Airbnb Startup Cost

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Airbnb Startup Cost: A Comprehensive Guide for First-Time Hosts

Get a step-by-step guide to estimating your Airbnb startup cost & exactly what you’ll need to spend during your first year as an Airbnb host.

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I'm Sabrina, an Airbnb host coach who knows starting your own short-term rental biz can quickly get waaaay too complicated. But it doesn't have to be. I help first-time Airbnb hosts like you go from overwhelmed 
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Getting ready to start your first Airbnb?

If so, you probably already scoped out the perfect location and estimated your potential revenue.

Maybe you’re even feeling addicted to Zillow and are non-stop dreaming about the day you’ll find the perfect Airbnb property (and that your offer will actually be accepted which, let’s face it, is half the battle these days.)

And, because you’re a fantastic future Airbnb host, you know that you’re still missing one important thing:

You need to estimate the cost of starting your Airbnb.

Well, you’ve come to the right place.

In this post, you’ll get a step-by-step guide to estimating your Airbnb startup cost. Read on for a breakdown of exactly what you’ll need to spend during your first year as an Airbnb host.

Important: This post is intended to do two things: (1) give you a ballpark estimate of your potential expenses and (2) help you plan for the types of expenses you’ll have in your first year of Airbnb hosting. While this information is incredibly valuable (if I do say so myself), it’s important to note that your expenses will undoubtedly differ from what’s below.[1]

This post may contain affiliate links. If you click a link and make a purchase, I may earn a commission at no additional cost to you. Read my full disclosure policy here.

Airbnb Startup Cost Guide: How Much Does It Really Cost to Start an Airbnb?

1. Furniture & Supplies

Airbnb Living Room
You’ll probably need more furniture & supplies for your Airbnb than you expect | The Realist

Furniture and supplies – this expense is a big one.

The time it takes to plan, find, and set up all of your furniture and supplies (100+ essential items!) really adds up.

And so does the cost.

Here’s my estimate, based on all the items I would buy today for a one-bedroom, one-bathroom Airbnb:

  • Entryway: $953
  • Kitchen: $1,444 (including cooking supplies, a full dining room setup, and single-use items that guests love)
  • Living Room: $4,105
  • Bedroom: $1,564 (per room)
  • Bathroom: $342 (per bathroom)
  • Miscellaneous Supplies: $349
  • Restock: ~$2,000
    • You’ll need to restock certain items as needed, like linens that get stained, kitchen utensils that are no longer usable, or hand soap when it runs out

Total Furniture & Supplies Cost: $11,402 (incl. 6% sales tax)

Get a line-by-line breakdown of each item in these rooms with this free downloadable:

2. Pricing Tool

One of the most important factors in determining your overall success is your pricing on Airbnb.

Many hosts (like me) use pricing tools to optimize their nightly rates.

My favorite Airbnb pricing tool is AirDNA.

With AirDNA, you’ll get a forecasted nightly rate for every single available date on your Airbnb listing.

You’ll also be able to see comparable occupancy rates, booking lead times, and seasonality for your area. All of this data helps you make informed pricing decisions for your Airbnb.

AirDNA’s monthly subscription costs as little as $11/month (depending on where your Airbnb is located.)

Read more about how AirDNA helps Airbnb hosts optimize their pricing here.

Pricing Tool Subscription: $40/month*

*Since AirDNA subscription costs vary by location, I’m just using the cost for my Airbnb.

3. Airbnb Host Fees

Airbnb charges every host an Airbnb host fee of 3% of revenue (revenue being your nightly rate + cleaning fees.)

Airbnb host fees cover the cost of Airbnb customer support, AirCover, and educational resources for hosts.

Since the average Airbnb host earns $924/month (but, don’t worry, you can make much more than that!), the average host fee is $28/month (3% of $924.)

Airbnb Host Fee: $28/month

Recommended: Airbnb Host Fees: Are They Worth It for Airbnb Hosts?

3. Insurance

The good news about listing your short-term rental on Airbnb is that bookings made through the Airbnb platform are covered by AirCover.

AirCover provides Airbnb hosts with $1MM in liability insurance and $1MM in damage protection. It’s great coverage at no additional cost to hosts or guests.

That said, I don’t recommend relying solely on Airbnb’s insurance coverage. It might not cover your specific needs.

