Growing numbers are listing either rooms in their home or whole properties on Airbnb to help boost their incomes.
There are currently 8 million active listings on Airbnb, across more than 220 countries and regions worldwide. It’s not hard to see the appeal if you’ve got a space you could rent out. According to Airbnb, the typical host in the UK earns almost £5,500 a year on average from taking in guests – enough to cover 69% of the typical annual mortgage payment, and make a big financial impact on those struggling to make ends meet. The majority of UK hosts on Airbnb list one space and 40% say that the extra income helps them to afford their home.
Here, we look at how to go about renting out a property or room on Airbnb, including some of the things you need to watch out for. Remember that there are plenty of other websites where you might be able to advertise your property for short-term stays, but we’re focusing on Airbnb here simply because it’s the world’s largest booking site for rental properties.
How much does Airbnb charge me to rent out my space?
As a general rule, hosts pay a 3% service fee to Airbnb per booking they receive. These fees are a percentage of your nightly cost for the total number of nights booked, along with any extra charges you’ve set, such as a fee if guests bring a pet, or you want to charge a cleaning fee. The service fee is deducted automatically from each payment you receive and you can either split the cost with guests or pay it yourself.
How much should I charge to rent out my property on Airbnb?
Letting out a property as an Airbnb can be expensive, as you’ll need to make sure the property is thoroughly cleaned and sheets are changed before each set of new guests arrive.
Unless you’re able to do this yourself, you’ll need to pay someone to manage the changeovers, so you must remember to factor these costs in when deciding how much to charge per night.
Don’t scrimp on cleaning or keeping the property well-maintained – guests may complain, request a partial refund if the property is untidy and/or dirty, and may leave you a bad review, which could impact the number of bookings you get.
Remember too that you’ll have to pay all the usual bills associated with a property, such as Council Tax, electricity, water, Wi-fi, and so on.
It’s worth checking how much similar properties in your area are being let out for on Airbnb. Bear in mind if yours is more expensive and doesn’t offer anything significantly different, the chances are guests will go for the cheaper option, so consider your pricing carefully.
How do I start renting out my property on Airbnb?
Once you’ve worked out how much you plan to rent out your space for, getting set up on Airbnb is relatively easy. You’ll need to start by signing up to the site using your email and a password of your choice.
Once you’ve done that, the next step is to click on ‘Airbnb your home’ in the top right hand corner of the homepage. You’ll then be directed to a page telling you which information you’ll need to provide in order to list your home. This includes information about the place you’re renting out, where it is, and how many guests it can accommodate. You’ll also need to give your address, but this will only be given to guests once they’ve made a booking.
You’ll then need to add five or more photographs of your property plus a title and description – the site will give you some pointers as to suitable wording. Make sure the photographs are high quality and show your property at its best.
Once you’ve added this information, you’ll need to select a starting price, verify some details, and then you can publish your listing.
If you’ve got any questions, Airbnb will match you with a host in your area who can give you any tips and support you might need. New hosts also have access to specially trained community support agents who can help with things such as account issues or billing support.
Making your property stand out
With countless properties advertised on Airbnb, it’s worth thinking about what you might be able to do to help your property stand out. Is there anything that differentiates it from the competition – for example, is there a hot tub in the garden that guests can use, or are there any other special features that it’s worth highlighting, such as nearby attractions?
Try to ensure it has as broad appeal as possible too. For example, are you willing to allow pets and small children to stay? If so, can you offer them any extras such as dog bowls or a travel cot and high chair for children so that parents don’t have to bring their own? All these little touches can help your property stand out from the rest.
Remember that your role as a host is important too. Making sure you can be reached in case there are any issues is really important, and it’s also a good idea to let your guest know that you can help with any recommendations they might need for things to do or restaurants to eat out at. This will help ensure they leave positive reviews about you, further boosting the appeal of your property.
Who are you targeting?
Think carefully about the sort of guests you want your home to appeal to. You might think that the answer is everyone, but you want to be careful about allowing absolutely anyone to stay at your property. The last thing you might want, for example, is a rowdy hen or stag party renting your property, with the potential for damage if things get out of control.
If that’s a concern for you, it’s worth stipulating that you don’t want any parties. Similarly, if you don’t want any pets because you’re worried about them causing damage, make sure you state that on your property information.
Regardless of your target audience, it’s a good idea to check that any guests who want to rent your property have positive reviews from other hosts before you accept their booking request.
