Do you really know just how much Airbnb entrepreneurs are earning on Airbnb? An analysis done by the consultancy LearnAirbnb claims that at least 75 American Airbnb hosts are earning more than $1 million in rental income every year. The information was compiled from looking at nearly seven million bookings from more than 430,000 Airbnb listings and 257,000 hosts across more than 200 cities.
So who are these Airbnb entrepreneurs and what exactly is contributing to their success? Here is some brief insight into the mind of a successful Airbnb entrepreneur.
According to data from AirDNA, the top 5 cities where Airbnb’s highest-earning landlords rent their properties are London, Bali, Cape Town, Havana, and Sydney. In fact, an Airbnb landlord in London earned £11.9 million in a single year, renting out 881 properties.
Airbnb is no longer a community where individuals rent out properties on their own only. Traditional property management companies now account for as many as 1,000 listings at a time on the platform. These are businesses who are employing hundreds of people to manage other people’s vacation homes and second properties.
Now that you know who’s making the most money on Airbnb, you should know that it is still possible for you to get there with hard work. The key is discovering what skills these top hosts have mastered so that you can copy their formulas for success.
So what do the most successful Airbnb entrepreneurs have in common? Here are the 7 most important competencies to becoming a successful Airbnb entrepreneur backed by data.
Airbnb hosts that earn the most are those who are primarily driven to build wealth. Being driven by success can make a dramatic difference in your business. Find ways to manage your business more efficiently so that it can generate more profit with the same input. Employing automation is one of the first steps to do. All professional Airbnb management companies nowadays are incorporating Airbnb management software such as iGMS to save time and money on daily activities. Using third-party services to handle cleaning and maintenance tasks can also be reasonable. This will make it easier for you to control your costs and position your business for growth.
Unlike 80% of Airbnb hosts who maintain just a single Airbnb listing, the most successful Airbnb entrepreneurs have multiple listings. That means that you need to be willing to scale up your business in order to increase your profits from your Airbnb business.
Becoming a top Airbnb entrepreneur isn’t only about having more properties. Three out of four listings on Airbnb earn total rental revenues of less than $10,000 per year. The top Airbnb entrepreneurs are taking in a disproportionate share of the total bookings that are made on Airbnb. According to the survey, the top hosts account for only 8% of the listings while taking home 19% of the total booked revenue.
So how are they doing this? Sound business management when it comes to operating listings with high efficiency is one of the main reasons why. These top Airbnb entrepreneurs have perfected the art of welcoming guests in order to achieve high satisfaction ratings nearly every single time.
Surprisingly, research has found that having perfect 5-star reviews doesn’t actually mean that a host will earn the most on Airbnb. In fact, the data shows that guests actually prefer to rent from Airbnb hosts who are slightly imperfect. Listings with a 4.5-star rating actually account for the majority of the bookings and rental revenue.
Even though you need to be the best at delivering great service to Airbnb guests in order to achieve the most profits, the quality of your property plays a role as well. The report also claims that more than 60% of the gains for higher earning Airbnb entrepreneurs is partially due to the fact that their properties are in better locations. This finding isn’t hard to understand. It only makes sense that a beach house with an ocean view is more likely to attract guests than a single bedroom apartment in a random suburb.
After factoring operating expenses, LearnAirbnb also estimates that these top 1% Airbnb entrepreneurs may actually be taking home $50,000 or more in profits on annual booked revenues of over $150,000. So if you are considering investing in new properties in order to increase your Airbnb income, you must also learn how your choices in real estate will affect the future earnings of your Airbnb business.
Successful Airbnb entrepreneurs are also exceptional at weeding out bad guests who cause property damage and leave bad reviews. This is apparent from the study which reported that concern about theft and damage was a major concern for 18.5% of Airbnb hosts when they started on the platform. After being hosts for just two months, only 1.6% of Airbnb hosts see these issues as their biggest headache.
Developing guidelines for the types of guests that should be permitted to stay at your property can make a major difference in your ratings and earnings from your Airbnb business. The sooner you perfect these guidelines, the better it will be for your bottom line. Fewer guest-related problems will also make it easier for you to maintain your Superhost status, which all top Airbnb entrepreneurs have achieved.
If you want to become a top Airbnb entrepreneur, you need to have a plan for growing your business. As evidenced by the findings of this study, the majority of Airbnb hosts need to stop treating their businesses like a side gig if they want to compete for the top spots that the most successful hosts currently occupy. The top Airbnb hosts are professional companies. So if you want your Airbnb business to rake in massive profits, model your Airbnb business after professional management companies.