see the opportunities to earn money from short-term rentals are still very much alive.
It’s up to you to make sure you have a plan to succeed.
Creating a Profitable Short-Term Rental Income Strategy
Owning short-term rentals can be profitable with the right strategies in place.
If you skip one, you skip your chance to maximize your revenue.
Below we break down the fundamentals of creating a short-term rental income strategy that works.
Find The Right Market
Location will make or break your listing.
You will never out-earn a property in a high tourism area with a property in the suburbs.
Understand seasonal fluctuations in your area and ensure you are finding listing in markets with increasing travel demand.
Some hosts have even begun leveraging Emerging markets like cities that have announced major redevelopment or states that are offering tax incentives to entice new business.
Before purchasing any property, research is king.
List Your Space Like A Pro
Think of your listing as your sales page.
It needs to sell itself.
Pretty pictures, stunning description and responsive communication are table stakes.
Below we go over some of the listing best practices to increase your bookings.
Price For Optimal Revenue
There is a science to pricing.
Notice we didn’t say ‘the cheapest price’. Cheap pricing models are one of the quickest ways to kill profits.
Everything from seasonality, local events and even the day of the week impacts how much you can charge.
Use a pricing tool to maximize profits when demand is high and fill your calendar when it’s not.
Revenue Maximization Strategies Successful Hosts Are Already Using
Hosting guests and building revenue isn’t a one trick pony.
Instead of relying on a single income opportunity, successful Airbnb hosts are stacking revenue strategies to increase earnings on each property.
Here are just a few methods:
Diversify Your Platforms
Don’t put all your eggs in one basket.
Instead of listing your property on a single platform like Airbnb, increase your chances by listing on Vrbo, Booking.com,Expedia, Hotels.com, and more!
Incorporate Upsells & Add-Ons
This revenue growth strategy is seriously underrated…
Offering guests extra amenities like early check-ins, late check-outs, parking, kitchen utensils and more for an additional fee can earn you hundreds on every booking.
Its an easy way to grow revenue with little to no extra work on your end.
Charge For Long-Term Stays
Cleaning your property takes time, costs money and cuts into your profits.
That’s why some of the savviest hosts are optimizing for longer-term guest stays.
Not only do these bookings cost less to take care of. Guests that stay months at a time help ensure you have consistent revenue rolling in.
Once again. It’s a win-win.
Don’t Forget About Systems
You can scale your Airbnb business with multiple properties. But without the right systems, you’ll never exit burnout.
Once you have a healthy cash-flow on one rental. Building out processes for booking communication, cleaning services, and pricing will allow you to focus on acquiring more listings.
Short-Term Rental Mistakes To Avoid
As more and more people discover Airbnb, competition is heating up.
A recent Host survey even found **76% of operators noticed an increase in competition throughout 2024.
Make sure you’re not making any of these costly mistakes.
- Overlooking your local regulations. Every city and state has different rules surrounding short-term rentals. Before listing your first property make sure you understand the regulations.
- Not budgeting for expenses. Rentals come with expenses. From cleaning fees to service fees. To furniture rentals. To maintenance. And everything in between. Make sure your short-term rental income strategy accounts for these costs.
- Forgetting about guest experience. There’s no hiding awful reviews on Airbnb. If your rental isn’t kept clean. Stocked with necessities. And guests have a poor experience. Don’t expect your bookings to skyrocket.
- Not reviewing your numbers. Bringing in revenue is great. But if you aren’t calculating your net profit, you won’t know what strategies are working. Be sure to evaluate your occupancy %,ADR, and net income for each property.
By avoiding these common Airbnb mistakes, you’ll be well on your way to building a steady stream of passive income.
Wrap Up
Whether you’re looking to create a side hustle or full-time business. The short-term rental market is booming.
Here’s a quick recap of what you need to do today:
- Find great markets
- Have a solid short-term rental income strategy
- List your space professionally
- Price your home correctly
- Stack Revenue streams with extras and long-term
- Stay consistent with your strategy and scale when you’re ready
Now get out there and start earning!
