Since it launched in 2008, Airbnb has grown to list more than 6 million rentals around the world by offering home-owners the opportunity to make some extra cash by renting out an extra room, or even their whole home (in areas where that's legal, at least). But just how much can you actually make renting your own home on the platform?
For Aaron MacDaniel, a 40-year-old former IT consultant, the answer is easily in the six-figure range. MacDaniel and his wife, who live in the Hawaiian resort neighborhood of Waikiki, started listing the spare bedroom of their two-bedroom condo on Airbnb in 2013. After a little more than four years of renting out that condo, and a second one they bought to further increase their income, the MacDaniels made a total of about $360,000 from AirBnB rentals, Aaron tells CNBC Make It.
"I think we were definitely surprised at how much we could make [on Airbnb], and also how much we enjoyed it," MacDaniel tells CNBC Make It. "It happened gradually, then all at once."
The couple initially just figured they could use the extra cash to help pay down their mortgage, and they started out making about $1,500 a month from hosting Airbnb guests. At the time, MacDaniel was a contract worker with Kaiser Permanente in Honolulu making six figures a year. But when his contract with that company ended in 2014, MacDaniel decided to use some of the money they'd made on Airbnb to buy a second condo in their building, so they could live in one and rent the other out full-time.
Under that arrangement, the MacDaniels racked up nearly $39,000 in Airbnb income in 2014 and then more than $63,500 the following year. As they grew more comfortable operating as hosts, the couple decided they could make even more money by placing both of their condos up for rent on Airbnb full-time. They rented a one-bedroom apartment on the same street as their condo building — "two buildings away, so it was easy for us to manage," he says — and they lived in that apartment while renting out the two condos full-time.
The result? The MacDaniels pulled in over $124,000 renting the two condos in 2016 and then brought in almost $138,000 in 2017, MacDaniel says.
"Honestly, I had no idea it would blossom into a full-time business," MacDaniel says. "We started in 2013 and we didn't really need the extra money at the time. I just loved the idea that we could utilize some unused space in our condo and get to meet people from all over the world. It was definitely more of an experiment than a conscious business decision."
While MacDaniel was able to turn his properties into his own successful Airbnb business through 2017, he says he pivoted away from that operation after the condo building elected a new board president in 2018 who wanted to ban such rentals there. (Laws covering short-term rentals like those on Airbnb vary from state to state. Hawaii recently passed new regulations covering short-term rentals, which includes anything under 30 days, but they remain legal in so-called "resort areas" like Waikiki, where the MacDaniels' condos are located.)
Rather than fight his condo board, MacDaniel decided to move on from hosting in order to help other people manage their own rental businesses. Using his background in IT services and the knowledge he picked up while making money from Airbnb, in 2017 MacDaniel launched an online company that allows vacation property owners to outsource the management of their rentals. Called YourFrontDesk.co, the company serves clients who rent their properties on sites like Airbnb, VRBO and Homeaway, with MacDaniel's company providing services like handling booking requests and customer service inquiries as well as arranging for cleaning services or maintenance.
While MacDaniel declined to reveal any revenue figures for his new business, he says the company has already managed hundreds of rental units in the U.S. as well as overseas in countries like the U.K., Australia, New Zealand and South Africa.
MacDaniel also wrote an ebook, titled "The Airbnb Profit Blueprint," aimed at Airbnb hosts looking to increase their income as hosts on the rental platform. After all, during the four years he operated on Airbnb, MacDaniel says he learned a lot about how to increase his income with short-term rentals.
When it comes to tips and tricks that Airbnb hosts can use to improve their customers' experiences and maximize income, MacDaniel says it's important to always "put yourself in the guest's shoes" by asking yourself what you would want out of a rental property.
"It goes without saying, you have to nail the basics," he tells CNBC Make It. "Nothing else matters if the unit is not super clean, has good wifi, etc. But after that, the little things like making sure you have a bunch of snorkel gear, a surfboard [and sometimes] we let our guests take out a pair of bikes for free so they can ride around Waikiki without a car. It makes a big difference, both to your ratings and the overall guest satisfaction."
MacDaniel also recommends going the extra mile by adding touches like a free bottle of wine or a local delicacy (he put out local Hawaiian cookies and candies).
Mostly, MacDaniel recommends that anyone looking to make extra money by renting out a room, or their entire home, should remember to be honest with their guests. "Don't over-promise and under-deliver," he says.
"Let them know if you will be around or not — or if you have any pets, especially. And just be yourself. People will give you a lot of leeway if you are authentic and really trying to make sure they have a good stay, even if everything isn't perfect."
Check out the series premiere of CNBC's "Cash Pad" on Tuesday, July 23 at 10 p.m. ET.
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