It’s no secret that real estate provides many great opportunities for earning passive income. Having a rental property (or even a spare room) means potentially huge earning potential, which leaves many homeowners wondering about Airbnb vs VRBO for owners — which is the best way to earn cash using extra space in your home?
What many homeowners don’t realize is that vacation rentals and short-term stays aren’t your only option for turning a spare bedroom or finished basement into a passive income stream. In this article, we’ll compare Airbnb and VRBO, two of the most popular platforms for renting out homes and extra rooms. But we’ll also introduce Neighbor — yet another way to turn extra space into income (while giving a hand to others in your own community!).
Airbnb vs VRBO vs Neighbor: An Overview
Airbnb, VRBO, and Neighbor: What are they, and what do they do?
All three are online rental platforms, but with some key differences.
Airbnb was founded in 2008 as an alternative to traditional hotel accommodations. It allows people to rent out spare spaces for others to stay in while they’re traveling, and since it launched, has expanded to include 5.6 million listings in more than 200 countries that range from rustic cabins to luxurious estates. While Airbnb is meant for short-term rentals, the platform now often comes with discounts for longer stays.
VRBO is very similar. Founded in 1995 as “Vacation Rental By Owner,” VRBO is now owned by Expedia Group and offers vacation homes for rent in popular destinations as an alternative to hotels. VRBO boasts more than 2 million listings in 190 countries, but they tend to lean more toward traditional single-family homes, while Airbnb offers a wide range of home types and experiences.
And then there’s Neighbor. Neighbor is a peer-to-peer platform that matches community members with extra space in their homes with their neighbors who are seeking safe, secure storage for their belongings. The process is similar — you’re still renting out all or a portion of your home. But instead of hosting people, you host whatever they need to store. Depending on the space you have available, you can use Neighbor to store anything from boxes to vehicles.
Airbnb vs VRBO vs Neighbor: Property Types
Airbnb has really embraced unique listings that offer guests an experience as well as a place to stay. On the platform, you can filter available Airbnbs to search for camping, glamping, houseboats, yurts, cabins, high-rise apartments, treehouses, tiny homes, pools, views, and more. On Airbnb, hosts aren’t required to list their entire home — they can offer just a private room (or even a shared room) depending on the space they have available. In recent years, hotel rooms have become commonly listed on Airbnb, too.
VRBO, on the other hand, is a more traditional vacation rental site. The homes you’ll find there tend to be geared toward families on vacation, with single-family homes in top tourist locations dominating the listings. Shared spaces aren’t as common on VRBO, where guests typically book the entire place rather than just a room. Houses and condos are the most common types of properties you’ll see.
Neighbor is a little bit different. You can list anything from a closet, basement, or spare room to a garage, driveway, or parking spot on Neighbor. Renters choose the type of space they want to rent based on what they need to store, with options for protection from the elements, climate control, regular access to the space, and more.
Airbnb vs VRBO vs Neighbor: Costs, Fees, and Financials
No matter which platform you choose for listing your space, the goal is to earn money. That means the costs, fees, and income potential are some of the most important factors to consider when comparing Airbnb, VRBO, and Neighbor.
Let’s compare all three platforms in a few key areas: startup costs, fees, insurance and host protection, and earning potential.
Airbnb, VRBO, and Neighbor all require having a rental home or rentable space, which means startup costs can be high for all three. But these three platforms are not all equal.
Airbnb and VRBO both require a furnished space with amenities that make it habitable — climate control, electricity, plumbing, etc. If you’re starting with an unfinished space or an unfurnished room, startup costs will be higher.
With Neighbor, just about any space can be listed and rented. An unfinished basement, a spare bedroom with no furniture, even a closet! Indoor, climate-controlled spaces are generally better for storing personal belongings, but an outdoor space can be rented to store sporting equipment or a vehicle. On Neighbor, you can even rent a driveway or parking spot. Because Neighbor allows you to take advantage of whatever spare space you have, the platform has significantly lower startup costs than Airbnb or VRBO.
Neighbor, VRBO, and Airbnb hosts are all required to pay fees to their chosen platform. These fees help cover costs associated with running the platform, collecting payment, and providing insurance and protection for both hosts and renters. However, to maximize the profit you can earn by renting out your space, it can help to choose a platform with a fee structure that will most benefit you.
When comparing platforms, there are a few fees to watch for.
|Service fees||Credit card fees|
|What they are||Service fees are the commissions taken from the booking fee by the booking platform, usually as a percentage of the booking subtotal.||Some platforms charge a separate fee in addition to the service fee to cover credit card processing.|
|Airbnb||Total service fees for Airbnb listings can vary, but typically amount to 14-16% of the booking subtotal.
Airbnb fees come in two forms: split fees and host-only fees.
With split fees, the service fees are split between the guest and the host. Typically, this model means the guest will absorb most of the cost of the service fees.
