Side hustle

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Australians looking to save a bit of money post-COVID-19 pandemic are being advised of the top-paying side hustles.

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New research released by Canva showed that 3D and 2D modeling is the most lucrative service advertised by part-time freelancers in Australia. According to their research, freelancers in this space charge a max of $650 per job.

Based on the average price of a job that can be completed in three days or fewer as of March 2021, 3D and 2D modelers can earn an average $125.

Coming in second place on the maximum earning scale are SEO services, paying a max $350 per job, followed by proofreading and editing, which pays a maximum of $200.

The research also showed that Australia ranks third among its OECD peers when it comes to fees per job, paying on average $766.

Switzerland is the best country to set up a side hustle, with average earnings at $875.

Canva also showed that Australians, like the rest of the world, are more likely to increase freelance work in a post-COVID-19 world.

“According to the International Labour Organization, the equivalent of 255 million full-time jobs were lost globally in 2020,” Canva cited in its research.

“This may partly explain why freelance job completions increased by 6.5 per cent from before the pandemic-enforced lockdowns to during. We estimated this by comparing the number of completed jobs before and after March 2020 – the start of most global lockdowns.”

Three tips to making your business stand out:

1. Build your brand

Regardless of how many hours a week you want to spend doing your side hustle, Canva states that it is important to build a memorable and positive brand that sets you apart from the competition.

“Before you start, take the time to think about how you want to represent your services to the world. It’s particularly key to know your target market and research the best ways on how to appeal to them with your brand,” a Canva spokesperson said.

They also highlight the importance of building an independent brand even if the freelancer uses third-party sites for gigs, urging freelancers to set up their own website.

2. Plan your marketing strategy

Even if your side hustle mostly takes place offline, Canva suggests the business needs an online presence. It’s paramount that your business is represented in the right way and on the right social media platforms.

“Your ultimate goal is to become known as the foremost authority in your area of business,” Canva said.

“You’ll want customers to associate your brand with high-quality service and content and want to share what you create. Producing insightful and shareable blog posts and newsletters to promote on your website and social media channels will reinforce your business’s authority in the industry.”

3. Get customers raving

Finally, freelancers are urged to create a strong, positive customer experience that compels users to leave fantastic reviews and ratings – prompting new users to trust you as well.

“You might want to build customer relationships further with reward schemes for loyal customers and service guarantees for those who need extra peace of mind when ordering from you for the first time. Ultimately, whether you spend a few hours a week or most of your time on your new side hustle business, your customers will be the ones who can make or break it,” Canva concluded.

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Australians looking to save a bit of money post-COVID-19 pandemic are being advised of the top-paying side hustles.

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The appeal of the gig economy comes from its promise of flexibility, freedom and financial stability. But what are the downsides to working as a freelance worker?

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Gone are the days when the only source of income came from being a full-time employee. The gig economy has opened up a world of opportunity for those who want to use their skills to earn extra cash outside of their full-time job or want to be in full control of their work hours while being financially stable. 

The term “gig economy” refers to a free market system in which traditional firms hire independent contractors, freelancer workers and part-time employees to perform individual tasks, assignments or jobs called “gigs”. Gig work through the gig economy consists of income-earning activities outside of traditional, long-term employer-employee relationships. Hired and assigned via digital platforms and smartphone applications, gig employees tend to work remotely.

In 2021, millions of Aussies are part of the gig economy chain – whether as customers, gig economy workers, investors or anything in between. Airtasker, Freelancer, Uber, Doordash and Deliveroo are some of the more widely recognised platforms in the country.

The gig economy continues to grow rapidly in Australia and around the world. In fact, according to a recent study, the gig economy grew nine-fold between 2015-2019 to $6.3 billion, a gain of 32 per cent.  

Now, if you’re wondering whether the gig economy is right for you, here are some of the main pros and cons.

What are the pros of the gig economy?

Working in the gig economy offers many opportunities to earn extra cash or a full-time living. It can take you closer to achieving your financial goals, such as getting your retirement plan on track, building an emergency fund or saving up for your first home. Here are some advantages of working in the gig economy. 

