Financing and managing an Airbnb investment property is a great way of making money in the real estate investing business. However, this investment strategy requires time, effort and a lot of work in order to be prosperous. That is why we will present you with the professional guide to the Airbnb investment property. In the following few paragraphs, we will explore all the essential aspects of being an Airbnb host. This includes the things concerning the real estate investor himself/herself, for instance. In addition, we will mention what to do before investing as well as after the investment has been made. Are you willing to proceed with a career in short-term rentals investing? Keep on reading to find all the essential information you will need.
The Successful Airbnb Investment Property- Time
You need to be an active investor in order to own and manage a successful Airbnb investment property. Being an active investor means that you would need to put the time and effort into maintaining the rental property. In traditional real estate investing, you might lease your property and wait to receive the rental income, thus, making you a passive investor. However, being a passive investor will not get you far when investing in short-term rentals. As an Airbnb host, you would not only be buying a property and renting it out. You would actively be involved in the property management. The property management here refers to cleaning the property after each visitor. It also consists of fixing any problems and restocking the needed supplies. Moreover, the active investor would aim to provide his/her Airbnb guests with the ultimate experience. This means being friendly, available for questions, and involved in making their stay as pleasant as possible. Do not forget about the guests’ Airbnb reviews, which can either boost your Airbnb occupancy rates or bring them down.
Further, when listing the property on the real estate market of short-term rentals, you need to be creative. Besides the Airbnb reviews, your presentation is another key factor influencing the Airbnb occupancy rates. Needless to say, this requires a lot of time. Therefore, it is advisable to take this into consideration before proceeding with this investment strategy. However, property management is not everything. Below are the other important things to take in mind.
The Successful Airbnb Investment Property- Location
The location of your Airbnb investment property is vital to your success. By location, we mean not only the city but the neighborhood in which you invest. You need to take in mind that short-term and traditional investing are suitable for different areas. Airbnb rentals are prosperous in places which attract tourists as well as business travelers. The area of the real estate investment should be quiet and safe. Yet, it should be a key location, connected to public transportation and other facilities. Make sure you do a lot of research before buying a property. Speaking of analytics, here is the next point in our guide.
The Successful Airbnb Investment Property- Analytics
Doing research is the first thing you should do prior to buying a property, whether you are interested in traditional investing or financing an Airbnb investment property. Analytics help you to evaluate the real estate market, the specific area as well as the investment property you want to buy. Additionally, through analysis, you can see what is the demand in the area and if it fits with your rental strategy. Moreover, you can explore your potential target group, the potential Airbnb guests, and use this when listing the property. Listing the property and marketing it towards the rightly chosen target group brings you higher chances of success. So, before anything else, conduct your research!
The Successful Airbnb Investment Property- Budget
Every real estate investor aims to generate positive cash flow. Positive cash flow means that the money that inflows should be more than the money that outflows. Put otherwise, positive cash flow means that you need to receive higher Airbnb rental income than your monthly investment costs. For doing so, it is advisable to create a budget, including your expected Airbnb rental income and the potential monthly investment costs. Once you have everything on paper, stick with it to make a profit. Try to calculate all of your monthly investment costs in advance and keep them in mind when deciding how much to charge per night. Do not aim for the highest Airbnb rental income as this might negatively influence your Airbnb occupancy rates and leave your place vacant.
The Successful Airbnb Investment Property- Laws
As a future Airbnb host, you probably know that every state/ country has different rules and regulations for owning an Airbnb investment property. That is why it is a necessity to explore in depth the local laws and regulations. There are specific standards that may be applicable to the Airbnb investment property itself or the area in which it is situated. There are even policies concerning the Airbnb guests as well as how much time your property can be listed on the real estate market. Make sure you are consistent with all the laws, so you can operate efficiently in the business.
A bonus note for the Airbnb host is to keep in mind your competition. You are in the short-term rental market together with hotels, motels, other real estate investors, but also local people, who aim for additional income. Make sure your Airbnb reviews are always great in order to grow your business further.
Searching for the best Airbnb rentals is not a simple task, but Mashvisor is here to help you. To start looking for and analyzing the best investment properties in your city and neighborhood of choice, click here.