How Much Does It Cost to Start an Airbnb? Complete $10K Breakdown (2025)
Preston Seo
Starting an Airbnb business requires approximately $10,000 in initial capital. This complete breakdown shows you exactly where every dollar goes, how to negotiate costs down, and the timeline to recoup your investment. By month six, your initial investment pays for itself—and from there, it's pure profit that compounds into additional properties.
Preston scaled from $6,000/month to $20,000/month in just three months using this exact framework. Here's the complete roadmap.
In this article:
- Complete Cost Breakdown
- Step-by-Step Setup Process
- How to Save on Startup Costs
- Building Your Team
- ROI Timeline & Projections
- Preston's Scaling Story
- FAQs
Quick Summary: Airbnb Startup Costs at a Glance
| Category | Cost Range | Notes |
|---|---|---|
| LLC Setup | $500 | Legal protection for personal assets |
| Market Research (AirDNA) | $200-$500 | Paid version for deep market analysis |
| First Month Rent | $2,500 | Average for profitable markets |
| Security Deposit | $2,500 | Negotiable with good credit |
| Furniture & Supplies | $3,000-$5,000 | Essential furnishings and decor |
| Movers/Assembly | $500-$600 | Professional furniture assembly |
| Professional Photography | $200-$400 | Critical for listing performance |
| Cleaning Supplies | $200-$300 | Initial stock |
| TOTAL | ~$10,000 | Complete setup cost |
Complete Airbnb Startup Cost Breakdown
You need approximately $10,000 to launch your first Airbnb property. Here's exactly where that money goes and why each expense matters.
1. LLC Formation: $500
What it is: A Limited Liability Company that separates your personal assets from your business.
Why it matters: If a guest gets injured or files a lawsuit, your personal savings, home, and other assets are protected. The LLC acts as a legal shield between you and potential liability.
How to set it up:
- Option 1: Use LegalZoom.com or similar online services
- Option 2: Search "real estate lawyer [your city]" on Google for local assistance
Cost varies by state, but budget approximately $500 for formation fees, registered agent services, and any necessary filings.
While an LLC isn't absolutely required to start, it's strongly recommended. The $500 investment provides peace of mind and professional protection that becomes essential as you scale.
2. Market Research Tools: $200-$500
What it is: Data-driven tools that reveal which markets and properties will be profitable before you commit capital.
The recommended tool: AirDNA provides access to rich market data including average daily rates, occupancy rates, revenue projections, and competitive analysis.
Free vs. Paid:
- Free version: Sufficient for high-level market research and initial exploration
- Paid version: Essential for deep dives into specific markets you're seriously considering
Cost structure: Paid subscriptions cost a few hundred dollars depending on how many market areas you purchase access to.
Why this investment pays off: Without proper market research, you're guessing. With AirDNA data, you know exactly what similar properties earn before signing any lease.
3. First Month's Rent: $2,500
What it is: Your first month's rent payment to the landlord.
The benchmark: In most profitable Airbnb markets, expect monthly rent around $2,500 for properties suitable for short-term rental arbitrage.
Important note: This is just rent. Total monthly operating costs including utilities and reserves will run approximately $3,000/month.
4. Security Deposit: $2,500 (Negotiable)
What it is: Refundable deposit held by the landlord to cover potential damages.
Standard expectation: One month's rent as security deposit.
Negotiation opportunity: With good credit and a clean background, you can often negotiate a reduced security deposit. Tell the landlord you're reserving that budget to invest in improvements that will benefit their property and create better experiences for guests.
More often than not, landlords will agree to reduced deposits when you frame it as investing in their property rather than keeping cash in reserve.
5. Furniture & Supplies: $3,000-$5,000
What it is: Everything needed to furnish and stock your property for guests.
Essential categories:
- Beds, mattresses, and bedding
- Living room furniture (sofa, chairs, TV)
- Dining table and chairs
- Kitchen essentials (cookware, dishes, utensils)
- Bathroom supplies and linens
- Decor and finishing touches
Quality matters: Your furniture choices directly impact guest reviews, which directly impact bookings and revenue. Don't cut corners on beds and bedding—guests notice immediately.
6. Movers & Assembly: $500-$600
What it is: Professional movers to transport and assemble furniture in your property.
Why hire professionals: Proper assembly ensures furniture lasts longer and looks better. Attempting DIY assembly across an entire property wastes time and often results in subpar results.
What's included: Delivery of furniture items, assembly of beds/desks/tables, placement throughout property, and removal of packaging materials.
