How to start a UK Airbnb business in 8 steps

Airbnb is as popular as ever, with 7.7 million+ active listings in 2025. With short-term lettings becoming an increasingly popular way to earn extra income or even build a full-time business in the UK, now’s the time to start an Airbnb business by reimagining your spare room, purchasing buy-to-let property or even getting into property management. 

Whichever path you choose(with a bit of planning and the right approach), launching a successful Airbnb business can be simple and relatively low-cost. For many, the journey starts with the simple act of listing a space and welcoming the world through the front door. 

Here are 8 easy steps to getting your Airbnb business off the ground.

In this article:

• What do I need to start an Airbnb business?
• Choosing an Airbnb business model
• How to start an Airbnb business
• How much do I need to start an Airbnb business?
• How to start an Airbnb business without owning property
• Do I pay council tax or business rates on my Airbnb business?
• Do I need business insurance?
• Should I buy an Airbnb business for sale?
• Understanding health and safety laws
• Your startup

The answer depends on what type of Airbnb business you want to start, run and grow. For example:

• If you want to be a traditional host, you’ll need access to a property — whether that’s a spare room in your own home, a second property, or even a property you’re leasing with permission to sublet

• If you want to manage properties, the requirements shift a bit. You don’t need your own property, but you will need strong organisational skills, knowledge of the short-term rental market, and ideally some experience in property management or hospitality 

No matter what kind of Airbnb business you want to start, there are common practical skills that’ll come in handy. These include:

• Basic property maintenance knowledge
• Good customer service abilities
• Decent photography skills for creating listings
• Excellent knowledge of the Airbnb platform

You don’t need formal qualifications to run an Airbnb business, but if you’re managing multiple properties, having some experience in hospitality or a property management certificate certainly helps build credibility with property owners and guests. 

There are several different Airbnb business models you can choose from, depending on your circumstances, budget, and business goals. Let’s look at them now:

• Traditional Airbnb host: This is when you own (or have permission to use) a property and rent it out to guests directly through the Airbnb platform. You handle everything from creating the listing to welcoming guests, managing the cleaning, and taking bookings

• Airbnb co-host: Co-hosting involves partnering with property owners who want to list their space on Airbnb but don’t want to manage it themselves. This means that you handle the day-to-day operations like responding to enquiries, coordinating check-ins, and arranging cleaning in exchange for a percentage of the booking revenue typically 10–25%)

• Airbnb property manager: This is similar to co-hosting but is usually more formal. Property managers often handle multiple properties and take care of everything — from the property’s marketing and guest communication to maintenance and financial reporting. You can typically charge higher fees (often 20–30% of the property’s rental income) for this type of service

• Rental arbitrage: This is when you rent a property long-term from a landlord, then sublet it on Airbnb for short stays. Your profit comes from the difference between what you pay in rent and what you earn from guests. To do this, you need explicit permission from your landlord, and the model carries more risk than the others because you’re committed to paying rent regardless of your booking levels

• Airbnb consultant or setup service: If you’ve got experience and expertise in the short-term rental market, you could help Airbnb hosts with their listings, improve their pricing strategies, or even set up their Airbnb businesses from scratch. This model requires the least money to get started, but relies heavily on your knowledge and reputation

Ultimately, the Airbnb business model you choose should reflect your experience, expertise, and the lifestyle you want. If you love interacting with people and own a property to let, perhaps traditional hosting is for you. Or if you’ve already got a career in property and want to help others, perhaps becoming a consultant could work for you instead.   

Right, let’s get into the nitty gritty. Here’s your easy 8 step roadmap for launching your Airbnb business:

Before you do anything else, you need to nail down which business model for Airbnb makes the most sense for you.  Are you going to host a property you own, manage other people’s properties, or try rental arbitrage? 

