How to Get an Airbnb Investment Property

If you’re wondering how to get an Airbnb property to start a vacation rental business, wonder no more. 

Table of Contents

1. What Is Rental Property Investing?
2. Reasons to Invest in an Airbnb Rental Property
3. How to Get an Airbnb Property in 6 Steps
4. What Comes Next After Buying an Airbnb Rental Property?
5. 3 Similar Sites Like Airbnb to List Rental Properties On
6. Wrapping It Up

In this blog, we will discuss the benefits of investing in vacation rental properties, how to get an Airbnb investment property, and other similar websites to list a vacation rental property on. 

What Is Rental Property Investing?

Investing in rental properties is one of the most common ways investors can get into real estate. It may be a lot more expensive than investing in REITs (real estate investment trusts). Still, the return on investment is also higher and more rewarding, especially if the property is in a hot market. 

For many investors, both beginner and experienced, rental property investing is a sensible way of starting a passive income source and building equity. A safe rental strategy countless investors go with is the long-term rental strategy. It provides landlords a greater sense of stability than the alternative, a vacation rental or Airbnb business. 

But what is Airbnb? To the uninitiated, Airbnb is a home-sharing platform that connects travelers to property owners for more affordable lodging and accommodation. It lets travelers worldwide save tons of money but also gives homeowners a good additional (or primary, in a lot of cases) income source. 

While both strategies come with their own pros and cons, an increasing number of real estate investors are starting a rental property business. 

Reasons to Invest in an Airbnb Rental Property

By the end of December 2021, Airbnb already counts over 12 million listings worldwide, with over 2.5 million listings in North America alone. Since its humble beginnings in 2008, the company’s gone through a lot, becoming one of the leading and recognizable brands in the hospitality industry today. 

But why do a lot of folks like Airbnb? Why are investors scrambling to get a piece of the action? Why are business-minded individuals wondering how to get an Airbnb started in their location? 

Here are some of the most common reasons why Airbnb is an investment worth looking into:

Financially Rewarding

For thousands of investors who’ve already benefited from starting Airbnb business in different locations, it is a worthwhile investment. If we take a look at some real estate market data, we will find that the Airbnb income potential is twice as much as a traditional rental. In fact, in other markets, sometimes it balloons up to three times the traditional rental income rates. 

Let’s look at real estate website Mashvisor’s latest market data for the top states with the best Airbnb monthly rental income today and how they compare to traditional rentals: 

1. Hawaii

• Monthly Airbnb Rental Income: $5,418
• Airbnb Cash on Cash Return: 4.67%
• Airbnb Cap Rate: 4.75%
• Monthly Traditional Rental Income: $2,348
• Traditional Cash on Cash Return: 1.95%
• Traditional Cap Rate: 1.98%

2. California

• Monthly Airbnb Rental Income: $5,169
• Airbnb Cash on Cash Return: 3.18%
• Airbnb Cap Rate: 3.23%
• Monthly Traditional Rental Income: $3,292
• Traditional Cash on Cash Return: 1.68%
• Traditional Cap Rate: 1.71%

3. Wyoming

• Monthly Airbnb Rental Income: $4,349
• Airbnb Cash on Cash Return: 3.49%
• Airbnb Cap Rate: 3.57%
• Monthly Traditional Rental Income: $1,803
• Traditional Cash on Cash Return: 1.16%
• Traditional Cap Rate: 1.19%

4. Maine

• Monthly Airbnb Rental Income: $4,282
• Airbnb Cash on Cash Return: 4.04%
• Airbnb Cap Rate: 4.11%
• Monthly Traditional Rental Income: $1,698
• Traditional Cash on Cash Return: 0.97%
• Traditional Cap Rate: 1.00%

5. New York

• Monthly Airbnb Rental Income: $4,270
• Airbnb Cash on Cash Return: 1.18%
• Airbnb Cap Rate: 1.20%
• Monthly Traditional Rental Income: $3,544
• Traditional Cash on Cash Return: 1.27%
• Traditional Cap Rate: 1.29%

Given the above numbers, it is clear that Airbnb rentals and other vacation rental properties listed on other sites like Airbnb offer a greater income potential than long-term rentals. 

