How Much Does It Cost to Start an Airbnb & Vacation Rental Business?
National Average
Low
$11,000
Medium
$30,000
High
$90,000
Start a short-term vacation rental business listing properties on Airbnb, VRBO, and direct booking platforms.
Time to Launch
1-3 months
Profit Margins
20-45%
Break-Even Timeline
6-18 months
Interactive Cost Calculator
Select a state below to see state-adjusted costs.
Startup Cost Calculator
Airbnb & Vacation Rental Business in Nationally
Budget:
$15,000
$8,000
$500
$500
$2,000
$600
$1,500
$800
Options
Employees:
Startup Costs
$28,900
Monthly Costs
$4,000
First Year Total
$76,900
Form Your Business
A formation service files your paperwork and acts as your registered agent so you do not have to track deadlines yourself. The state filing fee still goes straight to the state either way, on top of any service fee.
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Startup Costs by State
| State | Low | Medium | High | LLC Fee | Sales Tax |
|---|---|---|---|---|---|
| Mississippi | $8,470 | $23,100 | $69,300 | $50 | 7.0% |
| West Virginia | $8,470 | $23,100 | $69,300 | $100 | 6.0% |
| Oklahoma | $8,800 | $24,000 | $72,000 | $100 | 4.5% |
| Alabama | $8,910 | $24,300 | $72,900 | $200 | 4.0% |
| Arkansas | $8,910 | $24,300 | $72,900 | $45 | 6.5% |
| North Dakota | $9,020 | $24,600 | $73,800 | $135 | 5.0% |
| Iowa | $9,130 | $24,900 | $74,700 | $50 | 6.0% |
| Kansas | $9,130 | $24,900 | $74,700 | $160 | 6.5% |
| Missouri | $9,130 | $24,900 | $74,700 | $50 | 4.2% |
| South Dakota | $9,130 | $24,900 | $74,700 | $150 | 4.2% |
| Kentucky | $9,240 | $25,200 | $75,600 | $40 | 6.0% |
| Louisiana | $9,240 | $25,200 | $75,600 | $100 | 5.0% |
| Wyoming | $9,240 | $25,200 | $75,600 | $100 | 4.0% |
| Nebraska | $9,350 | $25,500 | $76,500 | $105 | 5.5% |
| Indiana | $9,460 | $25,800 | $77,400 | $95 | 7.0% |
| Michigan | $9,680 | $26,400 | $79,200 | $50 | 6.0% |
| Ohio | $9,680 | $26,400 | $79,200 | $99 | 5.8% |
| New Mexico | $9,900 | $27,000 | $81,000 | $50 | 4.9% |
| South Carolina | $9,900 | $27,000 | $81,000 | $110 | 6.0% |
| Wisconsin | $10,010 | $27,300 | $81,900 | $130 | 5.0% |
| Tennessee | $10,120 | $27,600 | $82,800 | $300 | 7.0% |
| Texas | $10,120 | $27,600 | $82,800 | $300 | 6.3% |
| Georgia | $10,340 | $28,200 | $84,600 | $100 | 4.0% |
| Minnesota | $10,340 | $28,200 | $84,600 | $155 | 6.9% |
| Illinois | $10,450 | $28,500 | $85,500 | $150 | 6.3% |
| Idaho | $10,560 | $28,800 | $86,400 | $100 | 6.0% |
| North Carolina | $10,560 | $28,800 | $86,400 | $125 | 4.8% |
| Pennsylvania | $10,560 | $28,800 | $86,400 | $125 | 6.0% |
| Montana | $10,670 | $29,100 | $87,300 | $35 | 0.0% |
| Utah | $11,000 | $30,000 | $90,000 | $54 | 6.1% |
| Delaware | $11,440 | $31,200 | $93,600 | $110 | 0.0% |
| Nevada | $11,550 | $31,500 | $94,500 | $425 | 6.8% |
| Virginia | $11,770 | $32,100 | $96,300 | $100 | 5.3% |
| Vermont | $11,990 | $32,700 | $98,100 | $125 | 6.0% |
| Arizona | $12,100 | $33,000 | $99,000 | $50 | 5.6% |
| Colorado | $12,100 | $33,000 | $99,000 | $50 | 2.9% |
| Florida | $12,320 | $33,600 | $100,800 | $125 | 6.0% |
| Oregon | $12,320 | $33,600 | $100,800 | $100 | 0.0% |
| Rhode Island | $12,320 | $33,600 | $100,800 | $150 | 7.0% |
| Maine | $12,540 | $34,200 | $102,600 | $175 | 5.5% |
| New Hampshire | $12,870 | $35,100 | $105,300 | $102 | 0.0% |
| Washington | $12,980 | $35,400 | $106,200 | $200 | 6.5% |
| Connecticut | $13,090 | $35,700 | $107,100 | $120 | 6.3% |
| Maryland | $13,310 | $36,300 | $108,900 | $100 | 6.0% |
| New Jersey | $13,750 | $37,500 | $112,500 | $125 | 6.6% |
| Alaska | $13,970 | $38,100 | $114,300 | $250 | 0.0% |
| New York | $15,290 | $41,700 | $125,100 | $200 | 4.0% |
| California | $16,720 | $45,600 | $136,800 | $70 | 7.3% |
| Massachusetts | $16,940 | $46,200 | $138,600 | $500 | 6.3% |
| Hawaii | $21,230 | $57,900 | $173,700 | $50 | 4.0% |
Cheapest & Most Expensive States
5 Cheapest States
- Mississippi$23,100
- West Virginia$23,100
- Oklahoma$24,000
- Alabama$24,300
- Arkansas$24,300
5 Most Expensive States
- Hawaii$57,900
- Massachusetts$46,200
- California$45,600
- New York$41,700
- Alaska$38,100
Frequently Asked Questions
Starting an Airbnb rental business typically requires a low-to-mid five-figure investment for a dedicated property, primarily covering furnishing, STR permits and insurance, photography, smart home devices, and deposits. Rental arbitrage (leasing and subletting with landlord permission) can launch for a low five-figure outlay.
Earnings vary dramatically by location. A 2-bedroom apartment in a tourist market typically earns a healthy four-figure monthly gross at strong occupancy. Rural and suburban locations earn meaningfully less per month. Use AirDNA or Mashvisor to research comparable property revenue in your target market before investing.
Rental arbitrage involves leasing a property from a landlord and subletting it short-term on Airbnb with the landlord's permission. You pay the monthly long-term rent and earn short-term rental income at a meaningful multiple of that rent on a successful unit. The spread is your profit. Startup costs are lower, but you need landlord consent — most leases prohibit subletting.
No — many cities heavily restrict or ban short-term rentals. New York City, San Francisco, and Barcelona have near-prohibitions. Most cities require permits at a low-three-figure annual fee, limit nights per year (90 days in some jurisdictions), or require owner occupancy. Always verify local STR ordinances and HOA rules before purchasing.