Airbnb Expenses: What Do You Need To Account For As A Host?

Running a successful Airbnb property requires more than just listing your space online and waiting for bookings. As a host, understanding the complete financial picture—including all expenses associated with your short-term rental—is crucial for calculating profitability and setting realistic revenue goals. Let’s explore the comprehensive list of Airbnb expenses every host should account for to maximize their rental’s money-making potential.

Understanding Airbnb Expenses

Creating a profitable short-term rental business means mastering both traditional property ownership costs and expenses unique to the Airbnb hosting experience. 

Many new hosts focus exclusively on potential income while underestimating the variety of expenses that can significantly impact their bottom line.

By understanding and anticipating these expenses from the beginning, you can develop more accurate financial projections and achieve better returns on your investment.

Initial Startup Costs For Your Airbnb Business

Getting your Airbnb business off the ground requires several upfront investments before you welcome your first guest. 

These initial expenses include:

Property Acquisition Costs

If you’re purchasing a property specifically for short-term rental purposes, these costs typically include:

• Down payment
• Closing costs
• Property inspection fees
• Initial renovations or repairs
• Legal fees

Furnishing Your Airbnb Property

One of the most significant startup expenses is properly furnishing your rental property. 

Industry estimates suggest that furnishing costs vary widely based on property size, location, and target market:

• Budget-friendly basic furnishing: $3,000-$5,000 for a one-bedroom apartment
• Mid-range furnishing: $6,000-$12,000 for a two-bedroom home
• Luxury furnishing: $15,000+ for a premium experience

These costs cover essential furniture such as beds, sofas, dining tables, and chairs, plus decorative elements that create an inviting atmosphere for guests.

Essential Amenities and Supplies

Beyond furniture, you’ll need to invest in:

• Kitchen equipment (cookware, dishes, utensils, small appliances)
• Linens (sheets, towels, blankets—at least 2-3 sets of each)
• Bathroom essentials (shower curtains, bath mats, starter toiletries)
• Electronics (TV, Wi-Fi router, potentially smart home devices)
• Cleaning supplies
• Welcome book and emergency information

Technology and System Setup

Modern Airbnb hosting typically requires:

• Smart locks or keyless entry systems
• Security cameras for exterior areas
• Home automation systems (thermostats, lighting)
• Property management software
• Channel management tools
• Dynamic Pricing Tools

Ongoing Operational Expenses

Once your property is ready to welcome guests, you’ll need to manage recurring expenses that directly impact your profitability.

Property-Related Expenses

These fundamental costs exist whether you’re operating a short-term rental or not:

• Mortgage payments
• Property taxes
• HOA fees (if applicable)
• Property insurance
• Utilities (water, electricity, gas, internet, cable/streaming services)

Airbnb-Specific Operating Costs

Short-term rentals have unique operational requirements:

1. Cleaning and Turnover Services

Professional cleaning between guests is non-negotiable for maintaining positive reviews. Depending on property size and location, cleaning fees typically range from $25- $50 per hour or $100- $300 per turnover.

2. Maintenance and Repairs

Short-term rentals experience more wear and tear than traditional long-term rentals, requiring:

• Regular preventative maintenance
• Appliance servicing and replacement
• Quick-response repairs for guest issues
• Seasonal maintenance (HVAC systems, outdoor spaces)

3. Restocking Consumables

Budget for regularly replenishing:

• Toilet paper, paper towels, and tissues
• Soap, shampoo, and conditioner
• Coffee, tea, and basic pantry items
• Cleaning products
• Light bulbs and batteries

Airbnb Platform Fees

As an Airbnb host, you’ll incur service fees for using the platform:

• Split-fee structure: Approximately 3% of the booking subtotal charged to hosts
• Host-only fee structure: Approximately 14-16% of the booking subtotal (no guest service fee)

Professional Services

Many successful hosts rely on professional support:

• Property management (typically 15-30% of rental income)
• Accounting and bookkeeping services
• Tax preparation
• Legal services and consultations
• Photography for listings

Insurance and Protection Costs

Proper insurance coverage is essential for protecting your investment and limiting liability.

