If you have ever planned a group trip, you know the hassle of ensuring everyone in the group chat is on board. If the trip idea leaves the group chat, then flights and lodging must be confirmed.
Regardless of airline preferences, housing options typically boil down to traditional hotels or short-term housing rentals. And when it comes to big groups, renting a house has become the go-to for most vacations.
One of the most popular short-term housing rental organizations is Airbnb. Outside of providing an alternative to hotel stays, the company has also become a source of investment and revenue for entrepreneurs.
Twenty-year-old Inayah McMillan has fully tapped in, raking in over six figures in revenue in 2022 as an Airbnb host.
“I think there’s a major misconception that you must have the capacity to buy property in order to become an Airbnb host,” McMillan stated. “While you should definitely have solid savings (I recommend at least $8,000 to $15,000) or a good credit score, you don’t have to own any properties.”
McMillan uses rental arbitrage to rent the properties she uses to host. While this process has worked for her listings in St. Louis, MO, she noted to Insider that it is not legal in every state.
If hosting like McMillan is of interest, she’s broken down what it takes to see the possible results she’s found.
First, there are start-up costs. Depending on where a person chooses to host, cost can vary on several factors. However, McMillan sets aside anywhere between $8,000 to $15,000 per host site. That money covers the first and last month’s rent, supplies, furniture, and security deposits.
Once the location is set up, McMillan noted the expenses that she usually incurs are around $1,500 depending on the size of the unit, as she covers utilities, monthly rent, and her business’ automation tools. This allows her to earn up to $3,000 per month with an estimated net profit of $1,500.
Locking down the business logistics was crucial for McMillan when she started, but she understood the need to level up her business tactics as she grew. One of those moves was forming an official LLC for her business.
“Once you have an LLC, you can utilize corporate leases,” McMillan explained to the outlet. “They’re essentially the same as personal leases, but renting under our company name allowed us to sign four properties at once — which landlords usually wouldn’t allow you to do otherwise.”
She continued, “Having an LLC also provides tax benefits (we can write off business expenses like rent, utilities, transportation, supplies, etc.), and it makes a big difference when it comes to rental arbitrage — it allows you to pitch yourself to landlords as a company rather than an individual, which looks much more professional.”
Beyond these tips, McMillan also encouraged potential Airbnb hosts to tap into automation tools that help secure their properties and provide efficiency to the rental and maintenance process.
Additionally, she was honest that the ever-changing housing market and economy have not negatively impacted her business.
“While there’s a lot of uncertainty in the market right now, I haven’t felt any out-of-the-ordinary dip in business. November through February is usually our slower season, so our revenue has decreased a bit, but for the most part, we’ve stayed pretty consistently booked,” McMillan said.