Airbnb is one of the most profitable investments you can take on in the US housing market, as well as internationally. But before you jump in and buy Airbnb property, there are a few things you need to consider. There’s an easy-to-follow process for Airbnb investors – check out all you need to know on how to rent on Airbnb.
Determine a Location
Location is the single most important thing to consider when renting out on Airbnb.
With Airbnb regulations tightening nationwide, finding Airbnb properties has become more difficult for real estate investors. Cities and states are imposing restrictions on non-owner occupied rentals, zoning laws, permit requirements, in addition to taxes.
Despite this, there are multiple cities where Airbnb real estate investing is legal and feasible; among these are Memphis, Columbus, Cleveland, El Paso, Houston, and Tampa. So before you get too discouraged, look into those cities.
When deciding on a location, also consider proximity to nearby amenities, proximity to the city center, access to public transportation, nearby parking, and Airbnb demand. You want to find a location that’s frequently searched for and booked on Airbnb, a touristy city, or a well-known business hub, and then find investment properties nearby.
A good location for Airbnb, and real estate investing in general, determines everything else that comes after.
Find and Analyze the Investment Property
Once you’ve decided on a location, it’s time to find an Airbnb for sale. Finding a profitable Airbnb investment property is the second bulk of your job as an investor. Analyzing property is crucial when you invest in Airbnb.
You can find investment properties using Mashvisor’s search tools. Plug in the name of the city or neighborhood in mind, and browse through hundreds of available properties for sale.
You can also use search filters such as personal budget and property type to choose the best property for your investment. Our search tool allows you to compare rental properties, price, and expected profit margin, so you can select the ideal property.
Once you’ve narrowed down your options, you can analyze different properties using our Airbnb calculator, a tool that allows you to gain access to Airbnb analytics that will help you estimate Airbnb income, Airbnb occupancy rate, CoC return, cap rate, among other information.
How to Rent on Airbnb
Let’s get to business…
Now that you have an investment property, it’s time to talk about becoming an Airbnb host. The process isn’t complicated, but because of high competition on the platform, it can be a bit difficult to achieve profits when you get started.
This is because Airbnb guests usually prefer to stay at rental properties that are “established” – meaning ones they can see reviews for and that have been up on the platform for a while. Does this mean that the first couple of months could be a bit tricky? Possibly.
Follow these steps to begin renting out your property on Airbnb:
Set Up the Rental Property
Before you go ahead and find out how to list on Airbnb, you need to do three things:
- Furnish and stock the rental property. This includes furniture, bedding, electric appliances, toiletries, and basic food items (coffee, tea, snacks, etc.).
- Take good quality photos. This one’s a crucial step. Looks aren’t everything in real life, but on Airbnb they are. When booking a property, people like to see all aspects of the property they’re staying at. Take photos of the common areas, bedrooms, bathrooms, and any other facilities at the property (pool, balcony, etc.).
- Draft an expressive description of your Airbnb rental property. Just as guests like to see photos, they also like to read thorough descriptions of Airbnb properties. Help potential guests imagine what their experience at your rental property will be like. Why should they opt for your place as opposed to the tens of other listings in the area? This is your chance to sell and market your Airbnb rental.
Set Up an Airbnb Profile
(This is the easiest step in this blog.)
Now you’re ready to list! Sign up as a host on the platform using your email, Facebook account, or Google account. List your rental property, indicate your location, add photos, and your property description. You can begin to explore features like Smart Pricing. Moreover, figure out whether you want to impose any conditions on bookings, such as a minimum stay policy. Once you’ve done that, you’re all set!
Pay Attention to Airbnb Reviews
Airbnb reviews are a feature that allows guests and hosts to rate their experience with Airbnb. Airbnb reviews are implemented to make sure hosts and guests on the platform are offering and receiving quality service.
Why are reviews so important when owning an Airbnb investment? The platform’s algorithms highly depend on reviews and your use of the platform.
If you have positive Airbnb reviews, and if you comply with the general as well as Airbnb Superhost requirements, and validate your account, you’re more likely to appear on the first few pages in your area – and those are the properties that are booked the most in a given Airbnb location. This will, in turn, help you increase your Airbnb rental income and keep your occupancy rate high.
Consider Professional Airbnb Property Management
Professional Airbnb property management offer management services to short-term rentals. That is, they could take care of all of the above for you, at a cost of course. Hiring Airbnb property management can oftentimes provide efficient service and improved guest experience, which can both generate higher revenues and increase your Airbnb profit margin.
Real estate investors usually opt for Airbnb property management companies for one of four reasons:
- They’re starting out in real estate and want to learn how to rent on Airbnb
- They manage more than one Airbnb rental property, and their to-do list is unmanageable
- They’re investing out of state
- They simply don’t have the time to manage an Airbnb
Managing an Airbnb property is more time consuming and more draining than managing long-term rentals. Often times, you’re dealing with multiple guests per week. So if you’re looking for flexibility, practicality, and access to pricing and marketing strategies, definitely consider hiring an Airbnb property management company.
Now that you know how to rent on Airbnb, start your search for an investment property with Mashvisor now.