7. Professional Photography: $200-$400
What it is: High-quality listing photos taken by a professional photographer.
Why this is non-negotiable: Professional photography is the difference between a property earning $50,000 per year versus $80,000 per year. Your photos are the first thing guests see—they determine whether someone clicks on your listing or scrolls past.
What to expect: A professional will capture your property in optimal lighting, stage rooms effectively, and deliver edited images optimized for Airbnb's platform.
Don't skip this expense. The ROI on professional photography is measured in thousands of dollars annually.
Step-by-Step Setup Process
Follow this sequence to launch your Airbnb business efficiently. Each step builds on the previous one.
Month 1: Foundation & Research
Week 1-2: Legal Setup
- Form your LLC ($500)
- Open a business bank account
- Set up basic business infrastructure
Week 3-4: Market Research
- Subscribe to AirDNA ($200-$500)
- Analyze 3-5 potential markets
- Identify neighborhoods with strong STR fundamentals
- Research local regulations and permit requirements
Capital deployed: ~$500-$1,000
Time invested: Research phase—no property costs yet
Month 2: Property Acquisition
Week 1-2: Property Search
- Search for properties matching your criteria
- Schedule viewings
- Evaluate each property against AirDNA projections
Week 3-4: Negotiation & Signing
- Negotiate move-in date (2-4 weeks out to save on holding costs)
- Negotiate security deposit reduction
- Sign lease agreement
Key negotiation: When asked when you'd like to move in, always request 2-4 weeks from signing. This accomplishes two things:
- You don't pay rent until you actually move in
- Furniture has time to arrive before your first payment
Example savings: If rent is $3,000/month and you negotiate a 3-week delayed move-in, you save $2,100 in holding costs.
Month 3: Setup & Launch
Week 1: Furniture Ordering
- Order all furniture and supplies
- Coordinate delivery schedules
- Arrange mover/assembly services
Week 2: Property Preparation
- Receive and assemble furniture
- Stock all supplies
- Set up utilities and wifi
Week 3: Photography & Listing
- Schedule professional photographer
- Create compelling listing description
- Set competitive initial pricing
- Publish listing
Week 4: First Bookings
- Respond quickly to inquiries
- Fine-tune pricing based on demand
- Welcome first guests
How to Save Thousands on Airbnb Startup Costs
Strategic negotiation can reduce your startup costs by $2,000-$3,000. Here are the specific tactics that work.
Negotiate Move-In Timing
The strategy: Request to move in 2-4 weeks after signing the lease.
Why it works: You're not paying rent for a property sitting empty while you prepare it. Instead, you use those weeks to order and receive furniture.
Example calculation:
- Rent: $3,000/month
- 3-week delayed move-in = $2,100 saved
- This alone covers your LLC formation and market research tools
Reduce Security Deposit
The strategy: With good credit and clean background, ask to pay less than a full month's security deposit.
The pitch: "I'd like to reserve that budget to invest in improvements that will make your property more valuable and create better experiences for guests."
Why landlords agree: They'd rather have a tenant investing in their property than holding cash in reserve. The improvement pitch positions you as someone who will care for and enhance their asset.
Leverage Existing Credit
Optional strategy: Use credit lines for additional capital flexibility.
Important note: This is optional and depends on your financial situation. Some operators use 0% APR promotional periods to spread costs, then pay off balances with early revenue.
Time Furniture Purchases
The strategy: Order furniture during your delayed move-in period so it arrives just before you take possession.
Why it works: No storage costs, no wasted time, and furniture is ready when you need it.
Building Your Airbnb Team
You need three key team members to prevent your Airbnb from becoming a full-time job. Here's who to hire and what to expect.
Your Cleaner: The Most Important Hire
Role: Turns over the property between guests, maintaining the quality standards that drive positive reviews.
Pricing: Varies significantly based on:
- Property configuration (bedrooms/bathrooms)
- Square footage
- Your local market rates
How to find the right rate:
- Check similar properties on Airbnb in your area
- Note what they charge for cleaning fees
- Use that as your benchmark when interviewing cleaners
Don't haggle too much on cleaner pricing. The cleaning fee is charged to guests, so your out-of-pocket cost is minimal. A reliable, thorough cleaner is worth paying for.
Your Handyman: Maintenance & Repairs
Role: Handles repairs and maintenance issues as they arise. Properties have problems—someone needs to fix them quickly.
Pricing: $40-$50/hour depending on the job and your market.
When you'll need them:
- Plumbing issues
- Electrical problems
- Appliance repairs
- General wear-and-tear fixes
- Emergency situations
Your Movers: Initial Setup
Role: Transport and assemble furniture during initial property setup.
