Vacation Rental Owners

How to Start an Airbnb: A Complete Step-by-Step Guide

Wondering how to start an Airbnb? Curious about what it takes to become an Airbnb host? This article goes over each step of starting an Airbnb business. From the research and planning stages to furnishing, decorating, and listing a property, those who wish to become Airbnb hosts will find all the information they need to succeed below.

What Is Airbnb, and Why Is It So Popular?

Airbnb is a short-term rental listing platform that was founded in 2008. It connects property owners with guests who need a place to stay during their travels. Airbnb offers an alternative to staying at hotels and features millions of unique places for travelers to stay. Many people prefer staying at a vacation rental rather than a hotel because it feels more homey and personal, and they can enjoy an entire home with plenty of privacy. Another great option is to list your rental on which is a lower cost alternative to Airbnb.

Airbnb Hosting: How Does It Work?

Airbnb hosting is relatively simple when thinking about how to start an Airbnb rental. People who have a property they want to rent out, whether it’s a room, apartment, or house, list it on the Airbnb website along with other sites such as Rental Trader, VRBO and The listing process is simple, quick and easy and is free in most cases. A listing consists of photos and written information about the property. Hosts also need to set a nightly rate. Once a property is listed, potential guests can view it and book a stay. Generally, they must agree to the host’s house rules, and then their stay is confirmed.

How to Start an Airbnb Business: 10 Steps for Success

Those interested in starting their own Airbnb rental business are sure to find success by following the step-by-step process laid out below.

Step 1: Research and Plan the Business

The very first step in starting an Airbnb should always be to do some research and planning before taking action.

Write a mission statement.

Writing a mission statement puts potential Airbnb hosts in the right mindset to start their vacation rental business. They should think about their values, what motivates them to start the business, and how they want to operate their vacation rental. Other factors to consider are their goals and overall vision for their vacation rental.

Set a budget.

Set a budget

Staying on budget is crucial for success in the short-term rental industry! Purchasing and fixing up a property to serve as an Airbnb is quite the investment. It’s wise to sit down and come up with a realistic budget with a bit of a cushion, since renovations tend to cost more than expected. Consider taxes and insurance costs as well.

Choose a target market.

Once the mission statement and budget have been established, it’s time to think about what kinds of guests the vacation rental will appeal to. This is a crucial part of how to start an Airbnb. There are tons of different target markets to consider: families, pet owners, luxury travelers, snowbirds, workationers, and many others.

Select a profitable real estate market.

A good market analysis will reveal which cities are best suited to Airbnbs and vacation rentals. The ideal market has low supply and high demand.

Research local laws and regulations.

Some cities and neighborhoods have rules prohibiting short-term rentals, so it’s important to get familiar with the local laws and regulations.

Look for appropriate investment properties.

Next, it’s time to scour the chosen market for properties that have great potential as vacation rentals. Fixer-uppers will require more time and effort before they turn a profit and begin earning money, while some properties are nearly ready to be listed as they are.

Analyze the return on investment.

It’s smart to consider the ROI of a new vacation rental business. Generally, the simplest formula for calculating the return on investment is the net return on the investment divided by the cost of the investment. This number is then multiplied by 100%.

Step 2: Start the Business

Now that the planning’s done, it’s time to get started!

Choose a business name.

A business can’t exist without a name, and a name is also the beginning of the branding for the company. Those wondering how to start an Airbnb should know that they can’t get too far without a name.

Form a legal entity.

Form a legal entity

Many vacation rental businesses establish themselves as LLCs, or limited liability companies. There are other types of legal entities to consider as well, such as C-Corporations and S-Corporations.

Register for taxes.

Registering for taxes is necessary for a vacation rental business to operate legally.

Open a business bank account and credit card.

Setting up a bank account and credit card specifically for the short-term rental business makes it simple to keep track of its finances, rather than using a personal bank account to cover business expenses.

Set up business accounting.

Business accounting can be set up through free or paid bookkeeping and accounting software, or vacation rental business owners can consider hiring a professional accountant to keep track of their finances.

Obtain permits and licenses.

Depending on the vacation rental location and the renovations needed to prepare the property for guests, hosts will need various permits and licenses.

Get insurance.

Some short-term rental listing sites, such as Airbnb, offer limited protection for hosts. However, it’s recommended to invest in a third-party insurance policy with additional coverage for more protection. When thinking about how to start an Airbnb, the safest way to do so is with insurance.

Define the brand.

