Renting My Apartment on Airbnb Even If I Don’t Own It

You don’t need to own a property to host on Airbnb. Learn how rental arbitrage works, what’s legal, and how to set up and manage your listing the right way.

Renting My Apartment on Airbnb Even If I Dont Own It

0:00

/929.004979

1×

Key Takeaways

• Follow all the steps to ensure your Airbnb is legally compliant, including obtaining licenses, checking local laws, and handling taxes correctly.
• Rental arbitrage is when tenants sublet a property on Airbnb with the landlord’s consent.
• Tips on how to list your property on Airbnb and simplify management with smart automation.

Whether you want to host part-time or list an entire place year-round to build an active rental business, there are legal steps you need to take.

You don’t necessarily have to own a property to host on Airbnb. Business models like rental arbitrage allow tenants to legally sublet with proper lease and approval.

Learn about the legal requirements Airbnb hosts must comply with and how to list your property, whether you’re subletting or renting out a second home.

Why Rent My Apartment on Airbnb

There are three main reasons you would do it:

1. Extra Cash: Earn money from your apartment when you’re not using it, by renting it out to prospective guests.
2. Flexibility: You control when and for how long your property is rented, whether it’s a room, part of your home, or the entire apartment.
3. Potential Full-Time Business: With multiple properties or consistent bookings, Airbnb can become a full-time income stream and a scalable short-term rental business.

Airbnb hosts earn a median annual gross of about $32,000, while top performers can make $8,000–$12,000 per month during peak season (Rabbu). Revenue in the short-term rental space remains strong, despite inflation and standard hotel competition.

Is Renting My Apartment on Airbnb Legal?

Airbnb is legal but regulated, so future hosts should research local laws and clarify all requirements before listing on this platform.

Unless you’re in a city that heavily cracks down on Airbnb, hosting is legal. You can rent out your family home to earn extra income, or turn a second property into an Airbnb-friendly apartment.

Investors turn rental investments into vacation rentals and unique guest experiences, such as unique stays.

Even tenants can sublet their home on Airbnb if they obtain the landlord’s consent (we’ll explain it in detail).

Another, simpler option is renting out a room in your home. Room rentals on Airbnb are allowed even in places with strict short-term rental rules.

What are the Steps to Ensure Legal Compliance for My Airbnb?

Vacation rental sites like Airbnb and Booking.com have earned the trust of countless travelers. Industry research shows that more than 90% of bookings take place via these top OTAs.

Before listing a spare room or home on Airbnb, make sure you comply with local regulations. Follow these steps to create an outstanding listing for your Airbnb guests.

Check local zoning laws

Zoning laws regulate land use, and the city government can designate specific areas for residential, commercial, or industrial use.

In many cities, zoning laws may restrict or prohibit short-term rentals in certain residential neighborhoods to maintain the character of the community and prevent disturbances.

For instance, local regulations in some areas may only permit short term accommodations or allow long-term rentals (typically over 30 days) and ban short-term stays. Compliance with these local laws is crucial for hosts to avoid legal issues.

Obtain the licensing requirements or permits

Many municipalities require hosts to obtain specific licenses or permits to operate short-term rentals legally. These specific laws can include business licenses, special short-term rental permits, or occupancy permits.

The application process often involves fees, safety inspections, written approval and adherence to any local laws and regulations, such as fire safety standards or health codes.

Failure of the rental agreement to have a business license or secure the necessary permits can result in fines, extra fees, penalties, or forced closure of the rental operation.

Follow Homeowners Association (HOA) rules, if applicable

Homeowners associations often have their own rules and regulations that can affect short-term rentals.

These rules are designed to protect the interests of the community and may include restrictions on the minimum rental period, the number of guests, or the frequency of rentals.

HOAs can impose fines or take legal action against homeowners who violate these rules, among other fees, making it essential for hosts to review and comply with their HOA's regulations.

Check city-specific restrictions for Airbnb

In some major cities like New York and Chicago, there are stringent regulations and requirements for short-term rentals.

