To succeed with Airbnb short-term rentals, property investors need to keep an eye on their Airbnb occupancy rate because it determines the rental income and return on investment. Thus, while Airbnb short-term rentals are increasing in popularity as an investment strategy to make money from real estate investing, not all Airbnb hosts get good returns on their investment. If you’re dealing with low Airbnb occupancy rate, keep reading as we explain possible reasons for this. Also, we provide 4 solutions to help you achieve high Airbnb occupancy rate.
Invest in the Right Location
The first and main reason why some Airbnb hosts struggle with low Airbnb occupancy rate is due to the fact that there is no demand for this rental strategy in the first place! In the real estate market, property investors can rent out their investment properties either as traditional long-term rentals or Airbnb short-term rentals. The optimal rental strategy depends on the location!
Some locations are profitable for investing in long-term investment properties while others for short-term rentals. So, the first thing that property investors must do to assure high Airbnb occupancy rate is finding the right location with high demand for Airbnb rentals. Generally, the best places for Airbnb investments are tourists’ destinations, seeing as tourists are the main tenants of short-term rentals.
Mashvisor provides property investors with real estate data and analytics on both traditional and Airbnb investments. Using real estate investing tools, such as the Heat Map, any real estate investor can find the best locations for his/her rental strategy of choice. So, if you’re looking for high Airbnb occupancy rate, the Heat Map will highlight areas are hot or cold for this feature. This makes it a whole lot easier to compare the Airbnb occupancy rate in different locations to identify the one with the highest profitability for real estate investing.
The Investment Property Itself
Another thing to keep in mind to achieve high Airbnb occupancy rate before buying an investment property is the property itself. Not all property types work as Airbnb rentals. Successful property investors conduct an investment property analysis to evaluate the property’s profitability as a traditional rental vs. an Airbnb rental. To do so, make sure you use Mashvisor’s Rental Property Calculator!
This real estate investing tool allows a real estate investor to calculate the different values related to a rental property to determine the optimal rental strategy. These values include the traditional and Airbnb cap rate, traditional and Airbnb cash on cash return, and traditional and Airbnb rental income (for the same investment property!). This will help with your investment property analysis to assure it’ll bring a good return on investment as an Airbnb rental.
Moreover, to boost your Airbnb occupancy rate, you need to take into consideration several things. First of all, make sure that you furnish the rental property and that it gives a home-like feeling. Moreover, Airbnb hosts need to equip the place with all the necessities – a washer and dryer, a coffee machine, a stove, a microwave, a fridge, and everything you think guests will need. Overall, the Airbnb rental has to be in a perfect condition – clean and without any problems that need fixing.
Advertising Your Airbnb Listing
Say that you took the above factors into account before buying an investment property, but you’re still facing low Airbnb occupancy rate. What might be the reason now? Well, it could be that you’re not advertising your Airbnb rental. There is no doubt that the short-term rental market is a competitive one. Thus, Airbnb hosts need to optimize their property listing to stand out and reach as many potential guests as possible, and thus, boost their Airbnb occupancy rate.
There are some things that you, as a real estate investor, can do to advertise your investment property. Look at your Airbnb listing – not as an Airbnb host, but as an Airbnb guest. It needs to give a good first impression so make sure you write a great description and take appealing pictures. Another tip to increase your Airbnb occupancy rate is to share your Airbnb listing on social media platforms and other short-term listing sites besides Airbnb such as HomeAway, Trip Advisor, etc.
Airbnb Rental Income
In the short-term rental market, it’s crucial that Airbnb hosts establish the right price to charge their guests. If you charge too much, your Airbnb occupancy rate will fall behind and so will your Airbnb rental income. If you charge too little, your Airbnb rental income won’t cover your rental expenses.
A real estate investor should keep an eye on the market to determine how much to charge and still stay competitive. For example, during high seasons, you can ask for a higher price and still have a high Airbnb occupancy rate. But, when it is not a high season, it’s best to offer discounts to attract guests. Don’t forget to compare your asking price to other Airbnb rentals, hotels, and motels in the same real estate market.
Mashvisor provides property investors with real estate comps to compare different investment properties in a location to determine which one is more suitable for your investment plans and goals. To start looking for and analyzing the best Airbnb investment properties in your city and neighborhood of choice, click here.
Furthermore, make use of the Airbnb profit calculator. This is a type of rental property calculator that provides information on short-term rentals. Like the rental property calculator, this real estate investing tool provides property investors with data about the cap rate, cash on cash return, Airbnb occupancy rate and potential Airbnb rental income of various investment properties in a certain location. With this tool, a real estate investor finds the best locations for high Airbnb profits.
Final Words on Boosting Airbnb Occupancy Rate
Dealing with low Airbnb occupancy rate can be very stressful for Airbnb hosts. A successful real estate investor always assures finding the right location and the best investment property that guarantee a profitable Airbnb investment. Do you have more tips on how to increase Airbnb occupancy rate? Which tip do you think is most helpful? Let us know in the comments!
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