Owning an Airbnb investment property can be a great way of making money in real estate. This is true when real estate investors are able to reach that “sweet spot”: a positive cash flow property. But what if a real estate investor is dealing with a low Airbnb occupancy rate? It can be a huge obstacle standing in the way of successful Airbnb real estate investing.
Whether you are a future Airbnb real estate investor trying to prep for success in every possible way (props to you) or currently the owner of an Airbnb real estate investment dealing with low occupancy rates, we can guide you to that “sweet spot.” Let us help you learn to identify the causes of low Airbnb occupancy rate and how to avoid or deal with them to achieve high Airbnb occupancy rate.
Location of the Airbnb Investment Property
Owning an Airbnb investment property already, you may be shaking your head at this point. We hate to be the bearer of bad real estate investing news, but location inherently affects the Airbnb occupancy rate. And, because the real estate market can’t be changed once you’ve bought an investment property, it’s important to know how to identify the best real estate market for Airbnb investment properties.
Not to worry: owning an Airbnb investment property in the wrong real estate market has a solution. But first, an Airbnb real estate investor has to be sure the real estate market is the cause of the low Airbnb occupancy rate.
Finding the Best Real Estate Market for High Airbnb Occupancy Rate
While the real estate market should be displaying all of the typical characteristics of the best place to invest in real estate, one major factor affects an Airbnb investment: tourism. If the real estate market sees a high volume of visitors, be they tourists or even business people, a high occupancy rate is guaranteed by the location alone. Be sure to research the kind of tourism a real estate market sees year-round before considering owning an Airbnb investment property there.
To start looking for and analyzing the best Airbnb investment properties in your city and neighborhood of choice, click here.
That’s one way to identify the best real estate market for high Airbnb occupancy rate. There is, however, an easier way for a real estate investor to go about this. That’s by using an Airbnb profit calculator (also known as an investment property calculator). An Airbnb profit calculator does just what the name implies: it ensures a real estate investor finds the best real estate market in order to make a great Airbnb profit (a high return on investment).
Use an Airbnb profit calculator to look at different real estate markets and check the Airbnb occupancy rates by city, right down to the neighborhood. You can compare different Airbnb occupancy rates by city and neighborhood to find the highest one with the best return on investment. To learn more about our Airbnb profit calculator, click here.
So, What If You’re Already Owning an Airbnb Investment in the Wrong Real Estate Market?
First, use an Airbnb profit calculator to find out if the real estate market is one of the best cities for Airbnb investment or not. At the very least, check if it has a good potential for Airbnb occupancy rate and return on investment.
If not, you have two options. Selling the Airbnb investment property might not appeal to you, but it is an option to invest in another real estate market that promises a better Airbnb occupancy rate. The second option is the better option. Change your real estate investment strategy from short term rentals to long term rentals. Use the investment property calculator to make sure that real estate investment strategy will work in the real estate market and make the change. It’s the best solution to create a positive cash flow property when owning an Airbnb investment just isn’t cutting it.
The Airbnb Investment Property Itself
Not every investment property works with an Airbnb investment strategy. Just as the choice of real estate market affects the Airbnb occupancy rate, so does the choice of investment property. Again, the best way to ensure you are buying an investment property that will bring about successful Airbnb real estate investing is to use an Airbnb profit calculator.
Once you’ve found a good real estate market that promises a high Airbnb occupancy rate, the Airbnb profit calculator can show you the best investment properties with the highest return on investment and Airbnb occupancy rate in that location.
This is really only possible with Mashvisor’s Airbnb profit calculator. That’s because it has one special real estate investing tool: The Property Finder. With the Property Finder, you can choose the Airbnb rental strategy as part of your investment property search criteria. The Property Finder will return only the most profitable real estate investments for this rental strategy. These, of course, will have a high Airbnb occupancy rate and Airbnb rental income to get the highest return on investment.
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Are You Doing Your Part to Increase Airbnb Occupancy Rate?
So, the real estate market is the “right one” and the investment property is ideal for an Airbnb rental strategy. Everything looks good on paper. So, what’s the problem? It could be some of the choices you have made after buying an investment property. Let’s take a look.
Airbnb Pricing Strategy
Trying to increase Airbnb rental income all the while ignoring the Airbnb occupancy rate will never lead to a positive cash flow property. There has to be a balance in the rent price. If you charge too much for your Airbnb investment property, your Airbnb occupancy rate will fall and so will your rental income. If you charge too little, Airbnb rental income won’t cover your rental property expenses.
The solution? Compare your price with that of others who are renting out a house on Airbnb in the same real estate market. How much are they charging for similar Airbnb investment properties? Try to set a competitive rent price that can cover your Airbnb rental property expenses as well. You can even use an Airbnb profit calculator for this comparison by looking at real estate comps.
Airbnb Listing
Read your Airbnb listing right now. Not as someone owning an Airbnb, but as an Airbnb guest. What do you think of your Airbnb listing now? Is it dull and unappealing? Advertising is a big factor in renting out a house on Airbnb. Take nice photographs and try to market your rental property in the best way. Look at popular Airbnb listings to get some ideas of what works.
Airbnb Property Management
If you’re not doing everything you can to offer the best Airbnb property management, chances are that’s why you’re dealing with a low Airbnb occupancy rate now. Airbnb property management doesn’t end with getting tenants checked in. Maintain, repair and keep the rental property clean. Think of creative ways you can make the Airbnb experience more enjoyable. Welcome baskets, a specially prepared local meal, tours, and the like can all up Airbnb occupancy rate through Airbnb reviews.
Airbnb Reviews
Keep track of Airbnb reviews. If you provided supreme Airbnb property management, try asking your Airbnb guests to leave Airbnb reviews. For any negative Airbnb reviews, try to respond. We don’t mean attack the Airbnb guests or get defensive. Instead, apologize and talk about how you have since improved your Airbnb investment property thanks to the review.
This means you won’t be replying to all Airbnb reviews. Some guests just can’t be pleased and you may want to ignore certain ones that aren’t justified.
Alternatively, consider hiring professional Airbnb property management to assist in increasing your Airbnb occupancy rate. It may cut into your Airbnb rental income, but if the professional Airbnb property management does its job and raises Airbnb occupancy rate, you’ll have plenty of Airbnb rental income that you can afford to reinvest some back into the Airbnb property management.
Low Airbnb occupancy rate can be frustrating for owners of short term rentals. Just know that every problem in real estate investing has a solution. While it’s better to avoid all problems from the get-go and choose the best real estate markets and Airbnb investment properties, you can still remedy issues as they come up. Take the time to examine all of the possible causes for low Airbnb occupancy rate listed here and take them on one by one. Soon, you’ll start enjoying a higher Airbnb occupancy rate and return on investment.
To learn about how Mashvisor can help you in your Airbnb rental property journey, schedule a demo now.