Branding generally consists of the business’s name, logo, and tagline. Check out this article for a complete guide to creating a brand for a vacation rental business.

Create a business website.

A business website is a great way to spread awareness of a vacation rental while also offering an easy way for guests to book their stay.

Step 3: Invest in a Property

Once the business groundwork is laid, investing in a property is the next step in how to start an Airbnb. If you don’t have any property or enough money to buy, you can learn how to rent Airbnb without owning property.

Step 4: Survey the Competition

Vacation rental owners then need to look at what the competition is offering and identify ways to stand out. They can do this by assessing the amenities of similar properties and figuring out what they can offer that their competition doesn’t. For example, maybe other properties in the area have a nice, fenced-in yard, but they don’t have a barbecue grill or outdoor seating area. Or perhaps they have a DVD player but don’t offer free access to streaming services. These seemingly small amenities can make a huge difference when potential guests are choosing between two similar properties in the same local area.

Step 4: Survey the Competition

This is also the point in how to start an Airbnb when short-term rental owners can create their competitive pricing strategy. A great tool to use is AirDNA. You can read our detailed blog article about pricing strategies and how to improve your profits clicking here. Generally, it’s wise to use a dynamic pricing strategy rather than a static one because dynamic pricing takes various factors into account in order to adjust the pricing on a regular basis. It’s essential to think about upfront, ongoing, and maintenance and management costs when calculating the nightly rate for an Airbnb.

Step 5: Renovate, Furnish, and Decorate the Property

After the sale’s gone through and vacation rental owners have identified ways to stand out from the competition, the fun part begins! Renovating, furnishing, and decorating allows hosts to fix up their vacation rentals so that they’re perfect for their ideal guests. Take a look at this article on furnishing vacation rentals and this piece about interior design trends for more in-depth information on this step.

Step 6: Give It a Test Run

At this point, the vacation rental property is nearly ready to welcome guests; the process of how to start an Airbnb is almost complete. But first, hosts should either stay there themselves for a week or two, or invite trusted friends and family members to stay there. This “test run” allows hosts to figure out any final missing pieces or little things that need to be tweaked before a real guest stays at the property. Often, staying at a property will reveal things about it that can go unnoticed if hosts only stop by the property for a few hours here and there to renovate and decorate.

Step 7: Create Listings on Multiple Sites

Now, the vacation rental property is fully prepared and streamlined, and it’s time to create listings! While many new vacation rental hosts turn to Airbnb first, it’s best to list a property on multiple different sites to maximize bookings and revenue. Aside from Airbnb, hosts should be sure to update their business website to allow for direct bookings. They should also check out other vacation rental listing sites like RentalTrader, Vrbo,, and HomeToGo. RentalTrader, in particular, is a great choice for new hosts because it’s simple to sign up and list a property. Plus, host fees are extremely low at just 4.5% per booking.

Step 7: Create Listings on Multiple Sites

When thinking about how to start an Airbnb, remember that good listings lead to more bookings. This means that hosts should concentrate on getting high-quality photos that showcase all that their vacation rental has to offer. The quality of the writing in the description is just as important. Some hosts choose to hire professional copywriters and photographers to help them create the best listing possible.

Step 8: Earn Positive Reviews

One easy way to get more reviews is simply to reach out to guests after their stay has ended and ask them for feedback. Even if guests don’t leave five-star reviews, this still gives hosts a chance to see where they can improve for the next guest stay. Hosting a short-term rental property is a learning experience, and it takes time to grow and become successful.

Step 9: Automate and Delegate

The vacation rental business is up and running, and now it’s time to simplify things! It’s nearly impossible for hosts to do everything themselves, especially once the bookings start to become more consistent. Although hosts may be able to complete the steps of how to start an Airbnb on their own, continuing the business solo can be quite a challenge. This is where hiring others to help and using a good property management system comes into play.

A property management system, or PMS, allows hosts to automate some of the more repetitive tasks, like guest communications and combining calendars from multiple listing sites. Meanwhile, hiring a property manager, an Airbnb cleaning service, and maintenance personnel can further simplify hosts’ responsibilities.

Step 10: Continue to Grow and Scale the Business

Some hosts are happy to work with a single vacation rental property, but others are interested in scaling their business to become much larger. Once the first vacation rental property is established, it becomes much easier to continue building the brand and expanding. Check out this article on scaling short-term rental businesses for more insights on growing successfully.

In this video, our correspondent Margeaux has explained the process of starting an airbnb step by step (with illustrations): 

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