Your choice here will shape everything that follows, from how much money you need to what permissions you’ll need to follow and how you’ll structure your business. To help you decide, think honestly about your resources, skills, and risk tolerance: 

• Do you like the idea of hosting people?
• Are you risk-averse?
• How much startup capital do you have? 
• Do you want full control over your business or are you happy to co-host?

Take your time with this decision. Switching business models later isn’t impossible, but it’s much easier to start on the right path from the beginning.

Short-term rental laws in the UK are a bit complicated and vary depending on where you’re located. 

In Scotland: You need to apply for a short-term let licence. 

In Northern Ireland: You need to apply and pay for a Tourism Northern Ireland certification.

In England and Wales: Rules are set by local councils in England and Wales, so checking your local council’s website is crucial. Some local councils ask that you apply for planning permission if you’re renting out a property for more than 90 nights per year as a short-term let, particularly in London. 

Good to know: From summer 2026, the UK is introducing a mandatory national register for all short-term lets and new planning rules, creating a specific use class for non-primary residences.

UK-wide: 

• If you have a mortgage: check your mortgage terms. Most lenders require permission before you can rent out your property on Airbnb, and some may adjust your mortgage rate if you’re running a business
• If you’re leasing to sublet: your tenancy agreement very likely doesn’t allow subletting without landlord consent, so you’ll need written permission
• Good news! If you’re renting out your main home for short periods, you can earn up to £7,500 per year tax-free under the Rent a Room Scheme

Creating a business plan is your chance to think through every aspect of your business and spot potential issues before they become problems.

Plus, if you need financing or want to convince property owners to work with you as a co-host or manager, a professional business plan demonstrates you’re serious and capable. Your business plan should include several key sections:

• Executive summary: an overview of your business and goals
• Your skills and experience: why you’re the best person for the job
• The market: full competitor analysis and your target audience
• Products and services: list your products, services and explain your prices
• Sales and marketing: include a marketing plan explaining how you’ll attract guests and stand out from other listings. 
• Operations: what your business looks like day-to-day, including details of equipment, business licences, and processes
• Financial forecast: list all your startup costs, income, and ongoing expenses and create a cash flow forecast. Will you adjust rates seasonally? How will you handle minimum stay requirements?

To help, you can download our free business plan, which is packed with helpful tips and advice.

When you’re creating your plan, make sure it’s as detailed as possible. Research your market, set realistic expectations about income (it usually takes a few months to build up good reviews and consistent bookings), and consider what tech or processes you’ll need to handle bookings, cleaning, and guest communication. 

Also, provide answers to questions like: 

• What will your house rules be? 
• How will you handle problems or complaints? 
• What is your cancellation policy? 

The more thorough the business plan, the fewer surprises you’ll encounter along the way!

You’ll need to choose whether you want to operate as a sole trader or set up a limited company. Here’s a quick rundown of the main differences:

• Setting up as a sole trader requires registering for self–assessment with HMRC. There are fewer ongoing admin requirements but you’re personally responsible for any business debts or legal issues
• Setting up a limited company is a bit more involved as there’s more paperwork and ongoing company responsibilities like corporation tax returns and annual accounts. But you get limited liability, which protects your personal assets, like your home and car, because you and your business are separate legal entities. A limited company also looks more professional and established than a sole trader. 

For most first-time founders with a single property or a small co-hosting operation, sole trader status might make sense initially. Switching from sole trader to limited company is easy and it’s a common path many founders take once their business grows. However, if you’re planning to manage multiple properties or take on significant financial commitments, a limited company offers better protection from the start

Once you’ve decided on your business structure, it’s time to make it official. If you’re going down the sole trader route, you’ll need to:

• Register with HMRC for self–assessment
• You can do this online and it’s completely free
• Then, you’ll need to file a tax return each year declaring your Airbnb income and expenses

If you’re going down the limited company route, you’ll need to:

• Register your company with Companies House
• You can register your company yourself on the Companies House website (£100 fee), or use an official company registration agent like Countingup (free when you spend £100 on your new Countingup card)

As part of the company registration process, you need to choose a company name (use a company name availability checker to make sure your preferred name isn’t already taken), appoint at least one director, and issue shares. 

