What is the best business type for Airbnb?
Picking the Right Business Setup
When I jumped into the short-term rental game, figuring out the best way to set up my Airbnb business was a big deal. The right choice can save you from headaches and even save you some cash. Here's a breakdown of the different ways you can legally set up your Airbnb business.
Business Types for Airbnb
Sole Proprietorship
This is the easiest way to start. You don't need much paperwork, and it's quick to get going. But there's a catch—if something goes wrong, like a guest getting hurt, your personal stuff (like your house or car) could be at risk.
Limited Liability Company (LLC)
An LLC is a favorite among Airbnb hosts, and for good reason (Hostaway). It protects your personal assets, so if something goes wrong, your personal bank account stays safe.
LLCs are also pretty flexible. You don't need a board of directors or regular meetings, and you avoid double taxation. Plus, you can split profits however you want among members.
Setting up an LLC isn't too pricey. You pay a one-time fee, and after that, you just need to file an annual report and pay some taxes.
Another cool thing about LLCs is that you can run multiple businesses under one LLC. This makes things easier if you have more than one rental property or other business ventures.
| Feature | LLC | Sole Proprietorship | Corporation |
|---|---|---|---|
| Asset Protection | Yes | No | Yes |
| Tax Flexibility | Yes | No | Yes |
| Administrative Complexity | Low | Low | High |
| Cost to Set Up | Moderate | Low | High |
Corporation
Corporations offer strong asset protection but come with more red tape. You need a board of directors, regular meetings, and detailed records. Plus, you get hit with double taxation—once on profits and again on dividends.
For me, an LLC was the sweet spot. It gave me the protection I needed without the hassle. The IRS treats single-member LLCs like sole proprietorships for tax purposes, which keeps things simple. Multi-member LLCs are usually treated like partnerships, but you can choose corporate taxation if that works better for you.
When I was deciding how to set up my Airbnb business, the LLC stood out. It offered the right mix of protection, tax benefits, and ease of management.
For more tips on starting an Airbnb business, check out our article on how to start an Airbnb business. If you're wondering whether Airbnb is a good investment, our piece on is Airbnb a good investment might help.
Top Airbnb Management Companies
Picking the right management company can make or break your Airbnb game. Let’s check out some of the top players, what they offer, and what it'll cost you.
Services and Pricing Options
Summer
Summer is a big name in the US Airbnb scene, boasting a 4.98 rating and Superhost status across the board. They offer a full suite of services:
- Professional design
- Furnishing
- Renovations
- Property underwriting
- Rental property marketing
- Listing promotion
- Instant Superhost status
- Dynamic pricing
- Revenue optimization
- 24/7 communications
- Reservation management
They charge 20% of your monthly rental income, covering everything. Curious about how Airbnb owners make money with companies like Summer? Check it out.
| Feature | Summer |
|---|---|
| Rating | 4.98 |
| Superhost Status | Yes |
| Pricing | 20% of monthly rental income |
Vacasa
Vacasa is your go-to for urban markets. They manage properties in 35 US states, plus Canada, Mexico, Belize, and Costa Rica. They handle everything, but their fees can go over 35% of your monthly revenue. You can cancel with a 90-day notice. Want to know more about managing an investment property for sale with Vacasa? Click the link.
| Feature | Vacasa |
|---|---|
| Reach | 35 US states, Canada, Mexico, Belize, Costa Rica |
| Pricing | Up to 35% of monthly revenue |
| Cancellation | 90-day notice |
Evolve
Evolve is great for local hosts who like to stay hands-on. They charge 10% of your monthly income for half-service management. You’ll need to handle licenses, permits, insurance, and maintenance yourself. You can cancel with a 15-day notice, but there’s a $250 fee if you cancel within the first 90 days. For tips on starting an Airbnb business, check out our guide.
| Feature | Evolve |
|---|---|
| Service Type | Half-service |
| Pricing | 10% of monthly income |
| Cancellation | 15-day notice, $250 fee if within 90 days |
Casago
Casago is perfect for investors with mixed property portfolios, from vacation rentals to corporate housing. Their pricing is flexible and depends on the location. You’ll need to provide furniture and appliances, sign a written agreement, and can cancel with a 30-day notice. Learn more about the most profitable place to own an Airbnb with Casago.
| Feature | Casago |
|---|---|
| Portfolio | Mixed property types |
| Pricing | Flexible, location-dependent |
| Cancellation | 30-day notice |
Air Concierge
Air Concierge is ideal for mid-term rentals. They offer full-service management with fees ranging from 10% to 25% of revenue, plus a $300 onboarding fee. Contracts can be for three months or a year, with termination fees of $3,500 and $7,500 respectively. For more advice on making the most money on Airbnb, check out our articles.
| Feature | Air Concierge |
|---|---|
| Service Type | End-to-end, off-site |
| Pricing | 10%-25% of revenue |
| Onboarding Fee | $300 |
| Termination Fee | $3,500 (3 months), $7,500 (1 year) |
Choosing the right management company can make a huge difference in your Airbnb success. For more tips on successful Airbnb management, explore our additional resources.