Flexibility

Many workers in the gig economy find that their status provides them with great flexibility compared with traditional employment. Employees have the option to work during the time they want, where they want. Gig workers are able to work at hours that suit them and their needs and on days that work for them. Some may find that early morning hours during weekends are the ideal time to get their work done, and that may not be an option with a traditional job. 

Greater independence

Gig economy workers are generally given independence to complete their work. Typically, a task will be given to a worker with an end date, and how they finish that task is up to them. They often receive jobs to work remotely or at home. Because they are not in an office space and with no one to look over their shoulders, gig economy workers may find it easier to handle the work. It can also boost their confidence and give workers the ability to complete a job the way they believe it will be best done – on their timeline and in their way.

Job variety 

Instead of being stuck with the same monotonous task every day in an office, the gig economy provides freelancers with the ability to work on a variety of jobs in various fields. Each project or gig that they undertake may be filled with different elements that make their work interesting. For example, a photographer working in the gig economy may find themselves travelling for a variety of events rather than being stuck in a photography studio all day. This can motivate workers and allow them to bring more creativity to the table so that they provide the best results. 

Higher income potential 

Pay for freelance workers varies. Some businesses pay gig workers at a lower rate, while some pay their workers at a higher rate. Some companies offer a higher salary since gig workers don’t usually have to pay benefits in addition to the salary. The expertise and skill of the freelancer are also taken into account. 

Most of the time, gig workers can charge hourly rates for the work they do. This allows them to have control over their work hours and get paid for extra hours that may be required of them. Administrative tasks such as meetings and phone calls in addition to the given work can be charged. This advantage makes it possible to obtain higher education while working in a gig economy job because both are flexible in terms of time. 

Additionally, having another degree or educational certificate in your resume can help boost your earning potential in the future, both as a freelancer or as a full-time employee.

Wondering what the best-paying gigs are? Here are some side jobs that pay well. 

What are the cons of the gig economy? 

While there are major upsides to gig economy jobs, anyone considering the gig economy should also weigh up the potential downsides.

Lack of  benefits 

Unfortunately, most companies do not offer benefits to their freelance workers or independent contractors. Because you are not considered a full-time employee of the company, regulations regarding benefits the company is required to provide you are different. 

Research released by the Actuaries Institute showed that despite the growing popularity of the gig economy in Australia, workers in this space could face long-term financial disadvantages due to their lack of access to employer-funded superannuation and other basic entitlements. It noted that workers in the gig economy are missing out on receiving entitlements such as minimum wage, employer-paid superannuation, sick leave, annual paid leave, paid parental leave, long service leave and worker’s compensation insurance.

The lack of policies safeguarding workers in the gig economy has also led to the cases of exploitation of gig workers. Recently, Uber hit the headlines when it was revealed that its independent contractors are still earning below a minimum wage, even during peak times. 

To secure your financial security as a freelance worker, it’s best to be informed of your insurance and benefits options. 

Tax obligations

Like all self-employed people, gig workers have to track and pay their own taxes. Before you start freelancing, plan on how you will pay your taxes. If you’re unsure of how to handle the hullabaloo of the tax season, it’s a good idea to consult a financial adviser. 

Gig economy workers are also responsible for keeping track of personal expenses associated with working, such as the cost of vehicles and equipment. While some of these expenses can be written off for taxes, it’s important to be careful with what you deduct. Oftentimes, freelancers work with an accountant so they can evaluate the things they use for their work and know which ones can be written off for their taxes. 

To learn more, here’s our guide on filing your tax and deductions as a freelancer.

Inconsistent income

While there are plenty of businesses and online platforms that can provide gig workers with a steady stream of income, be prepared for sporadic periods without work. One major downside of the gig economy is that employment is rarely guaranteed, which isn’t a lifestyle suited to everyone.

Any source of contract work can dry up suddenly, in some cases due to negative reviews of an independent contractor’s performance. Workers in platforms that have reviews available to the public, such as Uber and Airbnb, are particularly vulnerable to this risk. 

