Here's How Much Airbnb Hosts Really Make, Per Study

With inflation squeezing consumers everywhere, perhaps you've considered supplementing your income by renting out that extra bedroom in your home as a vacation rental? Or taking things up a notch by purchasing a property to convert to a short-term rental, marketed on Airbnb. Yet, before cannonballing into the vacation rental pool, wouldn't it be helpful to know how much Airbnb hosts actually make each year? It turns out that amount varies tremendously by where you're located.

The accounting software company Tipalti recently released data gathered for the approximately 3 million Airbnb hosts around the world. Of those roughly 3 million hosts, about 2.2 million are based in the United States as of the year 2020. Nationwide, those U.S. Airbnb hosts earned an average of $44,235 in 2021. However, the highest-earning hosts earn significantly more than that. For example, Airbnb operators in Hawaii earned $73,247 during the year 2021. That's not surprising considering that Hawaii's tropical scenery makes it a top vacation destination for many travelers, coupled with higher prices because of its remote location. In fact, Hawaii is the most expensive state to live in.

On the other hand, the second-most lucrative Airbnb state comes as a bit of a surprise: Tennessee. We're guessing that tourists flock to the natural beauty of the Great Smoky Mountains, Nashville's country music scene, and attractions like Graceland and Dollywood. Whatever the reason may be, Tennessee Airbnb hosts rake in $67,510 annually. Finally, sunny Arizona with its Grand Canyon and other year-round outdoor activities comes in third place with $60,448 average annual earnings in 2021.

Of course, some states are enormous, so to get a better idea of what your expected earnings from becoming an Airbnb host might be, it'd be wise to look at individual cities as well. The top-earning city in the U.S. for Airbnb hosts is San Diego, with average annual revenue of $77,990. The next highest-earning city is Austin, Texas, with a 2021 average annual earnings of $74,241.

Finally, the $70,539 in average annual earnings for Airbnb hosts in Kissimmee, Florida, is good enough to rank Kissimmee third among all U.S. cities. For those unfamiliar with Florida, Kissimmee is located in the central part of the state and in close proximity to Orlando and its various theme parks, including Disney World, LEGOLAND, and Universal Studios.

Interestingly, some popular U.S. tourist destination cities you might expect to return high Airbnb earnings are actually quite further down the list of top producers. For instance, Las Vegas; it has an average annual earnings of just $35,405, while San Francisco is even lower at $30,732 per year.

After reviewing the average annual earnings for Airbnb hosts in some popular cities and states, you might be tempted to become the next U.S. vacation rental mogul yourself. After all, earning upward of $3,000 or $4,000 per month in passive income sounds pretty great, right? Well, that's not exactly accurate, as the income averages from Tipalti represent the gross revenue to Airbnb hosts, not their net income.

That means that the income listed doesn't take into account any operating expenses or taxes. For instance, an Airbnb may have a mortgage that requires payment every month. This said, even if an Airbnb property is owned outright, there are almost surely property taxes to be paid, along with utilities like electricity, water, and internet.

To be clear, operating an Airbnb or similar short-term rental, like with Vrbo, (check out whether Airbnb or Vrbo is a better deal) can definitely be a lucrative side-hustle or even a full-time career to dedicated hosts. That's especially true if you or your property reside in one of the prime locations according to Tipalti's data. However, you'll still want to do a full examination of operating expenses in addition to just looking at the gross revenue to determine whether or not becoming a vacation-rental proprietor is worthwhile for you.