What is an Airbnb business?

An Airbnb business involves listing properties on short-term rental platforms to generate income from nightly guest stays. The model ranges from managing a single spare room to operating a portfolio of dozens of properties across multiple cities.

Hosts earn revenue from guests booking short-term stays. The platform takes a service fee, and the host receives the remainder after any management costs. The appeal is flexibility: hosts can operate full-time or part-time, across owned or leased properties, with varying levels of hands-on involvement.

Why short-term rentals outperform traditional lets

Short-term rentals typically generate higher gross revenue than equivalent long-term lets, though they require more active management. Across Houst's managed portfolio, the average daily rate is £91 at 69% occupancy. For well-located two-bedroom properties in cities like London, Dublin and Sydney, annual net revenue regularly exceeds what the same property would earn on a 12-month assured shorthold tenancy.

The trade-off is operational complexity: guest communication, cleaning turnover, dynamic pricing, regulatory compliance and maintenance all require consistent attention. This is why many operators partner with management companies or join structured programmes that handle operations at scale.

Three ways to run an Airbnb business

There are three main models, each with different capital requirements and risk profiles:

• Own and let. Buy a property and list it for short-term rental. This builds equity and gives full control, but requires significant capital upfront.
• Rental arbitrage. Lease a property long-term with the landlord's written permission and sublet it on Airbnb. Lower capital requirement, but dependent on lease terms and local regulations.
• Co-hosting or partnership. Manage properties for other owners in exchange for a share of revenue, or join a structured operator programme like the Houst partnership programme. Minimal capital outlay, with income tied to portfolio growth.

Each model is covered in detail below. Before diving in, our income calculator shows how many properties you need at each stage of starting an Airbnb business — based on real Houst data across 25 cities.

Different ways to start an Airbnb business

Starting without owning property

You do not need to own property to build a short-term rental business. Rental arbitrage and co-hosting allow operators to generate income from properties they do not own, with significantly lower upfront costs than purchasing.

Rental arbitrage

Rental arbitrage involves leasing a property on a long-term basis and subletting it for short-term stays on Airbnb. The profit comes from the gap between the monthly lease cost and the nightly rental income.

For example, leasing a Dublin apartment for EUR 1,500 per month and generating EUR 3,000 per month through short-term lets creates a substantial margin. In London, a similar model works for properties in zones 1 and 2 where nightly demand is strong year-round.

To succeed with rental arbitrage:

• Secure written landlord approval before subletting.
• Research local regulations. London imposes a 90-night annual cap on short-term lets for primary residences. Dublin has similar restrictions.
• Budget for rent payments during low-occupancy periods to avoid cash flow gaps.

Co-hosting and operator partnerships

Co-hosting involves managing properties for existing owners and earning a share of the rental income. This model requires almost no capital investment and is suited to operators who want to scale quickly without taking on property risk.

The Houst partnership programme formalises this model. Partners operate under the Houst brand with access to dynamic pricing, guest communication systems, cleaning logistics and a proven operational framework. For full details on how the programme works and what it costs, see the Houst partner programme guide.

Investment varies by market:

• UK and Ireland: Partners invest £10,000 to launch.
• Australia and South Africa: A recoup model with no upfront fee.

Investing in property for Airbnb

Owning property as an Airbnb host builds equity while generating rental income. Unlike arbitrage or co-hosting, ownership gives full control over the property, its presentation and its pricing strategy.

Key considerations when buying for short-term rental:

1. Location. The single biggest driver of Airbnb revenue is location. Properties in central London, Dublin, Sydney and Cape Town consistently outperform properties in outer suburbs. Use tools like AirDNA or Mashvisor to compare average daily rates, occupancy rates and annual revenue before committing.
2. Financing. Most hosts secure a standard buy-to-let mortgage. Some lenders offer specific short-term rental products with slightly different terms. Factor in deposit, stamp duty (where applicable) and furnishing costs alongside the mortgage.
3. Property preparation. Invest in quality furnishings and professional photography. Properties with strong photography and a consistent design aesthetic achieve higher nightly rates. Add essentials like high-speed WiFi, smart locks and a fully stocked kitchen.
4. Management approach. Decide whether to self-manage or partner with a management company. Self-management keeps more of the revenue but requires significant time. For a full breakdown of costs, see the Airbnb management fees guide.

How much does it cost to start?

Startup costs depend heavily on which model you choose:

• Rental arbitrage: First month's rent plus deposit, furnishing costs and professional photography. Typically £3,000 to £8,000 depending on property size and location.
• Partnership or co-hosting: Through the Houst partnership programme, UK and Ireland partners invest £10,000. Australia and South Africa partners use a recoup model with no upfront fee.
• Property purchase: Deposit, stamp duty, furnishing, insurance and licensing. For a two-bedroom in a major city, expect a deposit of £20,000 to £60,000 plus £5,000 to £15,000 in setup costs.

Ongoing costs include cleaning between guests, insurance, consumables (toiletries, linens, kitchen supplies), dynamic pricing software and any management fees. For a detailed look at management costs specifically, see the guide to whether Airbnb management is worth it. Before committing, use our rent-to-rent vs Houst partnership calculator to compare both income models side by side.

Step-by-step guide to launching your Airbnb business

Step 1: Research the market

Before investing in a property or committing to a lease, research the local short-term rental market. Identify areas with strong occupancy, competitive nightly rates and favourable regulations.

Tools like AirDNA and Mashvisor provide rental income estimates, occupancy rates and competitive benchmarks for specific neighbourhoods. Look for markets where demand is consistent year-round rather than heavily seasonal, and where regulations allow the model you plan to use.