For example, New York City has strict laws that generally prohibit renting out private room or entire apartments for less than 30 days unless the host is present.

Chicago requires hosts to register their properties, pay taxes, and adhere to specific operational standards, such as providing contact information for emergencies and ensuring the property meets safety codes.

Cities may restrict short-term rentals or set occupancy limits. In Los Angeles, Airbnb is allowed if it's your primary residence. It means that hosts have to live on the property they rent for most of the year, capping unhosted stays at 90-120 nights per year (except for hosts who manage to get an extended home-sharing permit).

You can check local laws for certain cities and regions on the Airbnb website. More specifically, check their Help page.

Be aware of taxes and special fees

It's important to pay attention to the associated fees when renting your extra room on Airbnb. In addition to your regular expenses, you'll need to account for extra taxes and costs related to short-term rentals, such as local tax or Value Added Tax (VAT), depending on your area.

Service fees charged by the platform are another factor, which you can either split with your guests or cover yourself.

Also, the Airbnb income you make is taxable under the 14-day rule.

You don’t have to report or pay taxes on your Airbnb income only if you meet these conditions:

• You rent your property for 14 days or fewer during the calendar year
• You use the property for at least 14 days, or more than 10% of the days it was rented out

To pay taxes in the US, you’ll likely use Schedule E if your Airbnb activity looks more like traditional renting. That means you offer a place to stay, but don’t provide extra services beyond the basics. Schedule C is for active hosts who make business income and provide substantial services (more than just cleaning between stays).

Can I Airbnb My Apartment While Renting?

Yes, tenants can sublet their apartment on Airbnb, but you must have written consent from the landlord. You can think of it as a business deal.

You need the landlord's consent

Most leases don't permit subletting, therefore you must get your landlord's consent in your lease agreement. Building a good relationship with them can facilitate this process.

When discussing the possibility of renting your apartment on Airbnb, offering a compromise, such as increasing your security deposit or rent, may make them more likely to approve.

If your landlord or property manager declines, you should not proceed with renting out your apartment on Airbnb.

If your landlord accepts the proposal, then you start doing rental arbitrage.

How does Airbnb rental arbitrage work?

Subletting a property on Airbnb is called short-term rental arbitrage. This business model is attractive because you don’t need to own the property to list it on Airbnb.

You might wonder how to get a landlord to sign a lease that allows subletting.

Landlords still earn rent, and a profitable short-term rental can be more attractive than a potentially problematic tenant. Because the risk is higher, you need data showing clearly that the property can generate a profit.

The next question is how to structure deals with landlords. Here, you need to think carefully and consult a lawyer. Lease terms for subleasing might include additional clauses for maintenance fees and repairs.

In a profitable market, this model has proven to work for both landlords and short-term rental operators. Some Airbnb hosts built entire businesses around arbitrage models.

In this case, short-term rental hosts are advised to form an LLC and open a business account to protect their operations.

How to List Your Property on Airbnb: Pay Attention to 3 Things

Maximize the appeal of your apartment by decluttering and creating a welcoming environment. Invest in comfortable furniture and high-quality linens. Small touches like fresh flowers and local guidebooks can also make a big difference. And especially:

1. Take professional photos

High-quality photos are essential for attracting guests. Consider hiring a professional photographer.

Listings with professional photos earn 20% more than those without, with Airbnb user research showing professional photos are one of the top three reasons guests book a listing. 

2. Create a compelling listing

Airbnb allows only 500-characters for your property description. Describe all property details regarding your Airbnb property. 

Describe features like high-speed Wi-Fi, flat-screen TVs, streaming services, private spaces, patios or balconies, scenic views, enhanced cleanliness, and proximity to nearby landmarks.

Given that many travelers seek amenities that stan out, emphasizing these in your description can make your property more appealing.

