Would you like to earn an extra $10,000? On average, an Airbnb host stands to earn at least this much over the course of a year. Airbnb investment properties have quickly been rising in popularity, why not find your own property and start reaping the benefits? This type of extra income can be life-changing. Read on to learn how to profit with an Airbnb investment property.
Adding Real Estate Investments to Your Portfolio
There are many ways to add real estate to your investment portfolio. This includes anything from investing in your own home to investing in rental properties.
Rental properties can be lucrative in both long and short-term rentals. Real estate rentals can bring about significant profit but usually with significant work.
What Is an Airbnb Investment Property?
Investing in real estate has been a viable way to make passive income for some time. Take a look at this helpful article for more information on the topic.
Along comes a new company founded by a couple of guys who needed to make rent. What started out as an idea to rent a few air mattresses has turned into a billion-dollar business plan that is changing the hospitality industry. The Airbnb investment strategy was born.
Investing in Airbnb
Investing in real estate for Airbnb, or becoming a host, happens when a property, either part or all of it, is rented out on Airbnb after the purchase. Investing in real estate for Airbnb does not mean purchasing a vacation house. It means investing in a property that is needed in a certain area. This opens up the opportunity to invest in real estate for Airbnb virtually anywhere.
Investing in an Airbnb property means a move away from the traditional real estate investment strategy. Airbnb properties are quick turn-over properties. In the past, real estate properties were often rented, in the best-case scenario, long-term to trusty tenants. An Airbnb investment strategy is one that counts on easily finding guests that are interested in staying for short periods of time and cashing in on that.
Starting Off Strong
Investing in an Airbnb investment property can be overwhelming. Starting off strong can lead to a successful venture.
To begin, where is the property located? Finding a real estate agent that understands the Airbnb process will go a long way in locating a property to best meet your needs. Is the area you are looking at in high demand? Demand associated with a location can drive profit.
Researching the neighborhood is important. Are there activities within walking distance? What features of the neighborhood would bring potential guests to the area? In other words, will short-term rentals be successful in this location?
Understand travel trends that will influence the success of your Airbnb investment property. Are guests clamoring for the beach?
With the rise in popularity of Airbnb properties, laws and regulations have been passed that can limit short-term rentals. Understanding these legal issues will help you successfully launch your venture.
After locating the best neighborhood and finding properties within your budget, conduct an analysis of those Airbnb properties. This might include costs associated with the sale, insurance, start-up costs, rental rates, and occupancy rates. This information will help you make an informed decision that will lead to a successful Airbnb investment.
Become a Superhost
Once you have invested in the Airbnb property, becoming a successful host is the next step in earning a profit from the property. Customer satisfaction should be a key part of your Airbnb investment strategy. Ratings are everything.
Taking the time to rent a few successful properties for research purposes is a great way to understand what works and what could potentially cause problems.
Identify your target guest. Who is most likely to rent your property? What amenities will they need? How can you make them feel welcome and most of all, have them come back?
Appealing to a certain demographic such as a family? Highlight the play equipment and the oversized yard. Making your property pet-friendly will often help you to acquire loyal guests.
Look carefully at the design of other properties. What is successful? What makes a space stand out? Often, guests search out unique properties based on their design. What makes your property stand out? Why would a potential guest choose to stay with you rather than other properties in the area?
Becoming a certified super host takes time and energy. Airbnb has several qualifications that must be met to obtain this status.
Presenting Your Airbnb Property
Whether you are choosing to rent out a room or an entire house, you will need to complete some form of a makeover. Guests will need basic items such as a coffee pot, a mini-fridge, storage space, and good WiFi service.
If you are taking the time to invest in an Airbnb property, it might be worth adding a few extra amenities that would make your property stand out. This might include special soaps, snacks and drinks, luxurious sheets and towels, and special locally sourced products. Going beyond the basic needs of your guests will quickly boost your ratings.
A clean space can make or break a property. Guests should expect a clean bathroom, emptied trash receptacles, and fresh linens. Providing guests with cleaning supplies for small messes might will help you as the host when it is time to turn over the property. New guests should not see any signs of previous guests.
Take the time to get to know your guests and supply the personal touches needed to make their experience memorable.
When a guest looks at your property one of the main considerations is price. The importance of pricing your property within the price range of other properties in the neighborhood is a safe way of ensuring bookings.
