Do you want to invest in Airbnb short-term lodges and are wondering how to find a property for Airbnb real estate investing? This article is for you as it provides you with all the important steps that you need to take and consider in order to know how to find a property for Airbnb real estate investing.
Airbnb rental investing has become so popular and lucrative that many real estate investors and beginner investors, in particular, want to invest and get to know how to find a property for Airbnb real estate investing.
How to Find a Property for Airbnb: Check Your Budget
It is unquestionable that investing in Airbnb lodges is a great way to get positive cash flow; however, this type of investment requires you to set your budget and break down your costs carefully. You need to factor in expenses such as cleaning fees, landscaping, repairs and other unexpected costs. Bear in mind that Airbnb takes a 3% service fee from the host for each reservation. Following are other common monthly costs that might come your way and you have to be aware of them:
Mortgage Payment (principal + interest)
Property Tax
Insurance
Property Management Fee
Cleaning Service Fee
Maintenance Fee
Vacancy Provision
Do you want to know the best ways to finance investment properties? Read What Are the Best Ways for Financing Investment Properties?
How to Find a Property for Airbnb: Know What Guests You Want to Attract
One of the most important elements that you need to determine in order to know how to find a property and decide what kind of property to purchase is identifying the type of tenants/guests you want to attract and cater to. If you prefer to attract families or big groups of friends, it is advisable to go with vacation houses, single-family houses or beach houses. However, if you want to attract solo travelers/ tourists or couples, try to invest in apartments or properties that are close to city centers, vital places, and touristic sites. In all cases, Airbnb hosts aim at attracting swarms of good guests and avoid the nightmare guests they hear about. Thus, you need to provide the best experience ever to the type of guests you want to attract to ensure having a consistently high occupancy rate.
Do you want to know more about how to be a successful Airbnb host? Read Mastering Your Airbnb Investment: How to Become the Most Successful Airbnb Host
How to Find a Property for Airbnb: Identify a Location
Once you decide on what type of guests you want to deal with, start searching for locations and neighborhoods they would want to rent in. To know how to find a property for Airbnb investment, you need to search for top Airbnb cities and neighborhoods and make sure the property you want to purchase is close to all sought-out attractions. Airbnb guests and travelers want to get basic and convenient amenities and access to main transportation such as buses and subways. However, if the location is not ideal or less than favorable, try to find or create a spectacular property that guests cannot resist. Make sure to tell travelers about how they can enjoy that particular area and be honest about how far public transportation or main attractions are from your property. In order to help you know how to find a property for Airbnb, the following is a list with the top 3 best places for Airbnb real estate investing in 2018 in the US housing market:
Average Airbnb occupancy rate: 61%
Median property price: $535,000
Airbnb rental income: $2,857.48
Airbnb CoC return: 5.68%
Airbnb cap rate: 5.68%
Chicago, Illinois
Average Airbnb occupancy rate: 62.5%
Median property price: $839,688
Airbnb rental income: $3,883
Airbnb CoC return: 1.06%
Airbnb Cap rate: 1.06%
Average Airbnb occupancy rate: 56%
Median property price: $457,000
Airbnb rental income: $4,854
Airbnb CoC return: 6.13%
Airbnb Cap rate: 6.13%
How to Find a Property for Airbnb: Property Finder Tool
Finding the right property is the hardest part for real estate investors as they need to find a profitable property. There are several traditional methods known to real estate investors such as driving around the neighborhood and checking properties. Thankfully, 2018 brought real estate investors the property finder tool that allows an investor to find and examine properties online, making it easier than ever to answer the question of how to find a property. Using certain filters, the property finder tool will provide users with a list of properties that match the data and criteria they input. For instance, Mashvisor’s property finder tool uses a range of analytics, real estate comps and metrics to provide users with a list of real estate properties that have the highest potential of returns in the area they are interested in. Mashvisor’s property finder tool takes into account the user’s or real estate investor’s budget, property type and desired returns to provide him or her with a list of properties based on their occupancy rate, cash on cash return and cap rate in the area or neighborhood they are interested in.
Are you interested to know more about how Mashvisor’s property finder tool works? Read How to Find Investment Properties Using a Property Finder Tool.
Bottom Line
The real challenge for every real estate investor is not only how to find a property, but also how to find the right property that meets real estate investors’ budget, plans, and ambitions. This, however, requires a deep study and understanding of the housing market in order to determine the best time to purchase a real estate investment property. Understanding your needs, investment strategy, and the real estate market situation makes it easier to find the RIGHT Airbnb property and make profitable and successful real estate investments.
To start looking for and analyzing the best investment properties in your city and neighborhood of choice, click here.
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