Investing in real estate is a great move and one of the best ways to do so these days is to buy a property to rent out on Airbnb. Before you go out and read the reviews of mortgage lenders on Top Researched, you should understand what you need to have in an Airbnb property. Many Airbnb investors fail because they make some big mistakes when they buy a property.
There are a lot of factors that go into finding the ideal location for investing since the factors that make it ideal are different from buying rental properties. It isn’t complicated but it does require some knowledge before you buy. In this article, we will go over what you need to look for in an Airbnb property.
1 – Understanding the location
Everybody knows that location is the most important factor when it comes to buying real estate. What makes a location ideal, however? The ideal location for an Airbnb property means that you have to have a lot of people coming and going and only need to stay a short term.
This means that the area should be close to some tourist infrastructure. Those that live in a city or area where there are lots of tourists will have a lot of success. It doesn’t matter what type of tourism, as long as there are people coming to visit. You don’t necessarily have to be within walking distance of the major sights, but you do need to have certain things around.
For instance, being close to public transportation, restaurants, coffee shops, and stores is very important. If there are no tourists, then there should be business travelers so look for things like convention centers.
2 – Pick the right property type
Every type of traveler has different needs and the property should be suitable for them. This means that you have to choose the type of property wisely otherwise you risk not getting enough bookings.
The first thing to do is to evaluate who the tourists are that are coming to the area. Are they backpackers? Are they young couples? Or, could they be mainly families? As you can see, the needs of these groups will be different.
Make sure to have a small studio for budget travelers like backpackers, but a house or large condo for families.
3 – Find the right price point
The next phase of the research needs to focus on what people are paying for a night in a typical Airbnb property. Take a look at the prices for what is out there and then compare it to what your property is. Make an average of the price of the same properties and this should be your base price for a night.
Calculate how much you think you could make per month by seeing how full the other properties are. Then subtract all of the expenses you will face such as a mortgage, taxes, insurance, and Airbnb fees. What’s left is your profit.