There’s also the ever-present possibility of an app going out of business in response to litigation or funding issues, or a sudden decline in users caused by new competitors in the market or other financial and economic factors.

Additional stress and work hours 

Although gig workers have the flexibility to set their own hours, it can be difficult to get a gig if there are  specific circumstances that a potential employer requires. To have a greater chance of getting contracts, freelancers need to offer higher levels of availability and quick turnarounds on a project. When your rates are high and your turns take a long time, then it will be hard to fill up your schedule. This is why the most successful workers in the gig economy are reportedly working more than 60 hours per week, seven days each week, to maintain their profit margins. 

As a freelancer, your income is never really 100 per cent secure, which can cause significant stress. If you choose to earn money through the gig economy, then you will always be on the lookout for the next job. This is one advantage of full-time workers over gig economy workers. Full-time employees are relatively secure in their employment position compared with freelancers. You must also be ready for sudden changes in your current tasks. There are a lot of unexpected situations that you may face, including being laid off in the middle of a contract.  

Conclusion

Earning money through the gig economy may sound like a dream; gig workers enjoy great scheduling flexibility and extra income and the freedom to work on something that they are passionate about. Working more flexibly on a job-by-job basis is even lauded by some as the ultimate in employment, and provides a lot of freedom for those that desire it. 

However, the gig economy’s rapid growth has not left much room for people to consider the disadvantages of such setup. Gig workers suffer from relatively low pay, lack of benefits, and increased stress. They also do not have the job security and peace of mind that nine-to-fivers enjoy.  

One thing is for sure: the gig economy is here to stay. So, if you’re planning to be part of it, make sure to know what you’re signing up for and consider your options carefully. 

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The appeal of the gig economy comes from its promise of flexibility, freedom and financial stability. But what are the downsides to working as a freelance worker?

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Whether you’re a traveller or not, it’s most likely you’ve heard of Airbnb. The digital marketplace, which connects people who want to rent out their extra space or accomodation to guests, has grown in popularity worldwide. 

" ["fulltext"]=> string(6998) "

A lot of people have grabbed the opportunity to be part of the homesharing business market as an Airbnb host. Airbnb boasts of having millions of listings in over 220 countries in more than 100,000 cities. 

If you’re thinking of opening your space to guests as a host, below are some considerations to keep in mind before creating an Airbnb listing.

Goals v expectations 

Most people become Airbnb hosts to earn money. But hosting is more than just collecting cash from Airbnb guests. You must establish clear goals and expectations before venturing into this business.  

Define your financial goals. How profitable do you think your listing will be? What is the range of income you are expecting from being a host? Are you planning to be a full-time, part-time or seasonal kind of host? How many times do you want your listing to be booked per month? 

Aside from your goals, you must also manage your expectations. For example, running a successful Airbnb will take up your time. Are you ready to invest the necessary time needed to make sure your booking will proceed as planned? Are you prepared from any interruptions being a host can bring to your life?

Setting your goals and your expectations can help you have a clear vision of what you want to achieve in this business venture and how you can attain it. 

Personal safety

Personal safety is one of the main factors to consider before becoming a host. 

When you are hosting on Airbnb, you are essentially inviting unfamiliar people into your home or property. If this aspect of being a host makes you uncomfortable, then this business venture may not be the right fit for you. 

Airbnb has measures in place to vet potential guests and to ensure your safety. Airbnb requires guests to provide personal information such as their full name and email address before they can make a reservation request. Hosts can also ask for additional requirements such as IDs and other proof that will make them qualified guests. This may help minimize any risk to your personal safety.

Legal and regulatory issues

Before  becoming an Airbnb host, you should have a good understanding of the local laws in your city or country regarding homesharing. 

Learn the regulations for Airbnb hosting in your property’s location. Several cities have laws that limit a host’s capacity to rent out their space to guests for short periods. Most often, these restrictions are part of a city’s zoning or administrative codes. In some regions, hosts may be required to register, acquire a permit or get a licence before they can create an Airbnb listing or accept guests. Some cities completely ban short-term Airbnb rentals. 