Specialized Short-Term Rental Insurance

Standard homeowner’s policies often don’t adequately cover commercial short-term rental activity. Specialized short-term rental insurance typically costs 2-4 times more than traditional homeowner’s insurance, covering:

• Property damage by guests
• Liability protection
• Loss of business income
• Theft and vandalism

You can also consider signing up for Aircover: insurance provided by Airbnb.

Marketing and Promotion Expenses

Standing out in a competitive market requires investment in:

Professional Photography

High-quality, professional photos significantly impact booking rates, typically costing $200-$500 for a complete property photoshoot.

Enhanced Listings and Promotions

• Premium listing placement fees
• Promotional discounts for new listings
• Special offers during off-seasons

Additional Marketing Channels

• Direct booking website and maintenance
• Social media marketing
• Email marketing to previous guests
• Listing on multiple platforms (beyond Airbnb)

Administrative and Business Expenses

Running a successful Airbnb business involves administrative costs:

Business Formation and Licensing

• Business registration fees
• Short-term rental permits and licenses
• Business license renewal fees
• Tax registration fees

Record-Keeping and Financial Management

• Accounting software subscriptions
• Banking fees for dedicated business accounts
• Payment processing fees
• Mileage and travel expenses related to property management

Tax Implications and Deductions

Understanding tax obligations is crucial for accurate financial planning:

Income Tax Considerations

Short-term rental income is typically reported on Schedule E (Supplemental Income and Loss) if you provide minimal services to guests, or Schedule C (Profit or Loss from Business) if you provide substantial services.

Deductible Expenses

Many Airbnb-related expenses may be tax-deductible, including:

• Mortgage interest
• Property taxes
• Insurance premiums
• Utilities
• Repairs and maintenance
• Professional services
• Platform fees
• Furniture and equipment (depreciated over time)
• Travel expenses related to property management

Working with a tax professional familiar with short-term rental properties can help maximize legitimate deductions while ensuring compliance.

Maximizing Profitability Through Expense Management

Strategic expense management can significantly impact your bottom line. The first step to understanding expenses is understanding your market.

📌NOTE:

You should understand your rental potential if you’re new to the market or are just exploring an Airbnb investment. This will help you understand your profitability and create an accurate projection of your short-term rental business. 

PriceLabs’ Revenue Estimator Pro provides you with data-driven insights into potential earnings based on actual market performance, helping set realistic financial expectations.

This tool will not provide you a comprehensive report of your projected revenue and income because this does not account for the variables involved.

With the Revenue Estimator Pro, you would be able to get in-depth income forecasting and projections. You should also give your dashboard a name, just so it is easier for you to identify it later.

Market performance directly impacts your performance. Use PriceLabs’ Market Dashboard to identify similar properties in the market.

With PriceLabs Market Dashboard, you can create custom comp sets to compare the other listings in the market with yours. 

This will help you understand the supply in the market:

1. How many listings are available? (More listings = higher demand)
2. What are their average prices and occupancy rates?
3. What kind of amenities and property types are popular?

In PriceLabs Market Dashboard, you can also find the amenities that are the most popular in your area and the ones that are the most profitable. 

In addition, you can also understand the cleaning fees that the other hosts in your area are charging. 

Consider Commissions and Airbnb Expenses in Your Pricing

You should now consider all of the commissions and fees to your pricing with PriceLabs Neighborhood Data.

You could add a 15% markup on Airbnb and an 8% markup on Vrbo to account for Airbnb service fees and Vrbo host fees.

To simplify things, the Markup/Markdown feature in the Future Prices and Competitor Calendar graphs lets you visualize your prices with a fixed or percentage adjustment. This way, you can simulate different scenarios and see where your nightly rate, plus any markup, lands in the market.

The Competitor Calendar will give you a clearer picture of your competitive standing and allows for a straightforward comparison.

Conclusion

Understanding and managing Airbnb expenses is critical to running a successful short-term rental. From initial furnishing costs to ongoing fees and revenue optimization, keeping track of expenses ensures profitability. Using tools like an Airbnb startup cost spreadsheet and dynamic pricing platforms like PriceLabs can help hosts stay ahead in the competitive short-term rental market.