The short term rental market has exploded since the 2008 inception of Airbnb. By 2013, articles -- like “Secrets Of Running A Six-Figure Airbnb Business” from Fast Company -- began popping up all over the internet. These articles lauded the incredible success of hosts on the platform. Short-term rental property income has become a secondary source of income for hundreds of thousands of Americans. Today, Airbnb is worth almost as much as the Marriott International hotel chain -- over $20 billion in early 2020. Listing a property as a short-term rental on Airbnb or other platforms may be most profitable and effective for homeowners with multiple properties. As explained in the article “Dealing with a Double Mortgage,” buyer-sellers who have purchased a new home but not yet sold their old home can be on the hook for twin monthly housing payments.

Short-term rental property income from their first home can somewhat or totally absolve a buyer-seller’s second set of payments. Nick Wallace of financial statistics company SmartAsset explains this in his article “Where Do Airbnb Hosts Make the Most Money?” He writes that renting out a home can bring in more than you might expect. Wallace determined the “average expected annual profit of Airbnb hosts renting out a full two-bedroom apartment or house” to be $20,619.00. Bank of America estimates the average monthly housing payment for American adults to be $1,483. (This estimate includes property taxes.) This totals $17,796 per year. As such, buyer-sellers who list their old home as a short-term rental, on average, could fully cover their second set of housing payments. Follow below to learn more about how the short-term rental market functions today. Learn more about how hosts can make the most of their short-term rental property income.

How to Maximize Short-Term Rental Property Income: Appeal to Business Travelers

According to Forbes contributing writer Johnny Jet in his article “Are Business Travelers Using Airbnb?,” companies frequently rent through Airbnb. According to Jet, Airbnb reported that 250,000 companies used the platform for business trips. The statistic -- released in 2017 -- represent a significant increase from the “250 companies that traveled with Airbnb” in 2015. Still, the majority of Airbnb’s business comes “from personal stays and tourism activities.” Jet explains that this demographic of renters represents 90% of all Airbnb rental revenue. However, Jet notes, Airbnb has begun pivoting towards business travel. The company has described it as the “‘next frontier’ as they try to provide reasonably priced accommodations with a personal touch.” A number of properties on Airbnb now describe themselves as “business travel ready,” with the company even providing a filter for this attribute. 

Making a short-term listing “business travel ready” with “internet, a laptop-ready workspace...and travel essentials” could be a big boon to hosts. Business travelers are especially attracted to entire house listings, Jet explains. This is because an entire team can “sleep under one roof." Aggregating all workers in one space "can be cheaper than separate hotel rooms and provides the opportunity to work in a common area.” Short-term rentals outfitted with workspaces for business travelers have also become more attractive than hotel stays for extended stays. Jet notes that “Airbnb business homes can be more [cost-]effective than extended stay hotels.” This makes them the better choice for those in town for a longer-term project. Even in 2020 short-term rentals marketed towards businesses have done fairly well, explains Steven Deane in his article “2020 Airbnb Statistics” for StratosJets. Deane writes that “the number of people booking Airbnb stays instead of hotels for business trips is rising.” As such, buyer-sellers dealing with a double mortgage might bring in more short-term rental property income if they accommodate business travelers. 

The Cost of Hosting a Short-Term Rental Listing

Managing a short-term rental property is extremely time-consuming. From responding to bookings and preparing the space for arrival to managing requests and cleaning the property after each renter, the time-cost adds up. One poster on the Airbnb community forum -- calculated that for each night she rents her property, she spends an average 11.5 hours managing. In response to the original poster, a commenter agreed, noting that “11 hours a week sounds like the right average.” The commenter wrote that she spends “an hour or two a day on average.” An article published by hospitality blog Guest Ready estimates hosts of short-term rentals spend a shocking amount of time managing. The site explains hosts spend an average of “2-3 hours a day managing [their] property and between 5-8 hours on days where [they] have a change-over of guests.” 

The article “Airbnb vs. Long-term Rentals,” published by financial blog Women Who Money, recommends considering the tasks required of managing a short-term rental. They recommend considering all these responsibilities before deciding to handle everything on your own. The blog explains that “answering calls and emails" and handling “turnover and cleaning in between rentals" take up enormous amounts of time. The site notes that even updating your listing with photos and new information can take time away from other areas of your life. The article “How to Hire an Airbnb Property Manager” by Hostfully adds that conducting market research takes tons of time. As does learning housing laws and performing tenant verification. Though time-consuming, performing market research will allow you to set the appropriate rates for your rental. Hostfully explains that this “makes sure you are priced competitively and...reducing vacancies.” Verifying guests by filtering through “prior ratings and reviews” each time a listing is booked takes time too. However, one of the most time-consuming activities may be attaining enough knowledge of relevant housing laws. The article explains that “having a solid understanding of tenant-landlord laws and...housing regulations will reduce the risk of incurring penalties.”

Why a Property Manager is Your Best Bet

Given the immense time commitment, financial investment, and marketing expertise required to manage a short-term rental, hiring the right team is crucial. Nick Wallace, in his article “Where Do Airbnb Hosts Make the Most Money?” for SmartAsset, notes that those who slack off reap fewer rewards. Wallace writes that “in general, ‘hands-off’ Airbnb hosts can expect occupancy rates (and revenue) at least 15% lower” than hands-on hosts. Hiring a property manager means ensuring renters of a hands-on team. According to Hostfully, hiring a team will save you from the headaches of marketing, cleaning and handling the customer service side of managing a short-term listing. 

The article explains that short-term listing property managers typically have “in-depth knowledge of vacation rental marketing fundamentals." They also have "a history of implementing a diverse set of marketing strategies to boost listings.” They will employ a marketing strategy you would likely not have the time or expertise to engage with. This typically includes social media and email campaigns as well as cross-posting across rental sites. They will also typically bring knowledge of SEO (search engine optimization) tactics, which will help improve your short-term rental’s search ranking. Overall, Hostfully notes, hosts should expect their property manager to “set the right rental rates" and “market your property." They should also “find high-quality tenants" and “manage maintenance and repairs." Above all, they should “have a solid understanding of...laws and regulations,” and offer exceptional customer service.

Buyer-Sellers Can Earn Short-Term Rental Property Income While Their Home is on the Market

According to the article “Dealing with a Double Mortgage,” those "who have purchased a new home before selling their old property can recoup financial loss by...renting out their old home while it is on the market.” Data exists to back up this claim. Forbes writer Vanessa McGrady explains this in her article “7 Pro Tips To Help Your Home Sell Faster, For More Money.” McGrady writes that “according to the National Association of Realtors, for every $100 invested in staging, the potential return is $400.” According to “Dealing with a Double Mortgage,” “staged homes not only sell for more than unstaged homes, but...an average of 87% faster.”

Sandpiper stages homes on the market just as they would any other MLS listing. However, they fill each home with usable furniture so that the property is simultaneously ready for short-term rentals and open houses or showings. Sandpiper explains that their services can “create an income for homeowners by...letting [their] verified renters stay during the time house is for sale.” In addition to staging/furnishing the home, Sandpiper lists each property on multiple reputable short-term rental sites in order to produce short-term rental property income. This extra cash allows buyer-sellers to keep their home on the market as long as necessary while also absolving that second set of monthly payments.