Airbnb Real Estate Investing – What to Consider Before Making an Investment?
Airbnb Real Estate Investing has lots of benefits for investors. It is possible to make more money from short-term property rentals, as one generally spends more money on lodging while traveling than on rent purposes. In the sharing economy of present times, Airbnb properties are getting more and more popular. The profits might appear amazing on paper. But there are quite a few things that you need to consider before you make an investment.
Obstacles
There are lots of things involved with the purchase of an Airbnb property, as you
have to also list it and make proper arrangements to welcome guests. As the
laws and rules of each city are different, you need to have a look at the local
regulations. You need to determine:
- How long you may
rent out the property? - Can you rent it
out for a specific time period without being present actually? - How long would
the property be taxed? - What are the
rules of the local homeowner’s association (if there is one)? - Is subletting of
your property allowed by your mortgage firm? - What is the
effect on your property taxes and homeowner’s insurance?
Expenses
Keep in mind that there are more expenses than it seems at the outset. Buying of the
property is only the first of the expenses associated with Airbnb property
ownership. There are other costs waiting to be factored in, such as costs of
repairs, pool service, landscaping, utility bills and cleaning services. You
have to also consider what will happen in case it is impossible for you for
some reason to rent out the property immediately or if you have a slow vacancy
period. Will you be able to afford that? What will happen if there is a decline
in home value, and whether the asking price on the rental will drop down.
Competition
The Airbnb
rental business is a competitive one. The agency claims to be operational in as
many as 65,000 cities with over 3,000,000 listings. Is that going to make your
rental any different? The success of your Airbnb property will depend on reviews from those who reside therein. You have to spend more money to actually win them
over. It includes items such as high quality bathing and bedding accessories,
buying welcome gift baskets, staging the property, shooting professional grade
photos of the property and more. You also need to invest valuable time to serve
as a good concierge.
Sign up for Rachel's BUYBNB [Online Course] class to master your airbnb investment.
For questions please email us or schedule a free 20 minute consultation inside our chat box.
*This blog was written by our freelance Rentalpreneur writer.