Let your mortgage lender and landlord know
If you have a mortgage on the property that you’re planning to let out on Airbnb, you’ll need to let your mortgage lender know that you’re going to rent it out. If you don’t, then you may be in breach of your mortgage conditions which, in the worst case scenario, could see your lender call in your mortgage debt early.
If you’re only planning to let out a room rather than the whole property, and you’ll be living there at the same time, you may be able to stay on your existing mortgage deal, as long as your lender agrees to offer ‘consent to let’. However, it’s still worth notifying your lender of your plans, so that you can be certain that you aren’t breaking any rules.
Some lenders, such as Barclays, NatWest, and Metro Bank, have rolled out Airbnb mortgage-friendly terms in recent months, which may permit you to advertise your space on Airbnb for up to 90 nights a year, but other lenders still expressly forbid short term lets.
If you need a mortgage for a property you plan to let out on Airbnb, it’s therefore worth seeking professional advice. Your options might include a buy to let mortgage, although these may come with restrictions if you’re using Airbnb, or a holiday let mortgage which is specifically designed for the Airbnb market. Learn more about holiday lets in our guide Five things to consider if you are thinking about buying a holiday let.
Want to speak to a mortgage advisor? Speaking to an experienced mortgage advisor can help you to understand your options and get a great deal on your mortgage.
If you’re looking for expert mortgage advice, you can get a free consultation with an independent mortgage adviser at Fidelius. Speak with a qualified, FCA-regulated, independent mortgage adviser you can trust. Rated 4.7/5 on VouchedFor from over 1,000 reviews.
Similarly, if you’re renting the property you want to let out a room in, you’ll need to check with your landlord that they are happy about this first, otherwise you could find yourself in breach of your contract.
Do I need specialist home insurance if I’m letting my property on Airbnb?
If you want peace of mind that your property will be properly protected when it’s let out, then it’s usually a sensible idea to take out specialist short-term let insurance.
AIrbnb provides free host liability insurance that will cover you if you’re found legally responsible for injuring anyone who stays in your property or in case any of their belongings are stolen or damaged during their stay. It will also provide you with protection if a guest causes damage to any common areas, such as the building entrance or nearby properties.
However, this won’t cover you against any damage that a guest causes to your property or belongings. Airbnb says that you should be covered by Host Damage Protection which is there to reimburse you for certain damage caused by guests if they don’t pay for it themselves. It may also cover extra cleaning service if necessary, such as removing stains left by guests.
Bear in mind that this is NOT an insurance policy and a quick search on the community section of Airbnb reveals that some hosts report they have had issues getting their claims settled in full.
If you’d like the peace of mind that having your own cover could bring, a standard contents insurance policy is unlikely to cover you, so you’ll need short-term letting insurance, also known as short-term landlord insurance. Find out more in our guide What is landlord insurance and do you need it?
How much tax will you pay on income from your Airbnb property?
Any income you get from renting out your property on Airbnb is treated just like any other income for tax purposes. That means you will pay tax on all income that is higher than your personal allowance, which in the 2024/25 tax year is £12,570. You can read more about this in our article How is my buy to let property taxed?
However, there are exceptions. If, for example, your gross annual income from letting out your property is £1,000 or less, then thanks to property allowance rules, this income is not taxable and it doesn’t need to be reported to the taxman. You cannot claim any loss or deduction for property expenses if you use the property allowance relief. Find out more about the property allowance at Gov.uk.
If you are letting out a furnished room in your home, or your whole property if it’s your main residence, you should be eligible for the Rent a Room scheme, which allows you to earn up to £7,500 a year tax free. You must, however, meet the following criteria:
- You must be living in the UK while you let out the room
- The room you let out must be furnished
- The room must be in the main part of your main home when you let it
- The room can’t be used as an office or for any business, although you can still use the scheme if your lodger works in your home in the evening or at weekends, or is a student.
Find your more about the Rent a Room scheme in our guide Renting out a room – What you need to know.
A final thought…
Reviews are a crucial part of Airbnb and can mean the difference between your property being regularly booked or sitting empty most of the year. Your guests will review your home after their stay is complete, and you can post comments about them too. You’ll both get a star rating and these really matter, so you’ll need to be confident that you can make your property into the best possible place to stay. Don’t underestimate the amount of work involved as a host, but bear in mind too that your efforts can result in significant financial rewards over time.
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