You may be on the fence about whether or not to turn your vacation rental property into an Airbnb. It seems like the most popular way to manage your short-term rental. But is it the most profitable? We’ll discuss the host fees involved with owning an Airbnb rental property and how to become more independent from Airbnb.
What are Airbnb host fees?
Each time guests book with you via Airbnb, the platform takes a percentage for themselves. This fee covers costs associated with your listing on their platform, website costs, and other overhead expenses.
How to see the Host Fee on Airbnb
When a guest books your Airbnb, there is a confirmation screen with a price breakdown. They will see:
- Airbnb fees
- Taxes
- Extra fees (i.e., cleaning fees)
- Total price
- The amount hosts receive
You can see this by following these steps:
- Go to transaction history.
- Click on the individual reservation that you want to examine.
- Once you click on the reservation, find the payout.
- You will find the Airbnb service fee here.
What percentage does Airbnb take from the host?
The percentage Airbnb takes from the hosts depends on the options the host selects when setting up their property on the platform.
Split-Fee Structure
Most hosts choose the split-fee structure for their Airbnbs, the original fee-structuring option. With split fees, both the guest and host pay fees.
- Host Service Fee: This fee is most often 3%. But it can vary depending on local policies (i.e., the Italian government makes Airbnbs pay higher fees) or if you opt for Airbnb Plus. Under this fee structure, a $1000 monthly income from your Airbnb would result in $30 in fees.
- Guest Service Fee: Most guests pay around 14.2% for their guest service fee. Airbnb calculates this at checkout, and guests see the details of these fees alongside your listing. If a guest is booking a property for $600, their fees will be $85.20.
Host-Only Fee Structure
The host-only fee structure is a new option that Airbnb is introducing. The host is the only party who pays a fee. This fee ranges from 14-16%. If you’re making $1000 a month from your Airbnb, you can expect to pay $140-$160 in fees under this fee structure.
Why take on all the fees? Airbnb says that customers like upfront pricing, so host-only fees mean the pricing is more transparent. This leads to more bookings. Also, other booking websites use host-only fees, so you can benefit from having the same pricing all over the web. This is good for those that want to diversify.
Host-only fees may not work for everyone, but they give you a second option. Do the math on what works for you.
Airbnb fee calculator: how to calculate your Airbnb host fees
The most popular fee structure that Airbnb hosts choose is the split-fee structure. Airbnb advertises this fee as 3%. But many hosts are surprised when they see fees that go beyond this amount.
Your payout is affected by other factors beyond hosting fees:
- Fees for payment processing
- Local taxes and value-added taxes (VAT)
- Currency exchange rates
- Dynamic pricing, such as long-term pricing
- Discounts
So while calculating the Airbnb host fees for your property is straightforward (just multiply your listed rental price by 0.03), the additional fees are hard to estimate due to so much variability.
Is it worth being a host on Airbnb?
Your earnings on Airbnb will vary significantly based on a large number of factors. According to Earnest, the average Airbnb host earns $924 per month. This amount is meaningful for a side hustle or diversifying your investments; however, it would require a large number of properties to match earnings from a full-time job. But once again, this varies significantly based on a wide range of factors and circumstances.
But Airbnb provides a great way to get into the short-term rental industry. Airbnb is a marketplace with millions of users looking for your property. You don’t have to market your property, and Airbnb promotes your property to users looking in your area. The tradeoff is that you will need to pay for transactions that go through their site.
How to become less dependent on Airbnb as a host
As a rental property owner, you often see your margin shrink. You’re constantly seeing your rental profits go to maintenance, local taxes, HOA, and Airbnb hosting fees. You also never know when a platform like Airbnb will shake up its policies and change the hosting fee. It’s key to develop alternatives to Airbnb, so you’re not so dependent. Here are some ideas so you can diversify.
List your rental property on other channels
Airbnb is not the only place you can list your property. Here are some alternatives to Airbnb:
The key to alternative short-term rental sites is to do your homework on policies and fees. Select the ones that work for you. Invest time in your newly chosen platforms to have other booking sources.
Use a channel manager
Once you list your rental property in multiple places, you want to use a channel manager. This tool will sync up your listings and calendar among various platforms. Channel managers help prevent double bookings and help you stay better organized as a property manager.
Create your own booking website
You no longer have to worry about booking fees when you can book entirely through your own website. The key to this is to target your existing customers. You do this by giving them information and a discount on rebooking in the future through your website. From there, you can collect emails to stay connected with them. As you build your own website for bookings, you can rely on external booking websites less.