Houst operates across 27 cities spanning the UK, Ireland, France, Australia, New Zealand, South Africa and the UAE. For city-specific data, the Houst investment calculator provides estimated revenue, occupancy and net income based on your property's location.

Step 2: Choose your model

Select the approach that matches your capital, risk tolerance and long-term goals:

• Own and let if you have capital and want long-term asset appreciation alongside rental income.
• Rental arbitrage if you want lower upfront costs and are comfortable managing lease relationships and local compliance.
• Partnership or co-hosting if you want to scale quickly with operational support and an established brand behind you.

Step 3: Set up your property or partnership

If you own or lease a property:

• Furnish to a high standard. Quality furniture, consistent styling and essential amenities (WiFi, smart locks, fully stocked kitchen) drive higher ratings and repeat bookings.
• Invest in professional photography. Listings with strong photography consistently achieve higher click-through rates and booking conversion.
• Set up dynamic pricing. Tools like Beyond Pricing, PriceLabs and Wheelhouse adjust your nightly rate based on demand, seasonality and local events.

If you are joining a partnership programme:

• Complete the onboarding process with your partner. Through the Houst partnership programme, this includes market assessment, operational setup and access to Houst's pricing and guest management systems.
• Begin sourcing properties in your target area. Focus on properties that meet the criteria for strong short-term rental performance: central location, good transport links, two bedrooms or larger.

Step 4: Optimise for profitability

Once live, focus on the levers that drive revenue:

• Dynamic pricing. Adjust rates to match demand patterns. Properties using dynamic pricing tools typically outperform those with static rates, particularly during peak periods and local events.
• Guest experience. Responsive communication, professional cleaning and small touches (welcome packs, local recommendations) drive positive reviews. Higher ratings lead to higher search visibility on Airbnb, which leads to more bookings. For tips on getting this right, see the guide to Airbnb guest reviews.
• Occupancy management. The difference between 65% and 80% occupancy at £100 per night is over £5,000 per year in additional revenue. Flexible cancellation policies and minimum-stay adjustments help fill gaps. For benchmarks across markets, see the guide to Airbnb occupancy rates by city.

Common challenges and how to overcome them

Navigating regulations

Short-term rental regulations vary significantly by city. Understanding the rules in your target market is essential before listing:

• London: Properties can be let for up to 90 nights per year without planning permission. Exceeding this requires specific authorisation from the local council. See the full guide to Airbnb rules in London.
• Dublin: Primary residences can be let for up to 90 days per year without planning permission. Secondary properties require separate approval. See the Dublin regulation guide.
• Sydney: Rules vary by local government area. Some councils impose caps on the number of nights per year, and hosts must register with the NSW Short-Term Rental Accommodation register.
• Cape Town: Short-term rentals require registration with the City of Cape Town. Zoning rules determine whether a property can be used for short-term letting. See the Cape Town regulation guide.
• Melbourne: Victoria currently has no statewide registration scheme, but local council rules apply. See the Melbourne regulation guide.

Consulting a local property solicitor before listing is strongly recommended, particularly for rental arbitrage where the lease terms must explicitly permit subletting.

Standing out in competitive markets

In popular short-term rental cities, competition for guests is high. The properties that consistently outperform share common traits:

• Professional photography. High-quality, well-lit images that showcase the property's best features.
• Strong reviews. Properties rated above 4.8 on Airbnb consistently achieve higher ADR and occupancy than those rated between 4.5 and 4.7.
• Clear positioning. Highlight what makes the property distinctive: location, views, amenities, design. A listing that reads like every other listing performs like every other listing.

Managing costs

The key to profitability is managing costs without compromising guest experience:

• Furnish durably. Prioritise quality over quantity. Furniture that lasts three years costs less per guest night than cheaper alternatives that need replacing annually.
• Automate where possible. Guest messaging, pricing adjustments and cleaning scheduling can all be automated through property management tools, reducing the time cost per booking.
• Track your unit economics. Know your cost per booking (cleaning, consumables, platform fees, management fees) and set your minimum nightly rate accordingly.

Scaling an Airbnb business with the Houst partnership programme

David Cashman and Mathew O'Connell launched their Airbnb management business in Dublin in April 2024 with five properties. They partnered with Houst to access operational infrastructure and scale quickly.

The challenge

In the early stages, David and Mathew faced three core hurdles:

• Improving commercial performance across their initial properties.
• Setting up reliable cleaning and maintenance operations.
• Competing in a fast-moving short-term rental market with established operators.

How the Houst partnership helped

Partnering with Houst gave them access to:

• Professional cleaning and maintenance logistics.
• Dynamic pricing optimisation to maximise average daily rates.
• Automated guest communication and check-in processes.
• Professional property photography and multi-platform listing optimisation.

By using Houst's operational systems, they focused on portfolio growth rather than day-to-day management.

The results

Within eight months, David and Mathew expanded from 5 properties to 60, generating exponential revenue growth while maintaining service standards.

In their words:

"What Houst really stood out on was the mindset of change that they had. You want to be partnered up with people who are on the frontier of the domain and of the industry."

"Initially, we were getting two or three bookings a day; now we are up to two or three an hour. The ability to handle that demand has been phenomenal."

Conclusion

Starting an Airbnb business is a practical route to building income from property, whether you own, lease or manage for others. The key decisions are choosing the right model for your capital and goals, selecting a strong market, and setting up operations that deliver a consistently good guest experience.

For operators who want to scale with operational support and an established brand, the Houst partnership programme provides the infrastructure to grow a portfolio across the UK, Ireland, Australia, South Africa and beyond. See how the programme works.