This might sound complicated, but if you choose to register your company through Countingup, our team walks you through every step of the process. When you’ve successfully registered, your business is listed on the Companies House public register. 

If you want to run an Airbnb business, insurance is absolutely essential. You need to protect your guests and your business at all times. 

Here are the common types of insurance you might want to consider. Don’t worry, we cover them in more detail later in this guide. 

• You’ll need proper landlord insurance (if you own the property) or commercial insurance (if you’re managing properties for others)
• Standard home insurance policies typically don’t cover you for running a short-term rental business, so you must tell your insurer what you’re doing and adjust your policy 
• If you’re running rental arbitrage or managing multiple properties, you’ll want professional indemnity insurance to protect yourself if property owners claim you’ve failed in your duties or made mistakes that cost them money
• Contents insurance is important too. Guests can accidentally damage furniture, electronics, or other items, and you’ll want cover for replacing these without eating into your profits

Good to know: Airbnb provides host liability insurance up to USD $1 million (Airbnb lists this cover in dollars, but it covers UK hosts), which covers you if you’re found legally responsible for bodily injury to guests or others, and damage or theft of property belonging to guests. This insurance also covers co-hosts and cleaners. 

Before you welcome your first guest or start managing property, you need to make sure everything is prepared. 

If you’re hosting, the property needs to be guest-ready: thoroughly cleaned, well-maintained, properly furnished, and stocked with essentials like fresh linens, towels, and basic toiletries. 

Think about what you appreciate when you stay in a hotel or holiday rental, then aim to provide that level of comfort and convenience. Here are a few other things you can do to help create a fantastic Airbnb experience:

• Take high-quality photos in good natural light, showcasing each room and highlighting special features
• Write a detailed, accurate listing that helps guests understand what they’re booking
• Set clear house rules about things like smoking, parties, check-in times, and maximum occupancy
• Find a good and reliable cleaning service that can turn the property around quickly between guests
• Line up a local handyman or contractor who can handle maintenance issues quickly 
• Set up and test out your systems before you go live. This way, you can iron out any booking, communication, or maintenance issues before guests step through the door 

The smoother your operations, the more time you’ll have to focus on growing your business.

Once everything’s in place, it’s time to go live with your listing and start welcoming guests. 

Your first few bookings are really important. You want positive reviews. So, go above and beyond for your early visitors. Respond to messages quickly, and handle any issues with care and attention. 

As you start trading, keep a close eye on:

• Your performance metrics: Airbnb rewards hosts who maintain high response rates, accept most booking requests, and earn positive reviews by giving them better visibility in search results
• Your expenses: Track these carefully and include everything from cleaning costs and supplies to mortgage interest and utility bills 
• Your pricing: Are there small improvements you could make that might justify higher rates? 
• Your experience: Could you offer additional services like airport pickups or welcome hampers? 

For now, the key is to establish solid systems and processes that can scale as your business grows.

How much money you need to start an Airbnb business depends on which model you choose and your starting point. To give you an idea, let’s break down the typical costs for a few Airbnb business models.

The spare room: £200–500
If you’re listing a spare room in your home that’s already furnished, your startup costs could be as low as £200–£500. You need to make sure the room is guest-ready, so get professional-looking photos (photographers usually charge about £100–£300 for half a day or less), and stock up on essentials like extra towels, toiletries, and perhaps a welcome basket. 

You might also want to buy a lockbox or smart lock for easy check-ins.

The full property: £3,000–£8,000
If you’re Airbnb-ing a full property, budget at least £3,000–£8,000 for furniture, appliances, kitchenware, bedding, and décor. You want your interiors to look photoshoot ready, not shabby and rundown.

