Although investing in short-term rentals is a fantastic opportunity, it’s not as simple as HGTV would have you believe. When buying property for an AirBnB, there are a few things you should ask yourself before you start looking for houses, choosing color schemes, or gathering interesting furnishings. especially because you won’t have Chip and Joanna to lead the way.
Not that you shouldn’t own a vacation house to list on AirBnB. It’s really a terrific thing to do because it gives you a lovely vacation house and passive income. The 4,000 square foot, five-bedroom, five-bathroom house in your sister’s neighborhood that is available for what you perceive to be an extremely low price may intrigue you. You won’t attract much attention from your intended customers if it’s an hour away from the football stadium and too far off the main route.Similar to how a nice village with the kindest residents may look like a terrific location, you’ll struggle to secure the reservations that generate your income if there’s nothing to draw tourists.
What should you think about before making an investment in a short-term rental?
In this article, I’ll give you five things to consider in deciding whether a home is good for you.
Q1: Will the AirBnB investment property be in a vacation hot spot?
You’re probably familiar with the cliché in real estate: location, location, location. If you have a short-term rental in a popular region, you may increase the likelihood that your home will be rented out most of the time. There isn’t a simple plug-and-play calculation that can tell you if the location is excellent, but there are several crucial variables to use, like professional sports teams and significant national events, to help you assess the possibilities. College towns are a fantastic place to seek for quality rental homes. As well as home game weekends for football, basketball, and any other sports for which the institution is well-known, homecoming and graduation weekends see a lot of traffic. Checking the town’s and its Chamber of Commerce’s websites to discover what events are scheduled for a certain year is another fantastic technique to assist in analyzing the possibilities of visitors. It helps to have big-name retailers like Target and Starbucks. Utilize the fact that these businesses invest millions of dollars in market research to your advantage and hunt for locations close to population centers.
Q2: Is the area short-term rental friendly for an AirBnB Investment?
Verifying that the area permits short-term rentals is another aspect of due diligence that you cannot afford to overlook. Short-term subletting of residences is not always permitted by local ordinances. Start by browsing for local houses that are currently listed on Airbnb or another site you choose. Next, look for any rules on the city website. Never hesitate to inquire by giving the city’s zoning department a call. If any licenses or permissions are required to comply with city ordinances, you can inquire with them.
Q3: Who will handle the property management of your AirBnB?
You need a property manager who can take care of the day-to-day difficulties as they crop up in order to generate as much passive revenue as you can from a short-term rental. Ideally, there won’t be many, but with high turnover tenants’ stays, you have a lot more points of contact than you would with a renter in a one-month lease. Getting a recommendation from someone you know and trust is the greatest approach to locate a reputable property management firm. If that’s not a possibility, look up property management firms on Google. Read all the reviews you can, both positive and negative. Call the business owners and get the names and phone numbers of current and former customers. As you sort through all the data, trust your instincts. Keep in mind that you will be putting your faith in this person to manage your short-term rental. Building trust with you, the homeowner, and the individuals who will be staying in your house as paying guests goes a long way on their behalf.
Q4: How much upgrading will your AirBnB investment property need?
The quicker it is to get your property ready, rented, and revenue flowing, the less work you should have to put into it. Have a predetermined price range in mind for both time and money because a less costly house typically requires more labor. Let’s assume you decide on a more pricey Austin property that is already equipped. Although it will cost more, with some focused time spent cleaning, painting, and purchasing, you might have visitors over in about a week.
Q5: How much time do you want to make use of your AirBnB investment property?
I made a deliberate decision to purchase a vacation property in a location that my family and I like visiting. We are content to visit a few times a year, whether it be for a lengthy vacation or simply a quick weekend trip. We use the property as both a holiday home and a source of passive income. Actually, scheduling days to stay there could be more difficult because you don’t want to lose any money at its busiest time. I got it. I think the majority of individuals in this scenario really struggle with it. However, you owe it to yourself and your family to truly remain and enjoy your holiday home if you like the area and the house. Additionally, while being there, you’ll get a feel of what improvements or additions may be made to the house to make it even better. Since you are familiar with the property inside and out, you will also be able to write superior property descriptions. Additionally, you may give visitors a list of your favorite local establishments (restaurants, coffee shops, parks, stores, and activities) based on first-hand experience.
Get started investing in short-term rentals!
After reading this, you might be motivated to start a short-term rental company. Maybe you’re not, though. The more hands-on aspect of short-term rentals is not to everyone’s taste. A real estate syndication investment could be a better choice for you.