When two men living in a San Francisco apartment couldn’t afford their rent, they came up with a billion-dollar idea that forever changed the real estate and tourism industries. They purchased a couple of air mattresses and opened their pad up to the public, marketing it as a “bed and breakfast.”

Fifteen years later, their business, Airbnb, helps more than four million people do the same in 191 countries. Although initially intended to be a tool for tenants needing extra cash, the service has attracted the attention of property owners who recognize the opportunity to rent outside the box.

The pandemic skyrocketed the short-term rental trend, as work-from-home gigs created a breed of digital nomads who crave a life on the move. Additionally, now that the U.S. border has opened to some international travelers, South Florida is one of the most sought-out Airbnb destinations in the United States.

But is it worth it for property owners to tap into this investment tool? Could this be a way to make some money while searching for the right long-term tenant? This article will discuss the pros and cons that potential Airbnb hosts should consider.

Filling an empty rental with short-term visitors could be wise for property owners for many reasons. If landlords struggle to find the right long-term tenant, a few Airbnb guests could offset property costs and buy them some extra time.

Allied Van Lines confirms that more than half of Americans move every year between May and September. Property owners with an empty rental in the off-season could list the space on Airbnb rather than seeking a long-term renter. Waiting it out may give property owners a better pick of candidates, and potentially, higher rent.

And, according to a study created by online lender Earnest, Airbnb is one of the most lucrative ways to make money in the new shared-services economy. The company analyzed data from tens of thousands of loan applicants for two years and found Airbnb hosts make three times more money than workers on apps like Uber, Fiverr or DoorDash. Earnest reported nearly 50% of hosts earned at least $500 a month; some users made more than $10K in that period.

Property owners can check the viability of their location with short-term rental analytics companies like AirDna, too. The website reports units in Miami have an average occupancy rate of 51% and a nightly fee of $280. In Dallas, the prices are slightly lower, with an average nightly rate of $199 and an occupancy rate of 48%.

Keep in mind that Airbnb isn’t a get-rich-quick scheme. There are fees, startup costs and time associated with getting a unit up and running. Hosting a short-term rental can be lucrative, but it can also end up costing property owners and landlords money if they make the wrong moves.

The most significant factor in creating a successful Airbnb is location. States, counties and city governments may have regulations, restrictions and fees on Airbnb operations that could kill a business plan before the first guest even turns a key.

Running a successful Airbnb in Florida or Texas is highly competitive. According to a study commissioned by IPX1031, a qualified intermediary company, seven Florida cities appear in the list of the top 10 locations with the most Airbnb properties.

They are (from highest to lowest):
1. Miami Beach
2. Kissimmee
3. Sarasota
4. Daytona Beach
5. Miami
6. Fort Lauderdale
7. Orlando

But before renting out their residencies, Florida property owners must apply for a license to host a short-term rental with the state if they plan to rent out an entire unit more than three times in a calendar year for periods of less than 30 days or one calendar month— whichever is less between the two.

Texas does not yet have a statewide licensing program, but select cities have adopted their own rules. In Austin, property owners must pay a non-refundable application fee of more than $600 if they wish to rent out their units for periods less than 30 consecutive days.

Failure to go through the proper channels could become an expensive nightmare. In Miami Beach, city fines for unlicensed short-term rentals range from $100 to $2.5K per violation.

With so many competitors in the market, property owners need to stand out to book guests regularly. The most-searched-for qualities on Airbnb’s site include the following perks: pet friendly, pools, Wi-Fi, kitchens and free parking.

Airbnb recommends hosts provide a minimum of one towel, pillow and a set of linens for each guest bedroom. The service suggests hosts keep the space stocked with essential items like toilet paper, soap and cleaning supplies to get a good review from guests. Successful hosts often store extra toiletries onsite to avoid a potential late-night grocery run.

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