If you own your Airbnb property, you’ll have to pay for homeowner’s insurance. So, see if that policy covers short-term rentals. If not, consider purchasing a separate policy that does.

For the sake of putting together a thoughtful budget, let’s use the 2019 U.S. Census Bureau’s nationwide average for insurance coverage:

Insurance Coverage: $107/month[2]

To get a more accurate estimate based on your property’s location, you can access the Census data here.

4. Mortgage & Property Taxes

Just like everything else on this list, mortgage payments differ from host to host.

Your mortgage payment depends on many factors, including your purchase price, downpayment, interest rate, and mortgage term.

Not to mention, if you’re renting out a room in your home or own your property outright, you might not have any mortgage payments at all (lucky you!)

So, let’s use the 2019 U.S. Census Bureau’s nationwide averages again:

Mortgage Payments: $1,297/month[2]

Property Taxes: $298/month[2]

Important: for simplicity, this estimate does not include your down payment and closing costs. You can choose whether or not to include those costs in your own estimate.

5. Homeowner’s Association Fee

Not all properties have a homeowner’s association (HOA). Of those that do, the HOA dues can vary widely.

If you have an Airbnb property in mind, you can often find the cost of HOA dues on the property listing; if it’s not there, ask the listing agent.

HOA Dues: $170/month[2]

The balcony at my Lake Tahoe Airbnb | The Realist
If your Airbnb is a condo (like mine), you’ll need to pay HOA fees | The Realist

6. Utilities

Utilities include things like water, sewage, electricity, gas, trash, and internet.

To get the most accurate estimate for your Airbnb, research local utility providers.

Utility Costs: $266/month[2]

Airbnb Hosting Tip: High-speed internet matters to guests. Before you’re fully set on an Airbnb property, confirm you can get high-speed internet there.

8. Occupancy Taxes

Guests pay occupancy taxes when booking (how much they pay depends on your Airbnb location.)

Airbnb then remits payment to the appropriate taxing authorities on your behalf.

So, you don’t need to worry about paying occupancy taxes or include them in your Airbnb startup cost estimate.

Occupancy Taxes: $0/month

9. Cleaning Fees

First of all, you should know that you specify the cleaning fee for your listing, and it can be any amount you choose.

Learn how to set a cleaning fee that maximizes profits.

When guests book, they’ll pay that cleaning fee in addition to your nightly rate.

And, just like your nightly rate, Airbnb will include the cleaning fee in your payout for that booking.

You’ll then pay your cleaning crew directly.

So, your cleaning fee is a total pass-through and not an expense you need to account for.

That said, you’ll likely pay for a few cleanings yourself throughout your first year as an Airbnb host.

At my Airbnb, I paid for cleaners once before I took listing photos, once before my first guest checked in (because I was living there at the time), and every time I visited for a property maintenance check.

All in all, I paid my cleaners four times in the first year. At $195 per cleanning, that’s a total of $780.

Cleaning Costs: $780/year (paid by you as a host, not your guests)

10. Renovations

Renovating your property before you list it on Airbnb is totally optional, but highly recommended.

When looking at listing photos, guests want an Airbnb that looks light, bright, and well taken care of.

While staying at your Airbnb, guests want it to feel clean, spacious, and comfortable.

Make sure your Airbnb really wows guests by investing in thoughtful renovations.

To ensure my Airbnb achieved this, I invested in three impactful upgrades:

  1. White walls (a major upgrade from the multiple shades of cream it previously had)
  2. Laminate flooring (goodbye carpet, hello durable, hardwood-looking floors)
  3. Recessed lighting throughout (making the whole property light, bright, and modern)

Total Renovation Cost: $30,038

11. Short-Term Rental Permit fees

Depending on where your Airbnb is located, you might be required to follow specific short-term rental regulations, such as getting a permit.

The cost of receiving a permit varies, of course. My short-term rental permit cost $621.

STR Permit Fee: $621/year

12. Maintenance

I recommend setting aside a maintenance budget for anything unexpected that comes up.

Here are a few unexpected maintenance expenses that came up during my first year as an Airbnb host:

  1. Replacement keyless entry

A few months after I started my Airbnb, I decided to replace my original keyless entry (which never worked well) after a guest got locked out at 3 AM. Don’t buy that one. Buy this fantastic Kwikset keyless entry

Replacement Cost: $195

  1. Plumbing maintenance and a new water heater

When I bought my property, I didn’t realize the water heater was way past its typical life expectancy.

