How Does Airbnb Work for Owners? Top 10 Questions Answered

Airbnb offers property owners a unique way to earn income, but navigating the platform can take time and effort and feel tricky at first. Questions like “How does Airbnb work?”, “How do I start?”, “How much can I earn?”, and “What if something goes wrong?” often leave potential and current hosts feeling unsure. With so much to figure out, Airbnb hosting can seem more trouble than it’s worth.

If you’re managing a short-term rental, you’ve probably faced challenges like low occupancy rates or confusing processes. Understanding how Airbnb works is the first step to success if you are a first-time host or just looking to improve your current earnings.

This guide will tackle your biggest questions. You’ll discover:

• How Airbnb works for owners.
• How to list your property and attract more bookings.
• Key features like payment processes, discounts, and Superhost status.
• The most common downsides to consider.

Let’s clear up the confusion around Airbnb and show you how to host guests successfully while maximizing your revenue.

How does Airbnb work?

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Airbnb works by connecting people who have extra space with those looking for a place to stay. The platform acts as a marketplace where hosts list their properties—ranging from spare rooms to entire homes—while guests search for accommodations that suit their needs.

For hosts, the process starts with creating a listing. 

You upload photos, write a description, and set availability and pricing. Airbnb charges a small fee per booking, but in return, it provides tools for you to manage reservations and handle payments.

For guests, it’s simple. 

You browse listings, filter by preferences like property location, price, and amenities, and book a stay. Airbnb handles the payment process, which ensures security for both parties. Once the booking is confirmed, you can communicate with the host to arrange details like check-in.

The platform relies on trust and is supported by a review system where both hosts and guests share their experiences to ensure accountability and full transparency.

Do you want to know the biggest secret behind making the most out of your vacation rental management on Airbnb? Here is a quick hint – it has to do with how you communicate both through your listings and directly with your potential guests.

Read the full blog article here to understand how communication can boost your total revenue.

How do I list my property on Airbnb?

Here’s a step-by-step breakdown for listing your property on Airbnb:

1. Create an account – Go to Airbnb’s website or app and sign up as a host. Provide basic information, which includes your name, email address, and phone number.
2. Start your listing – Click on “Host a Home” and follow the prompts to begin. You’ll describe your space, whether it’s a private room, an entire home, or something unique like a cabin or RV.
3. Add property details – Enter your property’s location, number of bedrooms and bathrooms, private rooms (if you have any), and guest capacity. Be honest and accurate to attract the right guests.
4. Upload photos – Take clear, bright pictures of all key areas, including bedrooms, bathrooms, kitchen, and outdoor spaces.
5. Write a description – Craft a compelling summary of your entire property and make sure to highlight unique features like a stunning view, proximity to attractions, or family-friendly amenities.
6. Set house rules – Specify what’s allowed—pets, smoking, parties, etc. This helps guests know what to expect.
7. Define pricing and availability – Decide on your nightly rate and set your booking calendar. You can also enable features like discounts for long-term stays or last-minute bookings.
8. Publish your listing – Review all details, make adjustments if needed, and click “Publish.” 

And just like that, once you’ve completed these steps, your property is live on Airbnb.

Check out this blog post to learn more about getting the most out of your vacation rental listings.

But if you’re short on time, energy, or expertise to list your property on Airbnb (while also making the most out of it), partnering with a professional Airbnb property management company can make the process that much smoother. 

In fact, partnering with an Airbnb property management company such as One Fine BnB can help you:

1. Create your customized listing.
2. Arrange professional staging and photography.
3. Market your rental property on 25+ major sites, including Expedia, Booking.com, Airbnb, Homeaway, VRBO, Kayak, Agoda, and more.

Get started for free

How much money can I earn as a host?

Your earnings as an Airbnb host are primarily based on factors like location, property size, and amenities. In popular tourist destinations or major cities, hosts can earn significantly more due to high demand.

Let’s take a look at a couple of examples below so you get a rough estimate of how much you can earn for three randomly selected locations:

• A well-kept two-bedroom apartment in downtown New York City can earn $3,000–$5,000 per month.
• In smaller tourist hubs like Asheville, NC, a cozy single-family home might bring in $1,500–$2,500 monthly.
• Airbnb hosts who offer unique stays, such as a treehouse in the Smoky Mountains, could charge anywhere between $200 and $400 per night during peak seasons.

Airbnb’s earnings calculator can provide tailored estimates based on your property and local market trends. However, these numbers also depend on factors like occupancy rates, pricing strategy, and seasonal demand.

To increase your profit, focus on offering desirable amenities, competitive rates, and maintaining excellent reviews. While some hosts earn occasional side income, others turn hosting into a lucrative business with thoughtful management.

And to be honest, the thing that makes the most difference between earning small and big here is the revenue price optimization for your vacation rental properties. Read our blog post about vacation rental revenue price optimization to understand how to raise your revenue by as much as 25%.

Then take the “free” 25% extra cash you just earned in less than 5 minutes and outsource your Airbnb property management to a professional company such as One Fine Bnb to maximize your monthly and yearly recurring revenue from your new rental business.

How do guests get the keys if there’s no reception?