It is also important to know how occupancy tax is collected within your property’s tax jurisdiction. In some areas, Airbnb is in charge of the calculation, collection and remittal of the local occupancy tax on behalf of hosts.  

You need to be knowledgeable about national and local laws so you will not receive fines or penalties.

If you are renting your property, you must check the lease for restrictions on subletting. Inform your landlord of your plans to rent your unused room or unit before creating a listing.  

Optimal listing price

Finding the optimal pricing for your Airbnb rental is essential if you want to maximise your profit and you want to continue earning on the platform for a long time.

Setting the price of your property is not a one-time thing. Airbnb provides hosts with a Smart Pricing Tool that automatically updates the nightly prices of your listing based on several factors. This includes the listing type, the location of your property, the season and the demand, among other things. 

However, the pricing recommendation given by Airbnb’s pricing tool tends to be lower than the best prices which can be achieved in the market. This is because Airbnb’s pricing tool aims to boost your number of bookings and not the profits you will earn.

As a host, you must be prepared to constantly monitor competitive rates and special events to keep your pricing optimised. You must also learn how to customise your rates to include additional costs such cleaning fees and maintenance expenses. 

Neighbor relations 

If the room you are planning to rent out is part of a community with a shared space, you should have plans on how to manage your relations with your neighbors. 

Even if you have a separate house, you should still be considerate about the disruptions your guests might cause to your neighbors.

Noise complaints are the most common negative feedback of neighbors of booked Airbnb spaces. To avoid hurting your relations with your community or neighbors, set house rules that can manage noise issues with guests. Some hosts do not allow parties or gatherings in their spaces and some specify a certain time when guests should start minimising noises. 

Risk and liability 

Becoming a host comes with several risks. By opening your home for short-term rent, you are putting yourself and your place at risk of theft. One worst case scenario is when a guest becomes a squatter and refuses to leave. There is also the possibility of property damage by irresponsible guests. 

You will also be exposed to potential liability risk if your guests claim they were hurt or if they damage other property or injure neighbors during their stay.

On the bright side, Airbnb has incentives and programs in place to ensure that hosts will be protected. The company offers an Airbnb Host Guarantee that gives the host protection for up to $1,000,000, which will cover any property damages that are bigger than the security deposit paid by guests. 

Meanwhile, the Host Protection Insurance gives coverage for hosts against third-party claims of bodily harm or property damage during a stay. But this insurance may not cover everything, so you may need to get additional insurance for your accommodation.  

Conclusion 

There are risks that come with becoming a host. You will need to be continually learning and  adapting your Airbnb listing to the new market trends, shift in business conditions or even changes in local laws. 

If you think the challenges and risks outweigh the benefits of becoming a host, it might be practical to look into other side hustles. But if you are willing to put in the effort and dedication needed to become an Airbnb host, this venture has a high chance of paying off. 

Is hosting on Airbnb the right side hustle for you? For more up-to-date tips and guides on how to turn your hobby or interest into a money-making opportunity, explore nestegg today!

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• Yes

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Whether you’re a traveller or not, it’s most likely you’ve heard of Airbnb. The digital marketplace, which connects people who want to rent out their extra space or accomodation to guests, has grown in popularity worldwide. 

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Ridesharing services have grown in popularity, especially among career-orientated Aussies looking for a quick and easy side hustle. 

" ["fulltext"]=> string(7141) "

While working as a full-time driver may not be sustainable due to the fairly low average hourly rate, people looking to boost their earnings as independent contractors have a shot at success if they grasp the ins and outs of the trade. 

Here are some tips and tricks to help you increase your profitability while driving for Uber.  

Take advantage of surge pricing

In order to take full advantage of Uber’s surge pricing, it is important to understand how the ridesharing app system works. 

Uber has developed a “surge pricing” system that is based on the “equilibrium price” concept, in which consumer demand must match the supply. If the supply is high, prices should be lower, but if there is an increase in demand, prices should rise. 

Surge pricing happens when there is high demand or high number of passengers but low number of riders in an area at any given time. During these surge periods, drivers can earn more as fares will be higher. 

