There's never been a better time to get in the Airbnb game.

According to the latest data, the typical U.S. Airbnb host saw their income jump 85% last year over 2019, clocking in at an average of $13,800 per person. And new hosts? They saw earnings 34% higher than those who started hosting in 2019. In total, new hosts earned over $1.8 billion in income across the year. 

Are you thinking about investing in a short-term rental or opening your property up as an Airbnb? Here are four ways you can capitalize.

Person pulling suitcase on a wooden deck.

Image source: Getty Images.

1. Choose the right locale

California is the top spot for Airbnb hosts. New hosts in the Golden State raked in the most earnings in 2021, notching nearly $270 million in income across the year. Other high-earning spots for new hosts include:

  • Florida
  • Texas
  • New York
  • Georgia
  • North Carolina
  • Tennessee
  • Arizona
  • Colorado
  • Pennsylvania 

If you want specific markets, short-term data analytics firm AirDNA says Maui is your best bet, followed by Kenai Peninsula, Alaska; Chattanooga, Tennessee; Gulfport/Biloxi, Mississippi; and Slidell, Louisiana. In Maui, the average revenue for a short-term rental is a whopping $102,000 per year.

2. Open your property up to holiday travelers

It's tempting to use your vacation home for yourself during the holidays. After all, who wouldn't want to spend Christmas by the beach or spring break in sunny Florida? 

As alluring as it is, though, that move could cost you. Airbnb's data shows holiday weekends are serious moneymakers for hosts. On Labor Day weekend in 2021, for example, U.S. Airbnb hosts brought in $140 million in earnings. Memorial Day weekend was close behind, at more than $126 million, followed by the Fourth of July, which saw $120 million in host income.

3. Invest in good photos -- and lots of them

Data from AirDNA shows that more photos equal higher occupancy levels. Your listing should have a bare minimum of six to 10 photos (this results in a 48% occupancy rate), but the ideal number is 26 or more, which leads to a 59% occupancy rate overall.

Make sure you highlight all the sleeping areas, dining and living spaces, and any amenities or features that make your listing unique. If it's located in a community, photos of the amenities it offers -- like the pool, workout room, or business center -- can help too.

4. Set your cleaning fee carefully 

Exorbitant cleaning fees are one of the biggest complaints from Airbnb guests. But they're also a double-edged sword. Lower yours too much, and you get subpar service, poor reviews, and fewer profits. Charge a hefty one, and you ensure a pristine property but turn off potential guests with your sky-high costs.

It takes striking a careful balance -- one that considers average cleaning fees for your area (you don't want to go too far below or above that), the size of your property, and your reviews/ratings. According to AirDNA, the median cleaning fee for cleaning is between $55 to $250 ($55 for a studio/one-bedroom and $250 for a five-bedroom house or larger).

Scale and adapt

These are only the foundations of a profitable Airbnb. To keep increasing your income as a host, you'll need to be flexible and ready to adapt. Monitor your reviews and ratings, and make changes based on the feedback you receive. You should also keep a close watch on your competition and update your pricing and fees regularly to capitalize on high-traffic days and events. You can use Airbnb's Smart Pricing tool as well.