Find comparable properties in your geographical area and research their prices. Be sure to look at several dates within the calendar to get a full view of what a property may charge throughout the year. Pay attention to specific times of the year that are in high demand.
What are your nightly costs? This might be the cost of amenities, insurance, cleaning, landscaping, and even the mortgage. Include Airbnb’s hosting fees and any utilities and subscriptions for the property. Not meeting these costs will spell failure right out of the gate.
Pricing a New Property
What type of property are you advertising? A single bedroom or an entire home? Do not forget about location and amenities. All of these factor into the price of your Airbnb investment. Be sure to highlight any special amenities in your listing if you plan on factoring them into the cost of the rental price.
A new Airbnb investment property should undercut the competition. This gives the opportunity for your new property to gain positive reviews. Once the reviews start rolling in, the price can be raised slightly. Reviews are everything in the Airbnb arena.
Finally, be sure to check the calendar for times of the year that may be in high demand. The income between peak season and off-season can vary a great deal. Offer early bird and last-minute discounts to your guests. This will ensure that your investment property is booked for as many nights as possible.
Listing the Airbnb Investment Property
The property listing is what the guest initially sees and urges them to click for further information. That initial photograph is important in catching the eye of the potential guest. Taking the time to use a professional photographer will be money well spent.
The property should be clean and uncluttered, presenting the space in the best possible light. Include any amenities that might set your property apart from the competition. Perhaps there is a patio or a fully stocked kitchen. Include these images in your listing.
Highlight the area around your property. Be sure to list any restaurants or shops that are within walking distance. Is public transit close? What about parking? A dedicated parking spot is an excellent selling point for a busy section of town.
Finally, be open about possible downsides of your property. While it is not necessary to negatively highlight aspects of the property, it is still a good idea to be truthful. An older property might have great vintage appeal to it.
Success Does Not Happen Overnight
An Airbnb investment property can be a lucrative venture. It may take time, however, for the investment strategy to prove to be successful.
An Airbnb property is based on the concept of short-term rentals. It is unlikely that a property will be rented out every night. This is especially true of a new property. With very few reviews, it may be hard to establish regular bookings. Offering lower prices will help to establish those first positive reviews.
An Airbnb property is also unlikely to be rented out every night due to turnover time and preparing the property for the next guests. There will also be inconsistencies when guests are booking, leaving gaps in your calendar.
Remember, there are upfront costs. Your Airbnb investment property is competing with numerous other properties. You will need to invest in new furnishings to be competitive. Furniture is only the beginning. A keyless entry system and a new WiFi setup will likely be necessary as well. All of this will cut into the immediate success of your property.
As your Airbnb investment property ages, you will begin to see trends that you can capitalize on and increase your profit.
When Will I See a Profit?
There is a great deal to consider when acquiring an Airbnb investment property. Upfront costs can be significant, in the form of both time and money. Is it possible to see a profit from owning an Airbnb investment property? Absolutely! Understanding the obstacles so that they can be avoided is half the journey.
Be aware that things will break and the property will need upkeep. All of this will cut your profits. Its a good idea to check into your homeowners’ policy or purchase short-term rental insurance. Both can be very helpful in lowering the costs of accidental damage.
Cleaning services and property managers also add to the cost of owning an Airbnb investment property. There are numerous professional services for hosts that may want to take the day to day chores out of their hands.
Bookings can be irregular and cancellations happen. Always take this into account when looking at your potential profit.
A significant profit is possible if your Airbnb investment strategy takes into account the area of the property. Taking the time to purchase in the hottest Airbnb markets will boost your profit making abilities. Take a look at travel trends. Understand that beach properties, for example, often bring a very high profit.
Take into account trends such as glamping or creating high-end experiences in luxury tents. Many travelers would like an unplugged experience as well. Analyzing these trends might help you find a niche in a busy travel market.
A Lucrative Source of Income
If done correctly, investing in an Airbnb investment property can be lucrative. There are several moving parts that need to be addressed. The time and effort needed to launch a successful Airbnb investment strategy is significant but certainly worth it in the long run. Finally, remember that the amount of money you make on your Airbnb investment property is largely based on your reputation as a host. Building that positive reputation will allow for your profit to grow.