Greater Security

Vacation rental properties listed on Airbnb are protected with AirCover. Such top-to-bottom protection includes benefits from its previous Host Guarantee of $1 million (no insurance) and the newly-introduced Host Liability Protection of the same amount (insurance).

AirCover not only comes with damage protection and liability coverage but also includes income loss protection, deep cleaning protection, and pet damage coverage. It is quite attractive to those who are seriously considering starting an Airbnb rental business since it assures hosts that Airbnb’s got their back. 

Lesser Risk

Generally, vacation rental property owners invest in places with a good tourism industry. Good tourism simply means that the location attracts constant traffic of visitors annually, whether they’re in town for business or pleasure. For instance, Florida is considered one of the hottest vacation destinations in the country and is, therefore, high up on the list of states that attract the most number of tourists.

From an investor’s point of view, it’s a no-brainer to put up Airbnb properties in the Sunshine State. On the other hand, several other states may not offer the same type of tourist attractions offered by Florida but still enjoy a thriving tourism industry. It is because of the different business conventions and seminars that they host. 

Regardless of the nature of tourism, smart investors know if a certain location offers excellent potential for Airbnb investing. It is where performing extensive due diligence is handy. Investors need to ensure that they do their research well. They can do so by gathering relevant information, accurate rental market data, and studying the latest rental comps in their chosen location. 

Ownership Perks

Being an Airbnb host comes with perks and privileges. The most notable benefit of owning an Airbnb property is the flexibility it affords owners. They can adjust their rates at any given time and manage their properties’ availability according to their calendar.

Those who are seriously wondering how to get an Airbnb rental property must be already thinking about these two benefits. If you’re still thinking about whether to invest in a short-term rental property, there’s another advantage for you. 

Portfolio Diversification

It’s not just buying rental properties but real estate investing itself that’s a good way to diversify one’s portfolio. Unlike other asset classes, like stocks and bonds, real estate isn’t correlated with the market movement; thus, it doesn’t behave in the same unpredictable way they do. Plus, generally, real estate properties appreciate over time.

Let’s look at a few examples of median property values in January 2022 versus May 2022. According to Mashvisor’s January 2022 data, the median property values for the following cities were: 

• Anaheim, CA: $1,013,642
• Baton Rouge, LA: $488,877
• Boston, MA: $1,326,424
• Miami, FL: $795,968
• Salt Lake City, UT: $593,921

However, according to Mashvisor’s May 2022 updates, the new median prices for the same cities are: 

• Anaheim, CA: $854,063
• Baton Rouge, LA: $547,925
• Boston, MA: $1,063,363
• Miami, FL: $970,317
• Salt Lake City, UT: $715,182

If you notice, median property prices in three out of the five cities we gave as an example significantly appreciated in just a few months. Certain explicable factors brought about the decrease in median property prices in Anaheim, CA, and Boston, MA. However, generally, real estate median prices typically go up. It makes investing in rental properties a huge advantage for investors. Rental property investing offers long-term growth that is more secure compared to stocks, bonds, and other asset types. 

How to Get an Airbnb Property in 6 Steps

Now, for those wondering how to get started with an Airbnb, one of the main questions to ask and answer is how to get an Airbnb property that will give an investor a good positive cash flow. 

To get that, one needs to perform extensive research and data analysis. It can either be done the traditional way (read: driving around and looking for potential rental properties) or the Mashvisor way. 

Mashvisor is a real estate website that specializes in helping investors find the right income properties for sale that align with their investment goals and criteria. The website serves thousands of users who back up its credibility as a real estate investing tool. It is the best way for investors to locate the right property for vacation rentals. 