In fact, I didn’t find that out until six months after opening my Airbnb, when I happened to be there for a property maintenance check. That’s when, to my total surprise, my hot water heater completely stopped working.

I got really, really lucky by being there at just the right time. It would have been a much more expensive (not to mention stressful) issue if a guest had been staying there when the water heater went out.

All that’s to say, regular property maintenance checks are crucial. And unexpected plumbing needs come up from time to time.

Unexpected Plumbing Costs: $3,778

  1. Handyman

If you manage your Airbnb remotely, you might need to hire a handyman from time to time to fix small issues your guests tell you about.

A few months after opening my Airbnb, I hired a handyman to fix a door that kept falling off the tracks, an interior door handle that accidentally got locked, blinds that completely stopped working, and towel rods that constantly fell off the wall.

Even though I lived at my property before listing it on Airbnb, I still wasn’t able to catch all these unexpected issues myself!

Hiring a handyman to fix these things cost $246 (and…honestly… their work wasn’t great so I ended up redoing almost all these things myself…ugh.)

Handyman Cost: $246

Major Unexpected Maintenance Expenses: $4,219

Airbnb Host Tips
It’s surprising how many things need maintenance at your Airbnb | The Realist

Airbnb Hosting Tip: If you’re managing your Airbnb remotely, don’t forget to include travel expenses for regular property maintenance checks.

Total Airbnb Startup Cost (Annual)

  • Furniture & Supplies: $11,402
  • Pricing Tool: $288 (including a 40% discount with AirDNA’s annual subscription)
  • Insurance: $1,284
  • Airbnb Host Fees: $336
  • Mortgage & Property Taxes: $19,140
  • Homeowner’s Association Fee: $2,040
  • Utilities: $3,192
  • Occupancy Taxes: $0
  • Cleaning Fees: $780
  • Renovations: $30,038
  • Short-Term Rental Permit Fees: $621
  • Unexpected Maintenance Costs: $4,219

Total Estimated Airbnb Startup Cost: $73,313

Important Things to Note

[1] While I did my best to provide you with accurate estimates, your costs WILL be different than what’s captured in this post. Here’s why:

  • You’re not going to buy exactly what I used in my estimate at exactly the same price
  • You can (and should!) try to reduce costs by using items you already have (IF they’re in great shape)

That’s why each section of this post explains how I got to that estimate and how you can calculate a more accurate number for yourself.

Additionally, this post doesn’t include everything you might buy for your Airbnb. Some additional things to consider:

  • Non-essential items like decorations and special amenities
  • Additional costs associated with having more than one bedroom and bathroom
  • Downpayment and closing costs of buying your Airbnb property
  • Additional fees and taxes specific to your property
  • Costs specific to owning a single-family home, such as lawncare
  • Other things I’m probably forgetting

[2] To estimate property-related expenses (i.e. mortgage, homeowner’s insurance, property taxes, and utilities) I’m using the U.S. Census Bureau’s nationwide averages based on 2019 census data from the American Housing Survey (try saying that 10 times fast!) To get a more accurate estimate based on your property’s location, you can access the AHS data here.

Takeaway

I hope I didn’t scare you away with the total cost!

(Honestly, seeing that number all totaled up in one place even scares me a little…)

Remember, your personal costs are going to fluctuate depending on your individual property and what makes sense for your business.

Don’t just look at this big number and change your mind about starting your first Airbnb.

Instead, use my free profitability calculator – which takes both your expected revenue and costs into consideration – before deciding whether or not becoming an Airbnb host is right for you:

Save this post for later:

Any feedback or questions? Let me know in the comments.

Disclaimer: All content on this website is for informational purposes only. You are taking all provided information at your own risk. We are not financial, real estate, legal, investment or other professionals. Nothing on this website should be construed as professional advice. We will not be liable for any loss or damage of any nature. Additionally, we are not agents or employees of Airbnb. For more information, read our disclaimer.

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I made $85,000+ my first year Airbnb hosting. Now, I’m sharing all my Airbnb hosting tips so you can build your own insanely profitable business.

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I'm Sabrina,
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