While the scheme promises higher rates, it can be disadvantageous for drivers’ earnings. Uber drivers are notified that the fares will be higher. Because of the lure of higher earnings, new drivers may enter the area with the surge price. With the increase of the number of drivers, Uber prices tend to drop as demand becomes equal with the availability of service.  

One workaround for this issue is to be aware of when and where the surge pricing occurs. Attempt to create a route that will allow you to be in areas where you know there will be a peak in demand to increase the chance of catching a surge in prices. It may be certain night-out spots or business district areas with certain time slots that are surge periods. 

Some drivers have also recommended driving up fares by logging out of the app ahead of the anticipated surge price. This will reduce the number of drivers and the app will determine it still needs to boost fares. After some time (but still within the anticipated surge period), you can log in and accept ride requests that still have surge prices.  

Lessen your driving

Rideshare drivers earn their money by driving passengers to their destinations.  
However, they do not earn anything when they are driving alone. Do not drive around in circles while waiting for the next ride request to avoid losing money by wasting gas. 
Experienced drivers recommend staying in a busy central area, preferably within the city limits. Meanwhile, the suburbs should be avoided due to the low volume of ride requests in these kinds of areas. This will ensure that you can fully utilise Uber’s Back to Back rides feature – which allows you to accept a new ride that is near the end of your current ride request.  
Be efficient with your driving time. Plan your driving route and schedule. List down locations in which you can park and wait for ride requests without losing fuel. 

Driving around in an area heavily congested to use the bathroom can also eat away at your time. Locating nearby restrooms in your driving route can lower your gas usage and boost your profit.  

Driving to a surge fare area that is far away from your current location may also hurt your profit.  

Invite drivers and riders  

If you have friends or acquaintances that are looking to earn extra money, you can invite them to be a rideshare driver. 

Each Uber partner driver receives their own driver invite code. You will receive a referral bonus each time your code is used while helping others earn extra cash. 

Aside from a driver invite code, Uber partners can also share a rider invite code. When a rider uses the code, the owner of the code will also get a referral bonus.  

Switch rideshare services, if possible 

One way of maximising income is by toggling between ridesharing systems. Some drivers choose to use both Uber and Lyft; it will depend on what kind of ridesharing apps are available in your area. 

You can choose to apply to be a driver for two ridesharing services. When you begin your driving period, log in to both applications. If you have received a rider request from one system, log out of the other. Upon completion of the ride, there are chances that you will have back-to-back rides.

However, if you find yourself waiting in one app, sign back into the other system as well. Keep repeating this cycle to make sure you can maximise your driving time. This will also prevent you from having a lot of vacant time, which can eat away at our profit. 

Take note that this strategy will require you to use a lot of mobile data. It will also use a lot of your battery, so make sure that you have a phone charger at hand at all times. 

Improve your chances of getting tips

Uber passengers are allowed to tip their drivers. The amount of the tip is at the discretion of the passenger. 

Directly asking passengers for tips can make them feel uncomfortable and may have an adverse effect, such as them leaving you a negative rating on the app. Uber passengers can rate a driver on a scale of 1 to 5 (5 being the highest). 

A negative rating will also affect your driving rating average, which will impact how Uber will match you with passengers. Drivers with low average ratings from riders also risk deactivation from the app and losing access to Uber.  

Here are ways to boost your driver rating and encourage your riders to leave you a five-star rating, along with a hefty tip:

• Provide complimentary water bottles – Offering passengers a free bottle of water can help them be more at ease during the ride. Aside from being tax deductible, it can lead to an increase in tipping and rating averages for drivers.You can also offer other essential items such as complimentary tissue, candies or other items that can help passengers feel more comfortable. 
• Make sure your car is clean – A vehicle with a bad odour or one that is filled with dirt can make a bad impression on passengers. Make sure to check your vehicle’s cleanliness on a regular basis. Always check the feedback regarding your car’s condition as well. 
• Be a responsible driver – Reckless driving can lead to very negative passenger reviews. Observe proper traffic rules and occasionally check in with passengers if they are comfortable with your driving speed.  
• Be polite and prompt – Be professional. Dress appropriately when driving and always arrive as early as possible for a rider request. Be polite when talking to passengers. This will improve their overall experience and may result in higher tips and better ratings. 

