The Rise of Airbnb Landlords: How Hosts Turn Profit on Short-Term Vacation Rentals

With the share economy, anyone can be a de facto landlord. Or a car driver, cat sitter, gardener — you name it. There’s huge rewards, but also significant risks involved in jumping into emerging industries that are increasingly peer-to-peer.

Real estate is one industry being revolutionized by innovative rental startups like Airbnb, which property owners can utilize to make a fortune. In fact, this new kind of landlord — one that rents out several properties but also keeps their day job — can bring in significantly more money than a traditional one.

How is this possible? In terms of revenue, renting one property for many short-term stays can be more lucrative than renting it to a singular tenant for a year. Twice as lucrative, according to this Bloomberg article. The revolving door of vacation rentals, facilitated and tracked easily online, can bring in a twenty percent profit margin.


The impacts of this change are beginning to reverberate, and not all the vibes are positive. Angry neighbors are irked by noisy partiers renting homes families would gladly buy. Local governments aren’t pleased that these services skirt zoning and safety regulations, nor that they leave properties vacant for months on end. Landlords can also evict tenants if rental agreements don’t allow for subletting.

Local bars, restaurants and businesses, on the other hand, get a boost from the extra tourism, as do startups that compliment vacation rentals — for example, cleaning services and key drop-offs.

So there are many things potential renters and investors should take into consideration when getting into this business. Will the return outweigh the property investment? Are the city’s laws in your favor?  What about the lease?

Anyone with extra space can rent their rooms without much trouble. Airbnb estimates that about 87 percent of hosts are the primary residents in the spaces they rent. But some of the remaining 10 percent operate “Airbnb hotels,” a job that requires only several hours a day of time but can bring in up to six figures a year. This is an opportunity, obviously, but also a hazard when it comes to the aforementioned risks.

It’s clear that where there’s opportunity to hit the ground running with a new and profitable businesses in the sharing economy, many will want to get in on the action. So far, Airbnb is winning its legal battles, clearing the path of obstacles for now. This factor could certainly change, but in the meantime, being your own landlord has never been so rewarding.