Saving for retirement can feel overwhelming. One way to build long-term income is through property investment, especially vacation rentals.

According to industry reports, the average U.S. Airbnb host earns around $14,000 annually. The amount you earn, however, can rise significantly depending on your rental’s location, demand, and nightly rates.

Airbnb properties can become strong portfolio assets, especially if you combine real estate in a self-directed IRA. If you choose the right location, maintain the home, and treat guests well, you can earn a steady income that supports your retirement goals.

Below are seven practical tips to make your Airbnb investment profitable.

What is Airbnb?

Airbnb is a global marketplace where people rent out properties or spare rooms. The company takes about 3% of the host’s booking fee, plus a small percentage from guests. Rentals range from a single room to entire houses.

Today, Airbnb has more than 150 million guest users worldwide and over 7 million active listings across 220+ countries. That scale gives hosts access to a steady flow of potential renters, making the platform an attractive option for investors seeking passive income.

Hosts set rules, list amenities, and post photos. Guests book through the platform just as they would a hotel. For investors, the appeal lies in turning unused space into a reliable revenue stream.

7 Tips for Profitable Airbnb Investing

While just about any property can be an Airbnb or a rental, it doesn’t necessarily mean every property should be. If you want to start making a profit from your Airbnb rentals, follow these seven tips.

1. Check out the property before you buy

Location is a critical factor in an Airbnb investment. Guests want affordable spaces close to attractions, beaches, or city centers.

A property that is hours away from points of interest may struggle to draw guests in and maintain a steady stream of bookings.

The property’s structure is also essential, especially if you’re unwilling or unable to finance significant repairs or upgrades. A solid roof and foundation, accessible fire exits, and working plumbing and electricity can reduce the need for unnecessary work.

However, also take note of features that commonly attract guests, such as patios and decks.

2. Choose a convenient location

Whether they’re traveling for business or pleasure, guests want convenience. A property near restaurants, attractions, or convention centers is generally removed from those spots.

For example, business travelers often prefer rentals near convention halls. Families might seek spaces near amusement parks or shopping districts.

Proximity to the “action” makes your listing more competitive. Properties in walkable areas or close to public transportation also tend to book faster, since guests don’t want to waste time figuring out logistics.

The easier you make it for visitors to explore, the more likely they will choose (and return to) your rental.

Keep in mind that convenience and attraction aren’t necessarily a city-based concept. The same applies to secluded homes near hiking trails or ski resorts.

3. Elevate the Guest Experience

Hospitality is what makes your Airbnb stand out from the competition. Stocking the basics, like toiletries and fresh linens, is a great start.

You should consider extending beyond that by adding thoughtful extras like games, snacks, and a guide to neighborhood hot spots.

The aim is to make a guest feel valued and at home, helping them create a memorable experience—one that they will share with friends and family. These efforts also increase the likelihood of positive reviews and repeat bookings, both of which can lead to steady retirement income.

4. Keep up with the property

Your property’s condition directly impacts reviews and repeat business. Guests won’t book a run-down rental. Routine maintenance, modern decor, and timely repairs show guests you care about their comfort.

Think beyond livable. Make it memorable. A clean, stylish property encourages guests to return and recommend it to others.

Even minor upgrades, like fresh paint or updated lighting, signal that the home is well cared for. Regular inspections also help you catch minor issues before they turn into costly repairs, protecting both your rental income and your long-term investment.

Tip: If you hold the Airbnb property in your SDIRA, remember that you can’t do work on the property. Instead, you’ll need to hire someone to do the work.

5. Generate positive reviews

In the digital age, reviews drive bookings. Encourage satisfied guests to share feedback on Airbnb and social media. Professional photos, clear communication, and unique decor also boost your chances of glowing reviews.

Reviews are more than feedback; they are free marketing that builds trust with future guests. A steady stream of five-star ratings also helps your listing rank higher in Airbnb search results, giving you an edge over competitors.

6. Keep it clean

Cleanliness—or lack thereof—ranks among Airbnb guests’ top complaints. Cleanliness is non-negotiable. Deep clean regularly, hire a reliable cleaning service, maintain the yard, and ensure each guest arrives at a spotless property. A dirty rental not only ruins guest experiences but also guarantees negative reviews.

Further protect your investment with clear rules on pets, smoking, or other activities. Consider additional home insurance for coverage against theft, fraud, or accidental damage.

7. Set Smart Prices

Pricing makes or breaks occupancy rates. Be transparent and adjust rates for seasonal demand. Higher prices during peak seasons boost profits, while competitive off-season rates keep your property booked.

Track income versus expenses carefully. Aim for a balance: Don’t underprice your rental, but don’t price yourself out of the market either.

Building Your SDIRA with Airbnb

With careful planning, Airbnb rentals can fund a portion of your retirement. They offer steady cash flow, tax advantages, and long-term equity growth.

To maximize your strategy, consider placing your Airbnb property inside a Self-Directed IRA (SDIRA). This allows your rental income to grow tax-deferred or tax-free, depending on the account type.

Before investing, consult with a trusted Horizon Trust advisor. With the right property and financial plan, your Airbnb can become a powerful retirement asset.

FAQs

Is Airbnb a good retirement investment?

Yes. With the right location and management, Airbnb properties can generate consistent passive income that supplements retirement savings.

How much money can I make with an Airbnb?

Airbnb reports an average of about $15,000 per year for U.S. hosts. Earnings vary widely by location, property type, and guest demand. Assess the location and property to determine a realistic expectation for a specific property.

Do I need a property manager for my Airbnb?

If your Airbnb is held in a Self-Directed IRA (SDIRA), then yes, you’ll need a third-party property manager. IRS rules prohibit you, as the account holder, from directly managing or maintaining the property.

Handling bookings, cleaning, or repairs yourself would count as a prohibited transaction.

A property manager ensures your rental stays compliant by overseeing guest communication, maintenance, and expenses on behalf of the SDIRA. While this adds a cost, it protects the tax benefits of your retirement account and often improves occupancy rates, reviews, and overall income.