Without a reception desk, hosts typically use simple methods to provide guests with keys. Options include:

• In-person hand-off: Meet guests at the property or a nearby location.
• Key lockboxes: Secure lockboxes with a code allow guests to retrieve keys anytime.
• Smart locks: Keyless entry systems provide unique codes for each booking, offering flexibility and security.
• Third-party services: Companies like KeyNest securely store and manage keys for guests.

How does the Airbnb weekly discount work?

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The Airbnb weekly discount encourages longer stays by offering guests a reduced rate for bookings of seven nights or more. As a host, you can set the percentage discount in your listing settings under Length-of-Stay Discounts.

For example, if your nightly rate is $150 and you offer a 10% weekly discount, guests booking a week would pay $945 instead of $1,050. This just makes your property more appealing to travelers who seek extended stays.

To set it up, go to your listing, click Pricing, and adjust the weekly discount rate. Be mindful of offering a discount that balances guest attraction with your earnings. Regularly review your rates to remain competitive while maximizing revenue.

How does payment work on Airbnb?

Airbnb’s online payment system ensures a smooth experience for both hosts and guests. Guests pay the full amount when they book, which includes the nightly rate, a cleaning fee, and additional Airbnb service fees.

For hosts, payouts are released 24 hours after check-in. The amount is automatically deposited into your chosen payment method, such as direct deposit, PayPal, or international wire transfer.

Airbnb deducts a standard service fee (usually 3% for most hosts) from your earnings before the payout. For long-term stays over 28 days, payments are issued monthly.

Airbnb’s payment system ensures both parties are fully protected. This is because funds are held securely until the stay begins, which minimizes risks of fraud or disputes.

How does Airbnb make money?

Airbnb makes money primarily through service fees charged to both hosts and guests. For hosts, a standard fee of around 3% is deducted from the booking subtotal (nightly rate plus cleaning fees). This fee can be higher for Airbnb Plus or hosts with strict cancellation policies.

Guests are charged a service fee, typically ranging from 5% to 15% of the booking subtotal, depending on factors like the reservation cost and length of stay. This fee covers platform operations, customer support, and insurance programs like AirCover.

In addition to bookings, Airbnb offers premium services such as Airbnb Plus and Airbnb Luxe, which feature high-end properties with extra amenities. These listings often carry higher fees.

Airbnb also generates income through its Experiences platform, where users can book activities hosted by locals, which adds another layer of revenue to its business model.

How does the security deposit work?

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Airbnb’s security deposit system protects hosts from potential property damage during a guest’s stay. Some hosts require a security deposit as part of their listing, which is set at their discretion. Airbnb does not charge this amount upfront; instead, it places an authorization hold on the guest’s payment method two days before check-in.

If damage occurs, the host can file a claim through Airbnb’s Resolution Center within 14 days of the guest’s checkout. Airbnb will mediate the claim and, if valid, deduct the cost from the security deposit.

Guests are notified of the hold when booking and released from it shortly after checkout if no claims are made. This system ensures peace of mind for hosts while providing transparency and fairness for guests.

What are Airbnb Superhosts and Airbnb Plus?

Superhosts and Airbnb Plus are designations that highlight exceptional hosts and properties, which makes them stand out to potential guests.

Superhosts are experienced hosts recognized for providing exceptional service. To qualify, hosts must meet these criteria:

• Maintain a response rate of 90% or higher.
• Complete at least 10 stays in the past year.
• Achieve a rating of 4.8 or higher.
• Keep cancellations under 1%.

Superhosts often attract more bookings due to their proven reliability and glowing reviews, making them a favorite among guests seeking trustworthy stays.

Airbnb Plus was a program that recognized listings with outstanding quality, comfort, and design. However, as of November 6, 2023, the Airbnb Plus program has been discontinued. Previously, it required a one-time application fee of $149 and included features like in-person property inspections. Current listings formerly in the Plus program now retain standard marketplace features and can qualify for a Guest Favorite badge if consistently highly rated.

The Guest Favorite badge is awarded to homes based on criteria like overall star ratings, guest reviews, and reliability during stays.

Both Superhosts and high-quality listings remain keys to success in attracting more bookings and increasing earnings.

What is the downside of Airbnb?

For hosts, one downside is property damage, which, although rare, can be costly. Airbnb’s protections like AirCover help, but they may not cover all situations.

Regulatory issues can also be a tough challenge, as some cities restrict short-term vacation rentals or require special permits. Additionally, managing bookings, guest expectations, and cleaning can become time-intensive, especially for high-demand properties.

For guests, unpredictable quality is a concern. Not all listings match their descriptions, and experiences can vary widely. Service fees, cleaning fees, and taxes can also add up, making some stays pricier than expected.

Conclusion

Airbnb offers an incredible platform for earning income through short-term rentals, but it’s not without challenges. Navigating overwhelming information, managing low occupancy rates, and maximizing revenue can feel like an impossible task for some. That’s where expertise and tried-and-tested strategies make all the difference.

The truth is that with the right support, you can overcome these challenges and allow your property to reach its full potential.

It’s time to simplify your journey with One Fine BnB’s expert guidance. 

Get started now by booking a free consultation to uncover how our vacation rental company can help you save time, boost earnings, and reduce stress—all while treating your property as our own.