Host-only fees mean that the host pays for all service fees. Hotels that list their rooms on Airbnb must choose this option and pay all the service fees.
|Airbnb hosts are not charged a separate credit card processing fee.|
|VRBO||VRBO automatically splits its service fees between guests and hosts. Guests typically pay between 6-12% of their booking subtotal in fees to the platform.
For hosts, VRBO charges fees in two different ways: An annual subscription model that costs $499 per year and covers all fees for all bookings, or a 5% fee per listing.
|VRBO charges an additional credit card fee of 3% of the booking subtotal.|
|Neighbor||Neighbor charges service fees of just 4.9% of your monthly rent payouts, plus $0.30 per booking for processing. These fees are automatically deducted from your monthly rent payout.||Neighbor hosts are not charged a separate credit card processing fee.|
While Airbnb gives hosts the option to shift the majority of the service fee to renters, lowering their own fees to around 3%, this can result in a poorer guest experience, due to surprise fees at booking. VRBO charges a service fee that’s comparable to Neighbor, but also charges hosts a separate credit card processing fee. That means Neighbor has the lowest fees out of all three platforms.
Insurance and Host Protection
When renting out space on your property, one of the most important things to consider is how well you’ll be protected in the event that anything goes wrong.
|Airbnb||Airbnb offers AirCover for Hosts, with $1 million in coverage in case a guest is injured, property is damaged, or belongings are stolen.||Depending on location, amenities, and timing of a stay, Airbnb or the host might require a security deposit. These range from $100-$5,000 and may require an authorization hold on your payment method.|
|VRBO||VRBO’s $1 million liability insurance covers hosts in the event of traveler injury or property damage claims made against them.||Hosts can choose to charge a refundable damage deposit, which is returned to renters after 14 days if no claim is filed.|
|Neighbor||Neighbor’s Host Guarantee offers up to $1 million in liability coverage for every host.||Neighbor hosts aren’t encouraged to collect security deposits. Neighbor handles all payments and guarantees your payout at the end of the rental period or monthly, for long-term rentals.|
All three platforms offer liability coverage for hosts up to $1 million. While it’s important to read all the fine print and understand the details of exactly what each policy covers, hosts can rest assured that Airbnb, VRBO, and Neighbor all have a vested interest in protecting property owners and renters.
One of the trickiest things for hosts who rent out space is finding the right monthly, weekly, or nightly rate to make their listing attractive enough to maximize occupancy, while also maximizing their profits. It’s a delicate balance that will vary a lot based on the type of home, location, amenities, and other factors. For example, vacation rentals with luxury amenities or locations in expensive, sought-after tourist markets are likely to generate more income than more basic homes in cities or towns that don’t welcome as many visitors. And earning potential for Neighbor listings can vary based on location, whether the storage is climate controlled, how much space is available, and even the time of year.
On Airbnb, VRBO, and Neighbor, hosts can set a lot of their own fees. Here’s a rundown of some of your options for profiting off your space.
|Booking fees||Cleaning fees||Guest service fees|
|What they are||Booking fees are the price for the listing, typically charged by the day, week, or month. These make up the bulk of hosts’ profits when renting out space.||Cleaning fees can be added by the host as an additional, once-per-booking fee to help cover the cost of cleaning the space between renters.||Guest service fees can be added by hosts for additional circumstances. These can include pet fees, laundry, extra cleaning, and other services.|
|Airbnb||Hosts set their own booking fees.||Hosts can set a cleaning fee to help offset their costs, but there’s the risk that guests will consider it a hidden fee at checkout.||Hosts can add customized service fees depending on their space and what’s allowed, but there’s the risk that guests will consider these to be hidden fees at checkout.|
|VRBO||Hosts set their own booking fees.||Hosts can set a cleaning fee to help offset their costs, but there’s the risk that guests will consider it a hidden fee at checkout.||Hosts can add customized service fees depending on their space and what’s allowed, but there’s the risk that guests will consider these to be hidden fees at checkout.|
|Neighbor||Hosts set their own booking fees.||Cleaning fees are not necessary for Neighbor spaces, since renters do not live, work, or stay in the space.||Neighbor hosts don’t have to offer extra services (or set fees for them), since renters do not live, work, or stay in the space.|
Another factor to consider is the ratio of profit to effort required. Airbnb and VRBO are pretty labor intensive income streams, as we’ll discuss in more detail in the next section. Neighbor, on the other hand, can be much more hands-off for hosts.
Winner: Dependent on too many outside factors (location, amenities, amount of space, etc.) to say.
Airbnb vs VRBO vs Neighbor: Host Responsibilities
Platforms like Airbnb, VRBO, and Neighbor are often touted for their passive income earning potential. But how passive are they, really? In this section, we’ll break down the responsibilities hosts take on when listing their space on each platform.
Creating and Maintaining the Listing
Property listings for short-term rentals can take significant time to create. On Airbnb and VRBO, you have to be sure to include high-quality photos of every part of the space, a detailed and accurate list of amenities, house rules, directions, and more. Inaccuracies, especially when it comes to the amenities offered in your space, can result in dissatisfied guests who ask for refunds, or penalties from the listing platform — both can eat into your bottom line.
