The Start-up Costs of Running an Airbnb


We bought an Airbnb about a month ago now and we’re starting to face all the expenses that comes with it. I said to Paul, the first 6 months are going to be the hardest – but once we get this thing off the ground, it’s going to be a ton of fun!

We’re now only about 2.5 months from construction being complete and being handed the keys to our new place in Olivia Beach on the Oregon Coast in Lincoln City.

If you’re thinking about doing the same thing, here are some start-up costs to consider:


The Down Payment

Why doesn’t everybody do this? Because you’re going to have to pony up 10-20% down in order to get financing from the bank for a ‘second home’. Even though Paul and I don’t techinically own a first home – this is still how the bank and the IRS see it as. If you already own a first home, this can definitely be a pain in the ass to put together and get.

We luckily had the down payment squirreled away because we couldn’t afford to buy a home in the city – which is why we bought a home dedicated as an Airbnb instead.


Mortgage Insurance

Since we opted not to put down the full 20% for our down payment, we are paying $160/month in mortgage insurance until we hit a certain threshold (around 80%) and can ask the bank to remove it. We can write this expense off against the income that the house generates.

Why didn’t we put down the full 20%? We wanted to stay a little bit liquid and not put all our eggs into this basket. We wanted an emergency fund and to have a buffer to cover those first couple months in the slow season when we’re not renting it out like crazy.

Secondly, Paul and I may still want to buy a small condo or studio in Portland – and we’re going to need the full 20% down on that one because it will be our second property.

Lastly, I’m already thinking of buying another Airbnb in a vacation rental zone in Canada and don’t want to tie all our money up in our first investment in case we decide to go for another. The airbnb in Canada require 35%!!! down because we are now considered foreign residents – even if we buy it with another Canadian resident.

Beach House

Closing Costs

Ahhhh the joys of home ownership! The first thing you get to feel are the closing costs. I think we paid somewhere around $11,000 for a home appraisal, our first year of property taxes, the mortgage title, escrow fees and all sorts of random stuff.



Our new house came up with an over the range microwave and dishwasher. We spent an additional $550 upgrading them to stainless steel models. I prefer the more polished look and I think they’ll look great in our airbnb photos as well.

We DO have to buy a stainless steel fridge and a washer and dryer which is another cost to add to our list. Luckily, our house is closing around Black Friday – so we’re hoping to score some great deals closer to the date. I’m budgeting around $1000 for a fridge and maybe $1200 for a washer/dryer – we need it to be a workhorse because of the amount of laundry it will constantly need to do.

Additionally, we are thinking of being strategic and financing our appliances for 12 months for 0% so we can spread out all of these costs. Once our beach house starts cash flowing in the summer – we’ll have a fund to draw from.

vintage antique furniture airbnb


I’m budgeting anywhere from $10,000 – $15,000 to furnish a 3-bedroom, 4-bathroom house down to every little thing like linens, towels, utensils, rugs, home decor, TVs and major furniture pieces.

Most of this stuff I’m hoping to find at Ikea, Target, World Market, HomeGoods and other inexpensive places. I know a lot of these pieces will probably have to be replaced after all that wear and tear in the next 5-6 years, so I don’t want to blow our money on too many expensive pieces that could get wrecked.

I do want the place to look great and not like where Goodwill furniture goes to die. I’m banking on that to make sure we get this place booked up and booked up first in the off-season. It’s not always about price and there’s always someone willing to pay a little more for something a little bit nicer.


Builder Upgrades + Customization

We spent some of our budget upgrading to quartz countertops, cement tile, nicer bathroom vanities, a tiled shower, glass shower doors, a farmhouse sink, a shiplap feature wall and hardwood floors. I figure the fixtures are the things that will be harder to change later on, so I wanted options that I really liked and gave the house the look I was going after.

We’re still debating on whether on not we can afford to build a backyard wood deck and a fire pit. Maybe it’s something we can add-on in year two. Here’s what our kitchen, powder room and master bathroom will look like.

Venice beach guide

Vacation Rental License

Fairly inexpensive, but just another fee to add-on to the pile. We are registering our vacation rental with the city and buying a license for $150. Additionally, we have to remit about 10.5% in state and city occupancy taxes – but we’ll bill that back to our guests.


Covering the Mortgage

The most scary part is covering our mortgage AND our rent in Portland while we work on getting the new Airbnb up and running. We close on the beach house at the start of December and then we’re giving ourselves 60 days to turn that thing into a dream Airbnb Beach House. We’ll list it starting in February and hopefully we get 1-2 bookings and maybe a few more into March Break.

It will be the slow season when we’re first starting out – which is a good thing because it will give us a chance to iron out any operational kinks. I’m also thinking of giving my friends here in Portland a discounted rate in February + March to get a few reviews up on our profile.


So that’s the latest for now! Any tips for our new Airbnb?