You can keep costs down by shopping at reputable but low-cost retailers like IKEA, or use platforms like Facebook Marketplace or Gumtree to find second-hand furniture in good condition. Don’t forget to include costs for professional photography (expect £300–£500 for a half to full day of photography) if you’re not confident taking photos yourself.

The rental arbitrage: £3,000-£5,000 + another £3,000-£5,000
If you want to do rental arbitrage, your biggest upfront costs are the deposit and first month’s rent on the property, plus furnishing costs. 

For a typical one-bedroom flat in a mid-sized UK city, you might need £3,000–£5,000 for the deposit and first month’s rent, plus another £3,000–£5,000 for furniture and setup. 

You’ll also need the money to cover rent during the initial period whilst you’re building up bookings. Many new hosts don’t achieve high occupancy rates immediately, so having 3–6 months of rent kept in reserve is sensible.

The co-host/property manager: £500–£1,500
For co-hosting or property management, your startup costs are much lower. This is because you’re working with properties that others own. 

You might need £500–£1,500 for professional photos, marketing materials, and basic business setup costs. The main investment here is your time building relationships with property owners and establishing your reputation.

As you’ve discovered, there are several great ways to build a profitable Airbnb business without owning a property. It’s more accessible than you might think — let’s dive into these business models in more detail. 

This model involves renting a property on a traditional long-term tenancy contract, then subletting it on Airbnb for short stays. 

• Your profit comes from the difference between your monthly rent payment and what you earn from guests
• For example, if you’re paying £1,200 per month in rent and you can earn an average of £80 per night with 20 nights booked, you’re bringing in £1,600 — giving you £400 profit before other expenses
• Getting written permission from your landlord is highly important. Some landlords are actually quite open to this arrangement, especially if you can demonstrate you’re responsible and will maintain the property well 

The pros:

• You don’t need a lot of initial capital to start rental arbitrage in comparison to buying property
• There are opportunities to scale your Airbnb business relatively quickly by leasing multiple properties

The cons: 

• You’re responsible for paying rent regardless of whether you have bookings or not, which can create financial strain
• You risk losing your lease if the landlord changes their mind
• It can be challenging to find landlords who’ll agree to rental arbitrage

Managing Airbnb properties for other owners is probably the lowest–risk way to start an Airbnb business without your own property. 

• As a host business Airbnb manager or co-host, you handle the day-to-day operations of someone else’s listing in exchange for a percentage of the booking revenue
• Typically, you can expect to receive 15–30% depending on the level of service you provide

The pros:

• You don’t need a lot of capital to start this type of business because you’re not taking on debt or rental commitments
• You can build a portfolio relatively quickly once you prove yourself

The cons:

• Generally, profit margins are lower because you’re sharing revenue with property owners
• The property owner can terminate your agreement and take back control of their listing at any time
• Generally, finding reliable and long-term clients is the main challenge here

Honestly, the answer depends on several factors including how you’re using the property and how often you’re renting it out. If you’re renting out a room in your main home whilst still living there, you’ll continue paying council tax as normal. There’s no change to your responsibilities here. 

For entire properties that are rented out as short-term holiday lets, it’s a little more complex

• If your property is available for letting as holiday accommodation for at least 140 days per year, and is let for at least 70 days per year, it’s then classified as a holiday let rather than a residential property
• This means you’d pay business rates instead of council tax

Here’s where it gets interesting:

• Many small holiday lets qualify for Small Business Rate Relief. This means you pay no business rates at all if the rateable value of your property (which is an estimate of what it would cost to rent the property in a year) is below £12,000

If your property’s rateable value falls between £12,001 and £15,000, you can get a partial relief. This can work out cheaper than council tax, though you need to apply for the relief and meet the qualifying criteria. 

You can find out your property’s rateable value using the Government’s business rates valuation service.

However, if your property doesn’t meet those letting thresholds, it remains in the council tax system. 

