Many new hosts often wonder about the costs involved in listing a property on Airbnb. The good news is that you won’t need to pay anything right away to create your listing—it’s free to do so! However, there are a few expenses you should be aware of when it comes to hosting on Airbnb. These include service fees that Airbnb charges, as well as the various costs involved in getting your rental ready and managing it. Here’s a simple overview of the typical expenses you might face:
Airbnb Service Fees:
Airbnb takes a small fee from each booking, usually around 3% of the total cost for most hosts in Australia. When guests book a place, they may also pay a service fee, which can be about $30 if the total price for a night is around $200. Some more experienced hosts might choose a different fee system where guests don’t pay a fee, but hosts pay a higher percentage of about 14–16%. This setup is less common for individual hosts. In general, you can expect that about 3% of your booking amount will go to Airbnb. This fee helps cover things like advertising, handling payments, and customer service.
Property Setup Costs:
Before you start hosting guests, it’s important to prepare your property for them. This can involve some expenses, like buying new furniture, bedding, kitchen items, and toiletries. You might also want to get a key lockbox for easy self-check-in. If your space isn’t quite ready, consider giving it a deep clean or fixing any small issues. Hiring a professional photographer to take great photos can really help your listing stand out.
The costs can vary a lot: setting up a single room might cost a few hundred dollars, but if you’re fully decorating an empty apartment, it could be several thousand. Most of these costs are one-time investments that can make your property more appealing and allow you to charge higher rates for each night’s stay, which could help you earn back the money you spent.
Cleaning and Maintenance:
Make sure your home is clean and in good shape for each guest. You can either clean it yourself or hire someone to do it for you. Hiring a cleaner usually costs between $70 and a few hundred dollars, depending on how big your place is and where it’s located. Many hosts add a cleaning fee to help cover this cost, but be careful not to set it too high, as this could turn guests away and lead to lower ratings. Also, remember to set aside some money for regular maintenance and repairs since things can break or wear out over time. It’s a good idea to save a little from your earnings for things like gardening or pool maintenance to keep your guests happy.
Utilities and Supplies:
When you host guests on Airbnb, you’ll need to cover the costs of utilities such as electricity, water, gas, and internet. These expenses can add up, especially if you have guests staying back-to-back or if they use a lot of energy. You’ll also need to provide some basic supplies, like toilet paper, soap, and coffee, which can seem small but can really add up. While giving guests a welcome gift, like a bottle of wine or special local snacks, isn’t necessary, it can help you get better reviews. Additionally, you should keep in mind the costs for cleaning bed linens and towels, whether it’s from buying detergent or using a laundry service.
Insurance and Registration Fees:
When upgrading your insurance, keep in mind that it might lead to higher monthly payments. It’s a good idea to compare different offers for short-term rental insurance. Some insurance companies provide optional add-ons for a small extra cost, while others require separate plans just for short-term rentals.
Additionally, be aware that there may be registration fees for renting out your property. For example, in New South Wales, there’s an annual fee of about $65 for registering, while in Western Australia, the fees can vary depending on the local council.
In Victoria, a new rule will charge a 7.5% tax on your rental earnings, which means you’ll have less income. Also, don’t forget to consider local costs, like higher property taxes or extra fees for tourism, when figuring out how much you might actually earn from renting out your place on Airbnb.
Your Time (or Labor Costs):
Running an Airbnb involves a lot of work, such as talking to guests, cleaning the space, promoting the listing, and managing check-ins and any problems that arise. Although you may not spend money directly, the time you put in—usually around 5 to 10 hours a week—should be seen as a cost. Some hosts feel that this time commitment is too much and decide to hire management services, turning their time into a financial expense. It’s important to note that being a caring host can lead to better ratings and encourage guests to return, which makes the effort worth it in the end.
Tip: It’s a smart idea to maintain a straightforward spreadsheet that lists all the costs associated with your hosting activities. This includes everything from new towels to monthly utility bills and any repairs you might need. Keeping track of these expenses will help you see how much money you’re making and can be really helpful come tax season, as many of these costs can reduce your taxable income from hosting on platforms like Airbnb in Australia.