By using the website, Mashvisor narrows down the process of how to get an Airbnb property in six simple steps:

Step 1: Know Your Financial Capability

Buying a rental property (or any real estate property for that matter) will cost you a lot of money. On top of the listing price, you also need to deal with closing costs and (if necessary) renovation and remodeling expenses. Add other related expenses, such as licensing fees, taxes, and other similar startup costs and it will surely make a dent in your finances. 

If you can buy a rental property and pay for all the related expenses in cold cash, then great. However, if you lack access to that kind of money, you will need to secure a loan or other similar financing options. 

The bottom line is that you must evaluate your financial situation first before making the decision. Your brutally honest assessment of your financial standing will either make or break your investment decision. 

Step 2: Determine Your Target Market

After assessing your finances and setting your budget, you need to figure out what type of guests you want to attract, as it will dictate the type of property you will acquire. 

Given the present global health concerns, people are adopting lots of lifestyle changes. With the easing of travel restrictions, people are taking longer vacations and road trips. Lots of travelers are also starting to book Airbnbs for longer periods instead of the pre-pandemic norm we’re accustomed to.

Then, there are those that chose a somewhat nomadic lifestyle and are always on the go; thanks in part to work-from-home arrangements embraced by the corporate world. 

That being said, it is vital to keep such trends in mind when thinking about which demographic you want to attract. More than just looking at the usual profiles (families, yuppies, business people, etc.), short-term rental investors need to be aware of growing trends to up their relevance in the market. 

Step 3: Look for a Good Location

When it comes to real estate, especially with rental properties, location makes all the difference. While there are a lot of good real estate marketplaces online, Mashvisor offers users a wider coverage of the US housing market with data from almost every market in all 50 states. 

All users need to do is log on to the site and enter their location of choice in the Property Finder tool. The tool allows users to look for properties in different markets all over the US by putting in the address, neighborhood, city, or zip code of their desired location. It will then take them to a page that shows a map of the area and investment properties listed on the MLS. 

The map, which also functions as a real estate heatmap, allows investors to sift through several potential properties that align with their goals and criteria by using different filter settings. By adjusting the filters on the window labeled Heatmap Data Set, investors can get an overview of how the different neighborhoods are performing in the market (rental income, cash on cash return rate, listing price, and Airbnb occupancy rate). 

Step 4: Perform a Thorough Data Analysis

Now comes the hard part. Once you’ve found a neighborhood of choice, it is now time to perform a thorough rental market analysis to see which properties match your goals. Doing so will help ensure that the property you get will give you good Airbnb earnings and not make you regret your decision. 

Fortunately, Mashvisor is also a reliable data analysis tool that thousands of investors trust. Using the site’s heat map and the site’s filters, you can already get a good idea of what each property can offer.

If you want to take it to the next level, you can always use the site’s investment property calculator to make highly accurate projections based on actual market data and real estate comps. It makes data analysis on multiple potentially profitable properties a lot easier, faster, and more accurate compared to doing it the old-school way. 

To learn more about how Mashvisor can help you find profitable investment properties, schedule a demo.

Step 5: Work with a Local Agent

Once you’ve narrowed down your choices to a select few, we recommend connecting with a local real estate agent who knows the actual market you’re considering. The agent can guide you through the property hunting process, answer all your questions, and give you professional advice about which property to purchase. 

Mashvisor users are also given access to a massive real estate agent directory that helps both sellers and buyers find the right professional in any town or city in the country. 

Step 6: Seal the Deal

Lastly, when you’ve already narrowed your search to that one property that meets your standards, it’s time to seal the deal and buy that property. 

What Is Airbnb Arbitrage?

Now for those wondering if it is possible to start an Airbnb business without a property, the answer is yes. It’s just a matter of knowing the right way how to get an Airbnb without owning property. Numerous people have already established a good Airbnb business without owning any physical property. Their strategy? Airbnb arbitration. 

What is Airbnb arbitration?

Arbitration is simply renting out a property and subletting them on vacation rental platforms like Airbnb, provided you have your landlord’s permission and vacation rentals are legal in your location. 