• You’ll typically pay council tax at the normal rate for an unoccupied or second home, though this varies by council
• Some councils charge up to 100% extra on second homes
• A few councils offer discounts for furnished but unoccupied properties, though these are becoming rarer

The important thing is to be honest with your local council about what you’re doing. If you’re unsure about your specific situation, it’s worth calling your council and explaining your circumstances — they can advise on what you should be paying.

Definitely, while Airbnb provides some protection through its host liability insurance and host damage protection schemes, this doesn’t replace proper insurance. Plus, both schemes have significant exclusions.

Here’s a rundown of the different types of insurance you might want to consider, depending on your business.

If you own the property you’re hosting in:

• You’ll need specialist landlord or short-term let insurance
• Standard home insurance policies almost always exclude this cover if you’re renting out your property, even occasionally

If you’re short-term letting:

• You’ll need short-term let insurance 
• This typically covers buildings and contents insurance, public liability insurance (in case guests injure themselves), loss of income if the property becomes uninhabitable, and accidental damage caused by guests 
• Insurance policies vary depending on your property value, location, and cover level — and it’s always worth shopping around for the best deal

If you’re a co-host or property manager:

• You’ll need professional indemnity insurance 
• This protects you if a property owner claims you’ve made mistakes or been negligent in managing their property. For example: they claim your pricing strategy resulted in a lot of lost income
• You’ll also need public liability insurance
• This is essential in case guests or contractors are injured whilst you’re managing the property

Recommended for everyone:

• You should look into contents insurance, unless it’s covered by other policies
• This is because guests can accidentally damage furniture, break appliances, stain carpets, or take items
• Having your own contents insurance gives you another layer of protection and makes the claims process smoother if something does go wrong

You’ll sometimes see established Airbnb businesses advertised for sale.

This is typically when someone sells their listing along with their guest accounts, reviews, furniture, and sometimes even ongoing bookings.

It might seem tempting to buy something that’s already generating income rather than starting from scratch, but there are pros and cons to consider. Let’s take a look.

	Buying an existing Airbnb business	Starting your own Airbnb business
Pros	Immediate income from existing bookings	Complete control over property choice and location
	Established reviews and Superhost status transfer with the listing	Lower upfront costs
	Existing systems and processes are already in place	You can set everything up exactly how you want — you’re in control
	Less uncertainty — you get access to performance data	Learn the business gradually rather than being thrown in the deep end
	Supplier relationships are already established	You don’t inherit any hidden problems or bad practices
Cons	You could pay a premium price — especially if there’s established and positive reviews	It takes time to build reviews and a reputation
	You might inherit problems that aren’t immediately obvious	There will be an initial period of lower occupancy whilst establishing yourself
	The seller’s reviews and reputation don’t guarantee future success	Need to establish supplier relationships from scratch
	Location and property might not be optimal	More initial uncertainty about income potential
	Guests may leave after noticing a change in management	Steeper learning curve as you figure everything out

If you’re considering buying an existing Airbnb business, it’s worth doing thorough background checks: ask to see detailed financial records for the past 12 months, check the property’s Airbnb listing history and read all reviews carefully to spot any issues. 

Also, be realistic about the asking price. If the asking price seems very high, you might be better off starting your own business. Yes, it takes longer to build up, but you could potentially save a lot of money and you’d have complete control.

For most first-time Airbnb business owners, starting from scratch is probably the better option. You’ll learn about the industry more thoroughly, and it is possible to build a successful Airbnb business within 6–12 months if you focus on getting the fundamentals right.

When you invite paying guests into a property, you take on the legal responsibility for their safety and well-being. 

This means you must follow strict health and safety laws. If you don’t meet these requirements, you could receive significant fines or even imprisonment in serious cases — so it’s important that you take these laws seriously. 

Let’s cover the key requirements you need to know about.