Creating a listing on Neighbor is much more straight-forward. The most successful listings have some high-quality, detailed photos. Beyond that, setting up and maintaining your listing is as easy as filling in the size, access details, location, features, and price. You can add more details about the space in the description, but most information is ready for you to select from a list of features.
Airbnb, VRBO, and Neighbor all make it pretty fast and easy to accept bookings, with instant booking options available.
Check-in, Guest Services, and Check-out
Many spaces listed on Airbnb and VRBO require hosts to assist with check-in and check-out. Additionally, hosts might need to be available during renters’ stays to provide services, answer questions, and deal with any problems that arise. The process of hosting visitors on your property can be so labor-intensive, many professional hosts hire property managers to help them. This cuts down on the work involved, but significantly eats into the profits they make from bookings.
On Neighbor, hosts are rarely, if ever, required to be available on a day-to-day basis. You can set access rules for your space, arranging check-in and check-out times that are convenient for your schedule and asking renters to make an appointment with you whenever they need to access the space.
Cleaning and Maintenance
Keeping a clean, safe, and well-maintained space is absolutely crucial, whether you list your space on Airbnb, VRBO, Neighbor, or any other platform.
When renting out a living space to visitors, turnover can be as frequent as every night. This means cleaning and maintenance are regular, frequent, ongoing work.
Renting a space on Neighbor typically means less turnover. While some renters are looking for short-term storage, many users store their belongings for months at a time. That means less frequent cleaning. It’s also often easier to clean out a storage area between renters — no washing linens or cleaning kitchens and bathrooms is required. Sweeping and dusting can be all it takes to have your space ready for the next renter.
One more factor that can impact profitability and the effort required to keep your space booked is your cancellation and refund policy. Airbnb and VRBO allow users to set their own cancellation policies, while Neighbor offers different refund amounts based on how close to the booking date a cancellation is made.
Airbnb cancellation policies
Airbnb offers hosts 6 different cancellation policies to choose from. Service fees may be higher for hosts with stricter cancellation policies.
|Flexible||100% refund if canceled at least 24 hours before check-in. 50% refund, minus the first night and service fee, if canceled within 24 hours, but before check in.|
|Moderate||100% refund if canceled at least 5 days before check-in. 50% refund, minus the first night and service fee, if canceled within 5 days, but before check in.|
|Firm||100% refund if canceled at least 30 days before check-in or within 48 hours of booking. 50% refund if canceled at least 7 days before check-in.|
|Strict||Free cancellation within 48 hours of booking, if at least 14 days before check-in. 50% refund, minus the service fee, if canceled at least 7 days before check-in. No refund if canceled within 7 days of check-in.|
|Super Strict 30 Days||50% refund, minus service fee, if canceled at least 30 days before check-in. No refund if canceled within 30 days of check-in.|
|Super Strict 60 Days||50% refund, minus service fee, if canceled at least 60 days before check-in. No refund if canceled within 60 days of check-in.|
VRBO cancellation policies
VRBO offers a number of preset cancellation policies, but also allows hosts to create their own customized policies. Common preset policies include:
|60-Day Policy||100% refund if canceled at least 60 days before check-in.|
|60/30-Day Policy||100% refund if canceled at least 60 days before check-in. 50% refund, minus service fees, if canceled at least 30 days before check-in.|
|30/14-Day Policy||100% refund if canceled at least 30 days before check-in. 50% refund, minus service fees, if canceled at least 14 days before check-in.|
|14/7-Day Policy||100% refund if canceled at least 14 days before check-in. 50% refund, minus service fees, if canceled at least 7 days before check-in.|
Neighbor cancellation policies
Neighbor offers a moderate cancellation policy that allows renters to change their plans, but protects hosts from lost income from last-minute cancellations.
|Time of cancellation||Booking fee refund||Service fee refund|
|Less than 24 hours after approval||100%||100%|
|4+ days before start date||100%||100%|
|0-3 days before start date||80%||0%|
|After start date||No refunds||No refunds|
The Bottom Line: Neighbor vs Airbnb vs VRBO for Owners, and Which is Right for You?
Turning your vacation home, spare bedroom, or extra storage space into a thriving rental business is no small undertaking. As you can see from this article, even just choosing a platform to list your space on requires careful consideration of a lot of pros and cons.
Every home and space is different. Since location, amenities, seasonality, and so many other factors can have a huge influence on your space’s earning potential, we can’t say that one platform is the right choice for everyone. What we can say is that Neighbor allows you to turn just about any extra space into an income stream, with little-to-no startup costs and almost no ongoing effort. It’s a passive income stream that’s truly passive.
Listing on Neighbor allows you to earn extra income. But it also creates connections between neighbors. It allows you to provide a needed service to another member of your community. When neighbors come together like that, everyone wins.