Short-term rental properties are becoming increasingly popular with real estate investors all over the world. According to recent Airbnb data from ipropertymanagement.com, there are over 6 million Airbnb listings worldwide.
And it’s clear why: Airbnb is profitable. Airbnb net profit as of Q3 2023 is $9.601 billion, a 19.57% increase year-over-year. Owning an Airbnb investment property is, therefore, a real estate investment worth considering.
But with over 150 million users on Airbnb, the short-term rental business is becoming more competitive. Airbnb investors must, therefore, improve their overall Airbnb investment strategy in order to increase their Airbnb profit margin.
Here are some tips for increasing your Airbnb profit potential today:
1. Use Mashvisor to Analyze Your Real Estate Market
Your efforts to earn a high Airbnb profit should begin even before you think of purchasing a rental property. But if you didn’t perform neighborhood analysis properly at the time, it might be the case that you purchased an investment property in a neighborhood that is no good for the Airbnb rental strategy.
So step 1 to increasing your Airbnb profit is finding out: Did I invest in one of the best places for Airbnb? You can use Mashvisor’s Heatmap Analysis Tool to figure this out. Enter your neighborhood and check out the Airbnb analytics.
What is the average Airbnb rental income for the area? Is the Airbnb occupancy rate good? How will you know? Well, with this real estate investment tool, you can select the filters specific to Airbnb – if your neighborhood is highlighted in green, then you have made a good choice for location and that means you will benefit from applying the following 8 tips to increase Airbnb profit.
But what if the location is bad? Then you have two options:
- Cut your losses and sell the investment property. You can then use Mashvisor’s Heatmap Analysis Tool to find a better neighborhood for Airbnb real estate investing.
- Change things up- switch to a traditional, long-term rental strategy if Mashvisor’s data shows that is more profitable.
2. Adjust Your Pricing According to Season
One of the best things about short-term rentals is that you can change your pricing strategy on a daily basis. There are numerous pricing tools out there that you can use to set different prices for each night. During the high season, you can increase your rental rate in order to earn more revenue.
On the other hand, you can lower your rates in the low season in order to attract travelers and beat the competition. However, remember to factor in Airbnb fees and Airbnb taxes when setting your prices. You can use an Airbnb profit calculator and Airbnb comps to figure out what the right rental rate is for your location.
3. Make Your Amenities Stand Out
In order to increase your Airbnb profit, your rental property should offer better and more amenities than the local competition. Take time to research and understand your typical guests. Do they spend most of their time in the rental home, or do they leave early and return late? Are they singles or families? Are they business travelers or tourists?
Having answers to all these questions will give you an idea of what amenities and furniture would suit your frequent guests. For example, business travelers would appreciate high-speed Wi-Fi and a coffee machine. Meeting the specific needs of your guests will prompt positive Airbnb reviews and enhance the chances of them coming back again and you making more money.
4. Sell the Local Experience
Most Airbnb guests are not just looking for a place to stay. They want to experience all that the local destination has to offer including parks, shopping, food, and other attractions.
Therefore, your Airbnb listing should market a unique experience to your visitors. Show them that you have an in-depth understanding of the area where your rental property is located. Remember to include quality photos of your location in the listing. This will attract more guests and boost your Airbnb host profit.
Related: 15 Best Vacation Rental Tips for Owners
5. Promote Your Airbnb Rental Property
Having a great Airbnb listing is not enough. To boost your Airbnb cash flow, you need to promote your rental via advertising. This could be through social media platforms such as Facebook, Instagram, and Twitter, or paid website ads.
You should also consider offline advertising on newspapers, radio, flyers, and even word-of-mouth promotion. By advertising your rental property online and offline, you won’t have to solely rely on your Airbnb rankings and Airbnb reviews in order to boost Airbnb profit.
6. Become an Airbnb Superhost
Being an Airbnb Superhost is one of the best ways of standing out from the competition and increasing your Airbnb profit. Superhosts are seasoned hosts that provide an extraordinary experience for their visitors. When one attains Superhost status, he/she can be identified using a badge that will appear on the profile and listing.
Here are some of the terms and conditions for becoming a Superhost:
- Having a 90% response rate
- Maintaining a 50% review rate
- Completing at least 3 reservations or 10 trips with a total of 100 nights
- Maintaining a 4.8 overall rating
- Having no cancellations apart from emergency situations
A comprehensive list of terms and conditions can be found on the Airbnb site. The Superhost badge will show potential guests that you are trustworthy and could boost your Airbnb occupancy rate and Airbnb profit significantly.
7. Stay in Touch With Previous Guests
Since you have the contact details of former visitors, it would be advisable to communicate with them once in a while. Sending a newsletter, holiday card or birthday card will show that you are still thinking about them.
As a result, when they are planning their next vacation, they might just remember you and decide to make a return visit. Retaining past visitors is more cost-effective and easier than attracting new ones.
8. Prepare Your Airbnb Rental Property for the Season
Some of the most popular times for traveling worldwide are New Year, Christmas, and Thanksgiving. Such seasons attract both foreign and domestic visitors. Since people like to decorate their homes as they celebrate the season, make an effort to decorate your Airbnb rental property for the holidays.
For only a few dollars, you can purchase decorative pieces that you can use for years. Take photos of your decorated rental and update your listing several weeks before the holidays. This will increase your occupancy rate and Airbnb profit in the peak season.
9. Hire a Professional Airbnb Property Manager
If you own multiple vacation homes, it might be difficult to keep up with all the guest requests, phone calls, and emails. The same challenge applies if your investment property is located out of state. In these situations, you should consider hiring a property manager to take care of the day to day running of the business.
A professional Airbnb property management company will not only maintain the investment property but also ensure that it generates a high Airbnb profit.
To ensure you are making more money with Airbnb, it’s best to start following these 9 tips right now. Start with the most crucial tip: Use Mashvisor to analyze your real estate market.
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