For instance, you rent out a home in Austin, TX for $2,319 a month. If you sublet that unit and have it listed on Airbnb at $258 per night, you would have already made enough to pay for your monthly rent in only nine days. Even with Austin’s current Airbnb occupancy rate of 54% (according to Mashvisor’s May 2022 data) or 16 calendar days, you would be able to pay off your monthly rent and bring an excess of a little over $1,800 to the bank. 

Is arbitration legal? Yes, it is in states where short-term rentals are permitted. But more than its legality, investors who are considering such a type of strategy should always discuss it with the property owner or landlord before having the property listed as a vacation rental. 

What Comes Next After Buying an Airbnb Rental Property?

Now that we know how to get an Airbnb property, we now need to know how to start an Airbnb business. Acquiring the property doesn’t necessarily mean that you already own an operational business. 

Before worrying about how to get an Airbnb license or what you will be charging your guests, you first need to find out the short-term rental legislation in the area you’re considering. While Airbnb’s proven to be a massive success globally, it is not entirely legal in certain jurisdictions. You need to perform an extensive background check on the location even before you purchase the property. If Airbnb is allowed in your location, you must find out what the limitations are so you don’t need to worry about any legal issues. 

Next, you also need to obtain certain legal permits and documents stipulating that you are legally allowed to operate a vacation rental business in your neighborhood. They include business permits, land use permits, and tax forms, among other things. 

Once you’ve obtained all the necessary documents, you will need to update and spruce up the property to meet Airbnb’s requirements. It includes health and safety requirements set not just by Airbnb but by the local engineering and health department. Meeting (and exceeding) Airbnb’s standards will not only increase guest confidence in your property but also make it attractive to potential guests. 

Online Listing

After securing all the necessary documents and permits and complying with the local building code requirements and health standards, the next thing to do is set prices and get the property listed on the platform. 

Once listed, Airbnb hosts should perform their duties and responsibilities set by Airbnb. Investing in an Airbnb property and running an Airbnb business will be quite a handful, and it will only be successful if you are willing to work hard round the clock. A lot of investors choose to work with a team to delegate tasks.

Others prefer to work with a property management team to operate and manage the property on their behalf. Regardless of approach, investors should always remain on top of things and not just be absentees. It will still take a level of commitment and dedication to ensure that the business is going according to plan. 

3 Similar Sites Like Airbnb to List Rental Properties On

While there are several other reputable vacation rental platforms like Airbnb, the following are three of the most notable ones:

VRBO

When it comes to vacation rental platforms, VRBO (Vacation Rentals by Owner) is the one that helped open doors for millions of vacation rental property owners worldwide. It works very similarly to Airbnb as it allows users to book short-term stays in different types of properties. Although, it is a lot stricter with shared letting and will only allow entire properties to be listed and not shared houses and rooms. 

Booking.com

Another option to get vacation properties listed is Booking.com. It came into existence about 20 years, now proving itself to be as reliable as VRBO and Airbnb. However, unlike the two platforms, Booking.com also allows users to book hotel rooms, too.

Vacasa

Tech-vacation company Vacasa is more of a vacation rental management company – similar to Evolve rental management – than it is a vacation rental marketplace. The company offers full-service rental property management, including marketing, cleaning, regular maintenance, guest screening, and document processing. It takes care of pretty much anything you can think of relating to managing a short-term rental property.

Wrapping It Up

Getting all of the above things done should answer your questions about how to get an Airbnb property and how to get started as an Airbnb host. The thing about starting an Airbnb business is that its success will largely depend on the location and the due diligence conducted. Even if you were able to buy a property in a hot market, if you failed to do your homework, it could backfire on you. The two go hand-in-hand. 

That’s why Mashvisor users already enjoy an edge when it comes to searching for the right investment property. The site allows them to not only search for properties but conduct a thorough neighborhood and property analysis, too. 

To access Mashvisor’s real estate investment tools, click here to sign up for a 7-day free trial today, followed by 15% off for life.