Want to know what other side hustles you can do in your spare time? Explore nestegg now to learn about other money-making opportunities. 

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Ridesharing services have grown in popularity, especially among career-orientated Aussies looking for a quick and easy side hustle. 

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With tens of thousands of Aussies turning to side gig and contracting work to generate an income, an expert has warned that many could fall foul with the ATO for failing to operate their activities as a proper business.

" ["fulltext"]=> string(2004) "

Coco Hou, the managing director of Platinum Accounting Australia and Platinum Professional Training, has explained that people taking up side gig and contracting work must ensure they follow the rules of business. 

“A lot of people have lost their jobs over the last 12 months or have been forced to cut back on the number of hours they work due to COVID.

“As a result, we are seeing a significant surge in the number of people taking up side gig and contracting work. Effectively, these people are starting up their own businesses and therefore should be managing their activities as legitimate businesses,” Ms Hou said.

Understandably, for many Aussies this is a completely new way of earning money and they have little to no understanding of their accounting and taxation obligations and the requirements associated with setting up and running a business.

“Like any other business, they need to apply for an ABN. 

“In addition, they also need to register for GST when their business reaches turnover of $75,000 or more. 

“If you start a new business and expect your turnover to reach $75,000 or more in the first year of operation, then you need to register for GST straightaway.”

Ms Hou believes many people are at risk of failing to set themselves up properly from the outset.

“Bookkeepers are in huge demand at the moment. While people are busily trying to build up their client base and deliver services as a side-gigger or contractor, they don’t have time to be focusing on the bookkeeping and accounting side of things.

“They are going to get themselves into trouble with the ATO. 

“This is why it is important for anyone who is now working in a side gig or contractor capacity to find themselves a good bookkeeper to ensure they are meeting their obligations and importantly capturing and recording all of their expenses so they can claim them come tax time,” Ms Hou concluded.

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• Yes

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With tens of thousands of Aussies turning to side gig and contracting work to generate an income, an expert has warned that many could fall foul with the ATO for failing to operate their activities as a proper business.

Write comment (0 Comments) " ["jcfields"]=> array(9) { [1]=> object(stdClass)#8577 (33) { ["id"]=> int(1) ["title"]=> string(17) "Automatic tagging" ["name"]=> string(17) "automatic-tagging" ["checked_out"]=> NULL ["checked_out_time"]=> NULL ["note"]=> string(0) "" ["state"]=> int(1) ["access"]=> int(1) ["created_time"]=> string(19) "2018-08-29 05:26:30" ["created_user_id"]=> int(2355) ["ordering"]=> int(-1) ["language"]=> string(1) "*" ["fieldparams"]=> object(Joomla\Registry\Registry)#8193 (3) { ["data":protected]=> object(stdClass)#7966 (1) { ["options"]=> object(stdClass)#7953 (2) { ["options0"]=> object(stdClass)#7946 (2) { ["name"]=> string(3) "Yes" ["value"]=> string(1) "1" } ["options1"]=> object(stdClass)#7945 (2) { ["name"]=> string(2) "No" ["value"]=> string(1) "0" } } } ["initialized":protected]=> bool(true) ["separator":protected]=> string(1) "." } ["params"]=> object(Joomla\Registry\Registry)#8192 (3) { ["data":protected]=> object(stdClass)#7944 (6) { ["hint"]=> string(0) 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Many home owners have joined the Airbnb community as host to earn money. How much profit can you make from this business venture?

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Since its launch in 2008, Airbnb has changed the hospitality industry game. It has set the standard for the new wave of short-term rental services, giving travellers and tourists the option to rent a unit, a room or an entire property rather than staying in a hotel.

For real estate owners and home owners, the digital marketplace platform presented an opportunity to make extra money by renting out their homes or rooms to guests. For the second quarter of 2019, Reuters reported that Airbnb took in more than US$1 billion in revenue. 

Hosts are also cashing in on the Airbnb hype. The home-sharing service company says hosts that have chosen to list their property on Airbnb have earned over US$80 billion. 

