What It Takes to Master Airbnb Accounting and Bookkeeping

In This Article

Running a short-term rental (STR) business on Airbnb can be incredibly rewarding, but it also comes with financial responsibilities that can make or break your success. We all love making money, but we tend to shy away from the part where we see how much we spend. 

Accurate accounting and meticulous bookkeeping are vital to maintaining a profitable rental operation, and STRs are even more scrutinized than typical rentals. 

Why Accounting Matters for Airbnb Hosts

I remember when I bought my first STR and realized I underestimated a few things: 

• Home Depot and Lowe’s were going to know me by name.
• My Amazon cart would never be empty.
• Bookkeeping and banking are critical.

Failing to track income, expenses, and tax obligations properly can lead to serious financial headaches later. This is why it’s crucial to establish good accounting habits from closing day and beyond.

Accounting in the context of Airbnb hosting isn’t just about keeping tabs on income—it’s about creating a detailed financial picture that helps you see how profitable your property is, which expenses can be reduced, and where opportunities for growth lie. By staying on top of your numbers, you’ll also be well prepared for tax season and avoid surprises from our dear friend the IRS. 

The Importance of a Dedicated Rental Business Bank Account

One of the best pieces of advice for Airbnb hosts is to separate personal and rental business finances. Your weekly visit to Cava (maybe it’s just me) shouldn’t appear on your business bank statement unless it involves a business meeting. 

You also are missing out on critical expense deductions if you are buying STR supplies on your personal cards. Opening a dedicated bank account for your short-term rental business makes it easier to track income and expenses without mixing them with personal transactions. 

Here’s where a solution like a Baselane landlord banking account comes in. Baselane provides a rental-specific banking platform that allows hosts to open free checking and savings accounts specifically designed for landlords and property managers. This simplifies financial tracking, connects directly to Airbnb to ensure your business finances are distinct, and helps you stay organized without needing multiple spreadsheets or manual calculations. 

Automate Tracking Income and Expenses

A huge part of Airbnb’s accounting is accurately recording income and expenses. Every booking through Airbnb results in revenue (which we love) that you’ll need to track, but what about the various expenses that come with managing a property?

Common expenses you need to account for include:

• Mortgage payments
• Property taxes
• Insurance premiums
• Cava business meetings (dang, just me again)
• Utility bills (electricity, water, internet)
• Cleaning and maintenance fees
• Furnishing and decor
• Property management fees (if you outsource tasks)

While you can manually track these expenses, using banking and financial management tools makes the process far more efficient. Baselane’s platform offers automated expense categorization, transaction tracking, and financial reporting—so you always know where your money is going.

The Power of Technology: Automated Accounting

When it comes to accounting software, most Airbnb hosts may initially think of generic solutions like QuickBooks or Xero. However, having a platform specifically built for short-term rental owners that provides tools catering to your unique needs is far from generic. 

Features to look for:

• Automatic expense categorization: Every expense can be categorized based on type (maintenance, utilities, management fees, etc.), making tax season far less stressful.
• Customizable financial reports: The platform offers detailed income and expense reports, giving you a clear snapshot of your rental business’s financial health.
• Automated rent collection: While the platform is primarily used by long-term landlords, Airbnb hosts managing longer-term stays can also automate rent collection through it.

By leveraging these features, hosts can save time and ensure their accounting is always up-to-date. 

Taxes: What Airbnb Hosts Need to Know

It is time for a visit from our dear old friend the IRS again. Taxes are often one of the most daunting aspects of Airbnb hosting, especially for those unfamiliar with short-term rental tax obligations. Airbnb income is taxable, and hosts need to know the different taxes they might owe, including federal income tax, state income tax, self-employment tax, and even local occupancy taxes, which vary by location.

It’s essential to keep accurate records of your Airbnb income and all deductible expenses to minimize your tax liability. Deductible expenses can include:

• Mortgage interest
• Repairs and maintenance
• Utilities
• Cleaning and laundry services
• Supplies (toiletries, welcome packages, etc.)
• Property depreciation

Using automated bookkeeping tools ensures all these deductible expenses are properly categorized. This helps you save on taxes by easily pulling reports when needed. Nothing is worse than March rolling around and you realize you have to categorize a number of expenses higher than you can possibly count. 

Understanding Deductible Expenses and Depreciation

As a host, you can deduct a wide range of expenses related to your rental property, significantly reducing your taxable income. Common deductions include repairs, utilities, insurance, and depreciation.

Depreciation refers to the gradual loss of value of your rental property over time. While it doesn’t represent an actual out-of-pocket expense, the IRS allows you to claim depreciation on your rental property to offset taxable income. By depreciating the value of your property each year, you can reduce your overall tax burden.

Your head should be spinning by now, but it should help you understand that you need an STR investor-friendly accountant—and BiggerPockets has the perfect CPA Finder to help.

Tips for Staying Organized

For Airbnb hosts, staying organized is crucial for long-term success. Baselane offers hosts the following best practices to ensure their rental business runs smoothly:

• Keep digital receipts: Take photos or scan physical receipts, and store them digitally for easy access.
• Regularly review transactions: Use Baselane’s automated tracking, but still review your finances monthly to catch any discrepancies.
• Separate personal and business finances: Avoid combining personal and business expenses to keep clear records.

Final Thoughts

Managing the financial side of an Airbnb business can feel overwhelming, but with the right tools, it doesn’t have to be. Baselane rental property accounting software is the ideal platform for an Airbnb host looking to streamline their banking, automate bookkeeping, and simplify accounting. By leveraging rental-specific banking features and accounting tools, hosts can focus on what matters most: running a successful, profitable short-term rental business.

Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.