Pricing: $500-$600 for a full property setup.
One-time cost: Unlike cleaners and handymen, movers are primarily needed at launch. You may occasionally need them for furniture replacements or additions.
ROI Timeline: When You'll Make Your Money Back
With $2,000/month average cash flow, you recoup your $10,000 investment in approximately 5-6 months. Here's the month-by-month projection.
Month-by-Month Cash Flow Projection
| Month | Activity | Investment | Revenue | Cumulative P/L |
|---|---|---|---|---|
| Month 1 | Research & LLC | $1,000 | $0 | -$1,000 |
| Month 2 | Property acquisition | $5,500 | $0 | -$6,500 |
| Month 3 | Setup & launch | $3,500 | $1,000 | -$9,000 |
| Month 4 | Operating | $3,000 | $5,000 | -$7,000 |
| Month 5 | Operating | $3,000 | $5,000 | -$5,000 |
| Month 6 | Operating | $3,000 | $5,000 | -$3,000 |
| Month 7 | Operating | $3,000 | $5,000 | -$1,000 |
| Month 8 | Operating | $3,000 | $5,000 | +$1,000 |
Assumes $5,000 gross revenue, $3,000 monthly expenses, $2,000 net cash flow
The Compounding Effect
After month 6-8, everything changes. Your initial investment is recovered, and monthly cash flow becomes capital for your next property.
The multiplication strategy:
- Property 1 generates $2,000/month
- After 5 months, you have $10,000 to invest in Property 2
- Properties 1 + 2 generate $4,000/month
- After 2.5 months, you have $10,000 for Property 3
- The cycle accelerates with each addition
This compounding effect is why most people should take advantage of the Airbnb arbitrage model. You don't need hundreds of thousands in upfront capital—you need $10,000 and patience.
Preston's Scaling Story: $6K to $20K in 3 Months
Preston's results demonstrate what's possible with consistent execution. Here's his progression.
December 2021: $6,000/Month
Preston was generating $6,000/month in cash flow from his Airbnb portfolio. Solid income, but room to grow.
March 2022: $20,000/Month
Just three months later, Preston had more than tripled his monthly income to $20,000—all from just 3 Airbnb properties.
The Math Behind the Growth
| Metric | December 2021 | March 2022 | Change |
|---|---|---|---|
| Monthly Cash Flow | $6,000 | $20,000 | +233% |
| Properties | - | 3 | - |
| Avg. per Property | - | $6,667 | - |
| Growth Period | - | 3 months | - |
Key Factors in Preston's Rapid Scale
1. Reinvestment Strategy: Rather than spending profits, Preston reinvested cash flow into additional properties.
2. Market Selection: Chose markets with strong fundamentals and consistent demand.
3. Systems & Processes: Built repeatable systems that allowed rapid expansion without proportional time investment.
4. Team Building: Delegated day-to-day operations to reliable team members (cleaners, handymen).
"Fast forward to today, I'm making around $20,000 a month from just three Airbnbs. Airbnb arbitrage is a beginner-friendly model that can give you significant income without having to spend hundreds of thousands of dollars."
Why Airbnb Arbitrage is Beginner-Friendly
Unlike traditional real estate investing, Airbnb arbitrage doesn't require massive capital or perfect credit. Here's why it works for beginners.
Low Barrier to Entry
Traditional Real Estate:
- Down payment: $50,000-$100,000+
- Mortgage qualification required
- Property maintenance responsibility
- Years to see meaningful returns
Airbnb Arbitrage:
- Startup cost: ~$10,000
- No mortgage needed
- Landlord handles major repairs
- ROI in 5-6 months
Scalable Without Massive Capital
The compounding model allows you to grow using profits rather than savings. Each property funds the next, creating a self-sustaining growth engine.
Transferable Skills
Running an Airbnb develops valuable skills:
- Property management
- Customer service
- Marketing and pricing
- Team leadership
- Financial management
These skills compound over time and transfer to other business ventures.
Watch the Full Breakdown
Video highlights:
- 0:00 - Introduction to Airbnb startup costs
- 1:30 - LLC setup and legal protection
- 2:45 - Market research with AirDNA
- 4:00 - Negotiating move-in timing and deposits
- 5:30 - Monthly costs breakdown
- 6:15 - Building your team
- 7:30 - ROI timeline and payback period
- 8:00 - Compounding strategy and scaling
Frequently Asked Questions
How much does it cost to start an Airbnb business?
