One Big Global Economy
Technology and globalization have made it easier for people to connect and do business on a global scale, irrespective of physical location. The internet has changed the way we live our lives and facilitated how we operate on a daily basis. The way we conduct our lives is much easier and faster now than ever before and we are able to create our own opportunities and reach a mass audience via the help of the internet. This is exactly what Airbnb rentals are all about: connecting people together regardless of where they are in the world. Not only that, but it helped people create their own businesses and make money… lots of it.
Technology is a not a zero-sum game, and if you have yet to jump on the Airbnb business wagon, it is never too late. You can start today and build your Airbnb business slowly. Once it gains momentum and you learn the best tactics to grow it and cultivate positive Airbnb reviews, you will be making rental income in due time and even consider running Airbnb rentals as a full-time job.
So, How Does Airbnb Work?
In a nutshell, anyone can rent out their home space on the site, it could be a room or the whole unit, for few days, a week, or even longer. The beauty of this online business is that you can set your own terms and decide when to rent out your property, for how long, and who gets to stay in your home. You run your own business on the site, at your own convenience. Now, to make good profit as a real estate investor, the trick is to gain competitive advantage and keep up with the competition to cultivate Airbnb positive reviews and increase customer retention in the long term.
Guests booking Airbnb properties are overwhelmed with options, and they have high expectations in return. They are not shy to speak their mind and write a nice – or not very nice – online review. If Airbnb guests have a bad experience, they will make sure others know about it and give the Airbnb host a bad rep. However, with all this said, an Airbnb rental strategy is a pretty rewarding business, and if done right, you can make lots of rental income and even consider leaving your full-time job sooner than you can expect.
How to Turn Airbnb into a Profitable Business?
How Does Airbnb Make Money Tip #1: Building trust and credibility
If you want Airbnb guests to book your Airbnb property and keep coming back, you must build trust and credibility. Airbnb guests will be looking for verified contact information, references, and positive reviews. If you are a newbie Airbnb host, verification is especially important for you to gain momentum and attraction. Make sure to update your Airbnb profile, including your phone number, email address, Facebook profile, etc. You must give assurance that you are a trustworthy Airbnb host.
How Does Airbnb Make Money Tip #2: Providing great customer service
This one goes without saying! Be prompt in responding to all your guest reviews, the good and the bad. When you show punctuality and actually take time to respond, it makes you look good and reassures potential Airbnb guests that you care about offering the best service.
How Does Airbnb Make Money Tip #3: Home appeal is very important
Home appeal is very important on Airbnb. Guests book based on how the Airbnb property looks like on the inside and out. Do not neglect renovations and repairs, they can make all the difference.
How Does Airbnb Make Money Tip #4: Your location does matter
This is another important piece in growing your Airbnb business and maximizing your returns on investment. A good location reaps high demand and high rental income consistently. Choose to invest in growing cities that attract lots of tourists and business travellers.
How Does Airbnb Make Money Tip #5: Having a competitive pricing strategy
Having the right pricing strategy for your Airbnb rental property is of utmost importance. If you price too low, you will be missing out on the profit potential you can be earning. And if you price way above the competition, you will incur a low Airbnb occupancy rate and end up losing money. To find the best price for your Airbnb rental property, refer to real estate comps, aka, similar properties in the same location. This will give you a good idea on how to set a competitive price.
How Does Airbnb Make Money Tip #6: Honesty is the best policy
Make sure the content and the pictures you have on your Airbnb page are updated and depict the reality. If the images do not show the true state of your Airbnb rental property, you should not be surprised to receive a negative review from guests. Long story short, do not mislead your current and future Airbnb guests.
Why Are Airbnb Reviews of Guests So Important for Real Estate Investors?
When it comes to Airbnb reviews of guests, the competition is fierce, and all the Airbnb hosts try to up their game and stay competitive to increase their Airbnb occupancy rates and maximize their online exposure to potential Airbnb guests. Good hosts do not neglect to respond to guest reviews and always make sure their guests have a pleasant stay. ‘How does Airbnb make money’ depends on the the quality and quantity of guest reviews.
If you plan on growing your Airbnb business and increase your profit margins, keep in mind the following;
- Positive reviews reap higher Airbnb occupancy rates.
- Airbnb reviews generate traffic and increase your Airbnb property’s rank on the site.
- The more traffic generated, the higher the demand for your Airbnb property.
- With an increase in demand, Airbnb hosts can leverage to charge higher rent.
- Owners gain credibility with positive Airbnb reviews from their Airbnb guests.
Conclusion
To sum it up for you, an Airbnb business is quite lucrative and real estate investors can be very profitable in turn. Do not invest on a whim, however; study your business plan and strategize accordingly. Choosing a location for your Airbnb rental property is crucial. Mashvisor helps real estate investors estimate their ROI via analytics and tools, i.e., Mashvisor’s investment property calculator. Our last advice on ‘how does Airbnb make money’ is to never jump in head first without crunching the numbers and calculating the investment’s cap rate and cash on cash returns.
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