Currently, Airbnb has listings in 220 countries and in over 100,000 cities around the world. These figures are seen to continue rising. Data company AirDNA’s latest report showed that Australia’s short-term rental supply has seen a bump of almost 47 percent or almost 30,000 homes in the market last year. Across the country, these types of holiday rental accommodations generated around $3 billion in revenue. 

With thousands of Airbnb hosts taking a slice of the booming home-sharing service industry, you might be asking, how profitable is running an Airbnb?

How do you make money from being an Airbnb host?

Before becoming a host, you must have an understanding of the financial aspect of Airbnb.

Signing up and listing your property on Airbnb is free. Upon completing your listing, guests will be able to make a reservation request and book your accommodation. 

When someone books your space, Airbnb charges a standard host service fee of 3 per cent of your set price. For example, if you have set a nightly rate of $150  for a room and a guest stays for one night, you will get $145.50 and Airbnb will receive $4.50. This rate can rise up to 5 per cent, depending on the cancellation policy that you have established for your listing. 

Additionally, Airbnb will charge a guest service fee to the person who will rent the property. This fee can range between 5 per cent and 15 per cent, depending on the length of the stay, the type of the Airbnb listing, the final subtotal, and including other undisclosed factors. However, this fee will impact guests only, but not the host’s profit. 

When do you get payments from Airbnb?

Hosts receive payment from the booking through the payment option selected and in 24 hours after guests’ check-in time. 

But for new hosts, there is a longer waiting period. If you received a booking request on the first day your listing went live on Airbnb (which is very unlikely) it will be 30 days before you will receive your money. However, if you get your first booking after 31 days of registering, you only need for the payment to be received after the standard 24 hours. 

There are several factors that can affect your payout. There may be processing delays that may prevent you from receiving payment within the set timeline. Your profits may also be lower if your weekly or monthly discount has been applied to the booking. It can also be affected by weekend pricing or custom pricing. If applicable, value-added tax (VAT) may be added on top of the Airbnb service fee charge. 

How much money can you make on Airbnb?

Former Airbnb Australian manager Sam McDough said that hosts earn an average of $3,700 a year. However, that figure may vary drastically depending on a variety of factors, such as how frequently you rent out your place and how much your nightly rate is.

It might be surprising to hear, but having a fully booked month doesn’t always equate to higher profit. Let us compare the earnings of two hosts:

Host 1: Fully booked, lower nightly rate 

Nightly rental price: $70

Monthly occupancy: 100 per cent

Monthly Airbnb income: (30 x 100 per cent) x $70 = $2,100

Host 2: Partially booked, higher nightly rate

Nightly rental price: $100

Monthly occupancy: 75 per cent

Monthly Airbnb income: (30 x 75 per cent) x $100 = $2,250                                                                                                                                                                                                                                                                                                                                                                                            We can see the second Airbnb host still earned $150 more than the first host despite being partially booked. However, if the price point of the two hosts is the same, the first host will be ahead in profits. Therefore, it is important to be strategic in setting your nightly rates and your bookings when you are an Airbnb host. 

The amount of money you can earn from your Airbnb rental can also vary on the type of listing, the location and how well you list your property. 

For example, listing a property located in one of the capital cities will allow you to set your nightly rate higher due to the high demand for home-sharing services in these high-traffic areas. It may also impact how often your listing will be reserved.

According to OpenAgent, Airbnb rentals in Sydney and Melbourne take in higher average monthly revenues and have occupancy rates compared to other cities despite having a high number of active rentals. On average, Sydney hosts receive a $2, 965 monthly revenue with a 65 per cent occupancy rate and Melbourne hosts receive a $2,939 monthly revenue with a 67 per cent occupancy rate.

Renting out a property near a tourist destination or areas of interest can also make your listing profitable as tourists search out accommodations near these travel hotspots. You must also be aware of the off-season and peak seasons in the area of your listing. 

How much should I charge for my listing?