• Fire alarm: Every short-term rental property must have working smoke alarms on each floor. Carbon monoxide alarms are required in any room with a solid fuel burning appliance (like a boiler or wood burner) and are strongly recommended anywhere you have gas appliances. Test all alarms before every guest checks in — it only takes a minute and could save lives

• Fire escape route: You also need to provide clear fire escape routes and make sure guests know how to get out in an emergency. This means keeping hallways and exits clear, ensuring windows can be easily opened, and providing fire safety information in your welcome pack

• Gas safety: If your property has any gas appliances, like a boiler, oven, hob, or gas fire, you must have an annual gas safety certificate issued by a Gas Safe registered engineer. This isn’t optional, and letting without a valid certificate is a criminal offence

• Electrical safety: You need to get an Electrical Installation Condition Report (EICR) at least every five years for rental properties in England, and every three years in Scotland. All electrical appliances you provide, like kettles, toasters, hairdryers, and TVs, should be regularly checked and in safe working order

• Furniture and furnishings: Any upholstered furniture, cushions, or mattresses provided must comply with the Furniture and Furnishings (Fire Safety) Regulations 1988. Check your furniture for labels to confirm they are fire safe. This includes if you buy second-hand furniture — all items must be clearly marked as fire safe

• Legionella prevention is required wherever you provide water services. For most small Airbnb properties, this simply means running taps and showers at least weekly if the property isn’t in use, keeping your hot water system above 60°C, and descaling showerheads regularly

• Accessibility: This isn’t always a legal requirement for small Airbnb businesses, but it’s worth considering. Making your property more accessible, like installing grab rails in bathrooms, opens you up to more guests and is simply the right thing to do. At a minimum, be clear and honest in your listing about any accessibility limitations, like steep stairs

Airbnb businesses can be highly profitable, but remember that your first few months will be a learning experience. 

Things will go wrong. A cleaner might not show up. A guest might leave a mediocre review. An appliance might break at the worst possible time. Or you might face unexpected maintenance issues like a water leak. 

Don’t let setbacks discourage you. Every experienced Airbnb host has been through these challenges, and the ones who succeed are those who learn from problems and double down on the guest experience during tricky times. Often, just being honest, on the ball, and providing a good level of communication is enough to show guests that you’ve got their best interests at heart.

Guests and maintenance aside, it’s a good idea to keep your Airbnb business’s finances organised from the start with a smart business current account. You’ll be able to track every expense, automate reports, and get help with your tax return.

Finally, as your Airbnb business grows, don’t be afraid to invest in improvements that’ll increase your income. Better photos, small property upgrades, or better amenities can justify higher nightly rates and attract higher-paying guests. 

Best of luck, we know you’ll be 5 stars. 

Not completely free, but you can start very cheaply. If you’re listing a spare room that’s already furnished and guest-ready, your only costs might be some fresh bedding, towels, toiletries, and time spent taking photos and creating your listing. Co-hosting someone else’s property is another low-cost option where you might need only a few hundred pounds for marketing materials and basic setup. 

Business rates for Airbnb properties depend on your property’s rateable value. Many small holiday lets qualify for Small Business Rate Relief — if your property’s rateable value is below £12,000, you’ll typically pay no business rates at all. Between £12,001–£15,000, you’ll get tapered rate relief. Above £15,000, you’ll pay the full business rate, which varies by local council — so it’s worth getting in touch with them.

In the UK, tourist hotspots like Edinburgh, Bath, York, or Cornwall generally see strong demand year–round, but they’re also highly competitive. University cities can be excellent for term-time bookings from visiting parents and academics. Business districts in major cities attract corporate travellers seeking alternatives to hotels — the key is understanding your local market and meeting underserved demand.

Choose a name that sounds trustworthy and gives some hint about what you do. Keep it simple, easy to spell, and memorable. Before settling on a name, use a company name availability checker to make sure it’s available and not already in use by another business. Also, check that suitable domain names and social media handles are available if you plan to build an online presence.