How to Start an Airbnb Business in Florida

⚠️ Disclaimer: This article is for informational purposes only and does not constitute legal, financial, or real estate advice. Short-term rental laws and regulations vary by city and county in Florida. Consult a licensed attorney, property manager, or local authorities to ensure compliance before starting an Airbnb business or rental arbitrage.

What is everyone doing on Airbnb that is making so much money? We’re going to talk about what Airbnb is, but more importantly, what an Airbnb business is and how to start one in Florida. We’re going to give you some more terminology and definitions, because by the end of this article, you’ll understand that there is more than one business model in the Airbnb space.

What Is Airbnb?

So first of all, what is Airbnb? A lot of people think they know, but Airbnb is not what you think. It’s not a hotel chain. It’s not some big empire. Airbnb is software. It’s a peer-to-peer OnDemand software that’s not much different than Uber or WagWalking or all the other apps. Basically, it’s connecting service providers with people who want that service. And in this case, we’re talking about travel accommodations in Florida and beyond.

The Airbnb Sharing Economy

What Airbnb has done is it has created a movement by lowering the barrier, where many people can put their home on Airbnb and people can find it on Airbnb and then pay that person and then they can live there. So it leads to the new economy, the Airbnb sharing economy in Florida and other states.

What Is an Airbnb Business?

So what is an Airbnb business? Well, basically, an Airbnb business is a more layman’s term for something that has been around for a long time. It’s a short-term rental business or a vacation rental business or a furnished accommodation business. Or you could also say a corporate housing company. All of these companies and titles are pretty much the same, meaning they will put furniture in a house or put furniture in a place and then someone will stay there for a certain number of dates. 

With Airbnb, it can be as short as a day, whereas with corporate housing companies, typically, people will stay for three months or more. An Airbnb business in Florida specifically leverages Airbnb as a technology, as one of the many technologies that you can use to market a home by putting furniture in a place and then renting it out for a number of days.

Why It’s Not Enough to Just Furnish a Space

Now, you need to understand a few things here, because that’s not enough, right? That wasn’t enough to start with. You put furniture in the house and put it up for sale or rent it out. Now, there are a few different types of business models that revolve around short-term rentals in Florida.

Short Term vs Long Term Rentals

What exactly is a short-term rental? Short-term rentals vary by state. In Philadelphia, a short-term rental is someone who stays for less than 90 days. In Texas, it’s someone who stays for less than 30 days, and in California, it’s someone who stays for less than 28 days. So a short-term rental is a place, like a hotel, or a house that’s designed to provide people with the necessities of life. And you’re allowing people to stay for a short period of time. And it’s going to vary from state to state, from city to city, in terms of length. A long-term rental is usually an unfurnished home that you sign a typical lease on, and you live there for six months, a year, two years. So that’s the difference. A short-term rental is designed for daily or weekly use only, including in Florida’s holiday markets.

Business Model: Renting Out Your Own House

It’s a very easy way to start if you own a house in Florida—that’s where an Airbnb business started. Renting out a spare room or renting out your living room.

The founders in San Francisco, when they first started this business, were trying to rent out an air mattress on the floor of their living room. And that’s where Airbnb got its name. Airbed and Breakfast. Air standing for air mattress.

Listing Your Entire Space

Homeowners can list their entire space without any hassle because they own the home. So this is one way to run an Airbnb business.

Renting Out Private Rooms

You can also rent out private rooms. So if you rent a two-bedroom apartment somewhere like New York, if you live in that place, you can do Airbnb. If you’re a renter in your own home, you can rent out an extra room so you can make money as a renter in the Airbnb business which is now, in a way, subletting a room. That’s one way.

Business Model: Rental Arbitrage

Another business model for Airbnb is called rental arbitrage. Basically, you don’t own a home. You find someone else who owns a home or you find an apartment complex with lots of rooms and you convince the owner or property management who represents the property to let you rent that property. You become a renter, but then you market the property after you list it and you find other people to stay short-term. So you’re signing a long-term lease for less than the nightly deposit. A $1,500 monthly lease means that to break even, you need to deposit $50 per day to break even on a $1,500 monthly lease. But if you’re charging $150 per day, that’s a $100 margin per night. Rental arbitrage in Florida is especially popular in coastal cities and vacation markets.

Regulations and Timing

Now, there are new regulations. It’s a great time to talk about how cities are changing regulations.

Business Model: Cohosting

With cities that don’t allow anything like rental mediation, but you want to build a scalable Airbnb business and you don’t need to buy a lot of homes, you can do something called cohosting.

What Is Cohosting?

What is cohosting? Cohosting is basically where you find a property owner and you just let them list their home and manage their home on Airbnb. You have a landlord who owns the property, and instead of them having a regular tenant there, you work side by side with them. You guide them through the furnishing of the home, making the place look nice. And then you handle all the guest interactions. Check-in, check-out, managing the cleaners who clean the home. You’re like the operating partner of the business model.

Bypassing Regulations Through Cohosting

If a city says everyone can have one Airbnb, and you’re a host, you could partner with 20 different businesses or homeowners, and have 20 Airbnbs in your portfolio. As a co‑host, where there are 20 different owners (one for each home), this is a way to legitimately bypass city regulations if you want to start and build an Airbnb business in a city that won’t allow it because of strict ordinances, including in parts of Florida.

Market Reality

Only 8% of cities are completely anti-AirBnB. That still leaves over 90% of the market.

Conclusion

So with that said, that’s Airbnb in a nutshell. It’s an Airbnb business. Short-term rentals, corporate housing, and of course rental arbitrage in Florida and other states.