Special attentian pay to create a great title. Include facts like the following in your title:

• Location advantage: “Walk to Old Town”, “Steps from the Beach”
• Experience: “Private Rooftop with City Views”
• Practical value: “Fast Wi-Fi + Dedicated Workspace”
• Amenities people actively search for
• Maximum one emotional benefit (relaxing, quiet, scenic)

3. Set the right pricing for your Airbnb apartment

Pricing your Airbnb listing competitively is crucial for maximizing occupancy and revenue. Here are some key considerations and data insights to help you set the right price:

Research similar listings:

• Look at comparable listings in your area to get a sense of the market rate. Pay attention to factors such as location, size, amenities, and guest ratings.
• Use tools like AirDNA or BeyondPricing to analyze market data and trends in your specific area.

Seasonality and local events:

• Demand for short-term rentals fluctuates based on seasonality and local events. Prices typically increase during peak tourist seasons, holidays, and events such as festivals or conferences.
• For example, cities like Miami see higher prices during Art Basel, and Austin prices surge during SXSW.

Occupancy rate:

• Monitor your occupancy rate and adjust prices accordingly. If your property has a low occupancy rate, consider lowering the price to attract more guests. Conversely, if you are fully booked months in advance, you might be able to increase your rates.
• You can use dynamic pricing tools like the built-in free Airbnb smart pricing tool to adjust prices based on demand.

Guest reviews and ratings:

• High guest ratings can justify higher prices. And as most guests read past reviews. Ensure your property is well-maintained and provides an excellent guest experience to earn positive reviews. Aim for Superhost status by delivering exceptional guest experiences to earn high ratings and justify the price.

Length of stay discounts:

• Offer discounts for longer stays to attract guests looking for extended accommodation. Weekly and monthly discounts can help fill gaps in your calendar and ensure steady income.

How to Manage Airbnb with Smart Automation

Managing an Airbnb can be a time-consuming endeavor, especially for hosts who manage multiple properties or have other commitments.

Property management tools like iGMS offer comprehensive solutions that ease the burden of managing short-term rentals.

Guest messaging

• 24/7 Availability: Automated messaging ensures guests receive timely responses to their inquiries, even when you're not available.
• Predefined Templates: Use customizable templates for common messages such as booking confirmations, check-in instructions, and thank-you notes. This not only saves time but also ensures consistency in communication.
• Trigger-Based Messaging: Set up automated messages to be sent at specific times during booking settings or events, such as a welcome message upon booking, check-in details the day before arrival, and a check-out reminder on the last day.

Guest reviews management

• Automated Review Requests: Promptly request reviews from guests after their stay, increasing the likelihood of receiving feedback.
• Review Monitoring: Track and respond to reviews efficiently, addressing any negative feedback promptly to maintain a positive reputation.

Scheduling for cleaning services

• Automated cleaning schedules: To maintain property standards, implement automated cleaning schedules to ensure your property is always guest-ready after each booking.
• Standardized cleaning checklists: Coordinate with your property manager and cleaning staff by providing checklists and updates to ensure all tasks meet your standards.
• Inventory management: Manage inventory to set guest expectations and keep your property manager on track with supplies and amenities. Keep supplies always stocked, depending on how many guests have booked.

Frequently Asked Questions

What percentage does Airbnb take?

Airbnb typically charges a service fee of 3% for hosts, while guests pay a service fee of around 14%. That's called a split fee. Another option is for the host to pay the entire 14–16% fee.

What are the insurance options for Airbnb hosts?

Airbnb offers Host Protection Insurance, which provides up to $1 million in liability coverage for hosts in case a guest gets hurt or property gets damaged during a stay.

However, it's recommended that most hosts have additional insurance coverage, as Airbnb's policy fine print might not cover property damage in all situations. Consider getting a comprehensive short-term rental insurance policy to fully protect your property.

How can I ensure the safety of my property when renting it on Airbnb?

Ensuring the safety of your property involves several key steps. Invest in security features such as smart locks for remote access management, security cameras at entrances.

Inform guests and comply with privacy laws though. You can install robust alarm systems for intruder deterrence, and motion-sensor outdoor lighting for nighttime safety.

All things considered, renting your Airbnb apartment is a rewarding venture if done correctly.

Leverage property management software like iGMS to handle your operations and ensure a smooth hosting experience.