Investment Strategies Why invest in an Airbnb investment property over a traditional? by Hamza Abdul-Samad November 14, 2016January 30, 2019 by Hamza Abdul-Samad November 14, 2016January 30, 2019 Many investors wonder, what is Airbnb and why would someone decide to have an Airbnb investment property? Airbnb, in short, is a short-term rental website that allows owners and investors to display properties and allows tenants to lease them. The owners can put their property on view for interested tenants through well-taken photos, detailed descriptions, and accurate reviews from other visited guests. Airbnb is growing and thriving phenomenon, with over 2 million listings in 34,000 cities from over 191 countries. Although Airbnb has become very well-known and well-used, there are still some cons naysayers would point out. For instance, there are a lot of Airbnb fees and legal issues that an investor of a traditional property would not have to deal with. Also, traditional renting ensures more stability, because of long-term leases. Knowing all these issues, why would anyone rather have an Airbnb investment property over a traditional property? Related: Real Estate Investing: Traditional vs. Airbnb Investments You can make more money with Airbnb. Many investors have reportedly made more money through Airbnb. For example, some owners have received a 30% higher rental yield through Airbnb compared with traditional renting. Some have even used Airbnb as a business, earning six-figures. To get an idea of how much you can make off your Airbnb investment property, check out Mashvisor’s investment property calculator. A greater deal of flexibility with prices. You determine how much to charge per night. Since Airbnb investment properties are rented out on a nightly basis, you can change the price depending on the demand for that certain time period. For instance, you can raise the price during certain seasons, different holidays, and longer weekends. Contrast this with the long-term leases associated with traditional renting and you will see why Airbnb typically generates higher rental returns than traditional rents. Obviously, however, there are various factors that can influence the income you can make from your Airbnb investment property. The location, type of property, time period (as just explained), and the property’s amenities will affect the amount you can reasonably charge. Still, in general, Airbnb generates higher earnings and has more flexible price ranging compared to traditional renting. To learn how to set the price of your Airbnb property, check out Mashvisor. Related: How do I price my Airbnb property? Receiving rent is never a problem. It is pretty common for tenants of traditional properties to not be able to pay their rent on time, which in turn, is frustrating for the owner. Renters dream of guaranteed rent. With Airbnb, this dream becomes a reality. The rent a guest pays is collected by Airbnb, which is then transferred to the Airbnb host 24 hours after the guest’s check-in time. Lower likelihood of dealing with bad tenants. If there’s one thing many renters despise, it’s bad tenants. These not so good tenants can damage your property, something you definitely do not want. Normally, renters screen their prospective tenants meticulously, checking their credit and history. Airbnb does a useful form of screening for you. Airbnb provides reviews of both guests and hosts. Guests will be cognizant of the possibility of bad reviews, so they will more likely be well-behaved. This review system can be a double-edged sword, however, if you are not a suitable host. Related: Why Invest in Airbnb Properties? Financial protection from Airbnb. You will be protected with Airbnb rentals in ways you would not with traditional ones. Airbnb protects you from possible negative occurrences in two ways: through the $1 million CAD Host Guarantee and the Host Protection Insurance. The Host Guarantee protects your Airbnb investment property and your items from accidental damage. No additional cost is required from the host, as long as you are an Airbnb host, you will be backed by $1,000,000 CAD. However, do not see this as a reason to not be covered by insurance. Certain things are not covered in the guarantee, for more information, check the Host Guarantee Terms and Conditions. The second form of coverage, the Host Protection Insurance, will protect you from liability if a guest gets injured or causes property damage. This coverage is up to 1 million USD. Free advertising of your property. For traditional properties, advertising can be really challenging. Renters find all sorts of ways to advertise their unit, normally through newspapers and websites. With Airbnb, you do not have to worry about advertisement, the site advertises your property for you. Airbnb provides its hosts with a free photography service, portraying your Airbnb investment property in a very alluring and realistic fashion. That alongside the descriptions and reviews of your property give interested guests a good sense of what to expect. It’s just fun. Operating an Airbnb investment property can be a very fun experience. It’s a great opportunity to meet people from all over the world, entertaining you with different stories and enlightening you with different perspectives. You also become familiar with the hospitality service, as you take care of and prepare the property for your guests. Having an Airbnb unit can also test your creative skills in management and service. The benefits of Airbnb are not just financial; you will improve socially and creatively too. All things considered, does this mean that having an Airbnb investment property is superior to a traditional rental? No, but depending on your situation, goals, and circumstance, then one technique may be more profitable and preferable over the other. Having an Airbnb investment property can be a very lucrative investment. There are many pros to it, as we have mentioned, the core benefit being more financial gain. To assist you in your money-making endeavor, be sure to check out Mashvisor to learn more about how to create a top Airbnb rental, calculate your cash-on-cash return, identify seasonal trends, and understand your property’s performance. Related: Four Things to Consider Before Purchasing an Airbnb Investment Property Start Your Investment Property Search! START FREE TRIAL Start Your Investment Property Search! START FREE TRIAL AirbnbMarketingRental RateRental StrategiesTenantsTraditional 0 FacebookTwitterGoogle +PinterestLinkedin Hamza Abdul-Samad Hamza is a long-time writer at Mashvisor. With a focus on real estate investing tips, concepts, and top investing locations, he aims to help all aspiring investors who come across his blogs to hit the bank with their investment property. Previous Post Top 5 Sources for Your Rental Property Search Next Post How is real estate investing fun? Related Posts The Worst of the Worst Real Estate Investment Strategies Real Estate Investor’s Guide to Rehabbing Property in 9 Steps Flipping Houses in Georgia: 2022 Investor’s Guide What’s the Best Way to Invest Money in Real Estate? Where Is It Profitable to Invest Money in Order Not to Lose? When Is Buy and Hold Real Estate the Best Investment Strategy? Top Six Real Estate Investment Strategies What Are the Best Passive Income Investments in the Real Estate Market? 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