You need approximately $10,000 to start an Airbnb arbitrage business. This includes LLC setup ($500), market research tools ($200-$500), first month's rent and security deposit ($5,000-$6,000), furniture and supplies ($3,000-$5,000), professional photography ($200-$400), and team setup costs.
Can you start Airbnb with less than $10,000?
Yes. Strategic negotiation can reduce costs significantly. Delay your move-in date by 2-4 weeks to save on holding costs, negotiate reduced security deposits, and leverage credit lines for additional flexibility. Some operators launch with $5,000-$7,000.
How long until I make back my investment?
With average monthly cash flow of $2,000, expect to recoup your $10,000 initial investment within 5-6 months. After that, earnings become pure profit available for reinvestment into additional properties.
What are the ongoing monthly costs?
Budget approximately $3,000/month for total operating costs including rent ($2,500 average), utilities, cleaning supplies, repair reserves, and software subscriptions. With $5,000+ gross revenue, this leaves approximately $2,000 in monthly cash flow.
Do I need an LLC?
An LLC isn't legally required but is highly recommended. It protects your personal assets from business liabilities. Setup costs around $500 through LegalZoom or a local real estate attorney.
What if I can't find a property in my area?
Airbnb arbitrage works in most markets with tourism or business travel demand. Use AirDNA to identify promising markets within driving distance, or consider remote management with a reliable local team.
Start Your Airbnb Journey
Ready to launch your first Airbnb property with $10,000?
The numbers are clear: $10,000 startup cost, 6-month ROI timeline, and the potential to scale to $20,000/month or more using the compounding strategy.
Learn the complete system with Legacy Investing Show
Helpful Resources
About Legacy Investing Show
Legacy Investing Show is Preston Seo's comprehensive Airbnb arbitrage training program. Since founding, the program has:
- Trained 2,000+ students across the United States
- Generated $10M+ in cumulative student revenue
- Built an active community of short-term rental investors
- Produced numerous students earning $10K+/month
Preston created Legacy Investing Show to teach the exact systems that scaled his business from $6,000 to $20,000/month in just three months.
Learn more about the program | Watch free training
This guide is based on Preston Seo's video breakdown of Airbnb startup costs. All cost estimates are guidelines—actual costs vary by market, property type, and individual circumstances. Individual results depend on market selection, execution quality, and capital invested.
Last updated: January 24, 2026
Frequently Asked Questions
You need approximately $10,000 to start an Airbnb arbitrage business. This includes LLC setup ($500), market research tools ($200-$500), first month's rent and security deposit ($5,000-$6,000), furniture and supplies ($3,000-$5,000), professional photography ($200-$400), and team setup costs.
Yes, you can reduce startup costs through strategic negotiation. Ask to move in 2-4 weeks after signing to save on holding costs, negotiate reduced security deposits with good credit, and leverage credit lines for additional capital. Some operators start with $5,000-$7,000 using these strategies.
With average monthly cash flow of $2,000, you can recoup your $10,000 initial investment within 5-6 months. After that, your earnings become pure profit that can be reinvested into additional properties.
Monthly operating costs typically run around $3,000 including rent ($2,500 average), utilities, repair reserves, cleaning supplies, and software subscriptions. With gross revenue of $5,000+, this leaves approximately $2,000 in monthly cash flow.
An LLC is not absolutely required but highly recommended. It protects your personal assets from business liabilities in case of lawsuits. Setup costs around $500 through services like LegalZoom or a local real estate attorney.
AirDNA is the recommended market research tool. The free version works for high-level research, while the paid version ($200-$500 depending on markets) provides deep dives into specific areas including revenue projections, occupancy rates, and competitive analysis.
Budget $3,000-$5,000 for furniture and supplies. This includes essential furniture, bedding, kitchen supplies, and decor. Hiring movers to assemble furniture costs $500-$600, and professional photography runs $200-$400.
Build a core team of three: a cleaner (most important - charges based on property configuration), a handyman ($40-$50/hour for repairs and maintenance), and movers ($500-$600 for initial furniture assembly). This team prevents your Airbnb from becoming a full-time job.
Yes. The compounding effect makes Airbnb arbitrage powerful for beginners. Preston scaled from $6,000/month to $20,000/month in just 3 months (December 2021 to March 2022). The low barrier to entry and ability to reinvest profits enables rapid scaling.
Results vary by market, but Preston generates $20,000/month from just 3 Airbnb properties. Average cash flow is $2,000/month per property after expenses. With the compounding strategy, you can add new properties every 5-6 months using profits from existing ones.