The nightly rate of your listing can make or break your success as an Airbnb host. You may opt to use the app’s Smart Pricing Tool that automatically changes the price of your listing based on several factors, such as demand, seasonality, availability and others. But if you are looking to maximise your profits, you must have the initiative to strategise on your pricing. 

Compare your prices with other listings

One way to have a competitive price is to use the map function on Airbnb or its price comparison tool. It allows you to look at what other people are offering in your area. Make sure that the properties you are comparing with are similar in terms of cost, location and amenities. 

For example, if you are renting out an entire house, filter your search to accommodations that offer the whole place or house. If you are renting your property that is nearer to transport links than competing listings, then you can boost the price of your accommodation. If your property has amenities such as a hot tub and similar accommodations in the area don’t have them, you may be able to increase your price. 

Alter the prices throughout the year 

After estimating the average nightly rate, make sure that the price listed by other hosts for their properties is true to what they listed. Some hosts will put some dates at a low rate for a few dates during the year. These days are usually during the off-peak seasons. By doing this, Airbnb will choose to list it at the lower price. But if you check closely, they will have higher rates for the majority of the year. 

Manage the pricing for on and off-peak seasons. If there are festivals or anticipated mass gatherings in your area, you can increase prices due to the high demand. 

How can you maximise your profit?

Now that you are informed on how you can profit from Airbnb, here are ways to maximise your profit from your listing:

Have a strategic listing 

Most first-time hosts disregard the importance of optimising their property’s listing, considering the step only as a formality. Without having first-hand experience in your space, potential guests can only make their choices based on listings. That’s why making a good impression is important to get guests. 

Become a superhost 

One of the best ways to increase your profit is to become a superhost. A superhost is a host that has a high rating on the Airbnb app, with an average of 4.8 plus out of 5. The high rating indicates that they have provided “extraordinary experiences” for their guests.

Airbnb rewards superhosts generously. As a superhost, your listing will have higher visibility on the platform. Superhost listings get featured in search results, emails and more. You will also be given a separate filter and a special badge on your profiles so your listing would stand out and attract potential guests. 

Due to your increased visibility as a superhost, you will have higher guest acquisition and thus more earning potential. Exclusive rewards are also offered to superhosts. When you refer a new host, you will receive an additional 20 per cent to the standard bonus rate. You are also entitled to a $100 travel coupon for each year that you maintain your status as a superhost.

The path to becoming a superhost is not easy. You must achieve and maintain a 4.8 or higher average rating based on reviews. The listing must have a minimum of at least 10 stays in a year. You must be responsive to guests and maintain a 90 per cent response rate or higher. A cancellation rate of 1 per cent or lower is also a qualification to be a superhost. 

Becoming a superhost will take patience, but the benefits are promising. Putting in the needed time and effort to reach the superhost status can help you gain a higher occupancy rate and more revenue. 

Be aware of costs associated with hosting

Like any other business, there are investments you need to put into your space if you want it to succeed. Make sure the cost you put into your property will not outweigh the average income you will get from being a host. 

Keep track of your upfront cost. This includes expenses for redecorating and refurbishing your space. You may also invest in amenities including basic equipment such as Wi-Fi, security cameras, kitchen appliances and others. 

Additionally, keep in mind that you will also have upkeep costs. A percentage of every booking is going to be used on some type of repair or ongoing maintenance, including carpet cleaning and replacing lost or broken items. 

We have all read the Airbnb horror stories about unruly guests and other unfortunate incidents, so make sure your investment is covered before you start hosting. While Airbnb offers a Host Guarantee (property damage protection of up to US$1 million), you should consider getting additional insurance for your accommodation.

You should also check your local laws about hosting and complete any requirements needed to operate legally. 

This would mean researching how occupancy tax collection works in your area. In some jurisdictions, Airbnb automatically collects and pays taxes on behalf of guests whenever a guest pays for a booking. By operating on the right side of the law and knowing all the regulations, you will avoid incurring penalties from the local government. 

Experts say that hosts should budget for their overall operating expenses to range from 25 per cent to as much as 75 per cent of their total income. But this percentage will also depend on the volume of bookings and how much of the bookings will be outsourced, such as managing the listing and cleaning services.

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