Beginner real estate investors want to know: how to start an Airbnb rental business?
Starting an Airbnb business has become one of (if not the) best ways to make money in the world of real estate investing. It seems like everyone wants to be an Airbnb host! If you’re reading this, you probably want to become one as well. The process of getting into the Airbnb rental market might look like an easy one: you buy an investment property, post some pictures, and you have a business, right? We hate to be the ones to break it to you, but making money from Airbnb rentals is not that simple. So, if you’re wondering how to start an Airbnb rental business and start making money, just keep on reading!
How to Start an Airbnb Rental Business: Choose the Right Location
Every real estate investor must know that the first thing to look into when investing in any type of real estate is the location. A certain location might be profitable for the traditional rental market, but not for the Airbnb rental market. Thus, the first step in how to start an Airbnb rental business is to conduct a real estate market analysis to determine if it’s right for this type of real estate investing.
The most important thing to remember is that not all cities have legalized Airbnb, while others impose strict regulations on Airbnb hosts. Therefore, it’s always smart to check these regulations in your city of choice to know what you’re getting yourself into before starting an Airbnb business.
In general, the best locations for Airbnb rentals are those that attract tourists and travelers – these are your target tenants! Such locations will provide a real estate investor with high Airbnb occupancy rates, an attractive Airbnb rental income, and thus, he/she will enjoy a good return on investment. How can you find these locations? You simply need a tool called the investment property calculator.
This tool gives property investors readily estimated projections of cash on cash return, cap rate, and rental income of properties (both traditional and Airbnb) across the US housing market. This allows you to easily compare properties in different locations to identify the best one. Where can you find one? Right here! Sign up with Mashvisor to start analyzing!
How to Start an Airbnb Rental Business: Find a Rental Property
After studying the real estate market and determining that it does make for a profitable Airbnb business, the next step in how to start an Airbnb rental business is to find an investment property. As a real estate investor, you need your rental property to attract tenants to start making money from the rental income. However, not just any rental property will do! Airbnb rentals are diverse; there are condos, beach houses, boathouses and yachts, and even lighthouses and castles. Did you know that the top Airbnb listing is a tree-house in Atlanta, GA?
Our tip: Find out where potential guests like to stay while in your location and find a rental property that allows them to enjoy the best experience. You also need to keep in mind that your rental property should bring in a good return on investment. Thus, as a real estate investor, you should perform an investment property analysis before investing your money, time, and energy into it.
Want to find an investment property to rent out on Airbnb that is guaranteed to make a good ROI? Use our Property Finder Tool – it allows you to find the best properties in any city and neighborhood across the US housing market in just 15 minutes! Do you have a free Mashvisor account? Click here to start your search!
How to Start an Airbnb Rental Business: Prepare the Airbnb Rental Property
When it comes to Airbnb rentals, guests do prefer them over hotels, but they have certain exceptions. So, the next step in how to start an Airbnb rental business is to assure that the property is rentable and attractive to Airbnb guests. You might need to do some repairs and fixing depending on the conditions of your investment property.
Moreover, it’s important to provide guests with things like fresh and clean towels, kitchen cutlery, and other essentials they’ll need during their stay. A lot of guests look for Airbnb rentals that have a homey feel of an actual living space, so keep that in mind. Give them the privacy they expect of an Airbnb rental property as opposed to being surrounded by hotel guests and staff.
How to Start an Airbnb Rental Business: Pricing
One of the challenges of how to start an Airbnb rental business is setting how much to charge for rent. The rental rate determines your rental income and how much you make from real estate investing. If you want a good return on investment, your rental income should be high enough to cover your rental expenses and still leave a profit (positive cash flow). So, how much should you charge for your Airbnb rental property?
One way to determine the right price is to check how much other Airbnb hosts in your location are charging for their rental properties, and then charge within the same range. Want to know an easier way? Use the Airbnb profit calculator. This real estate investing tool gives you an idea of what rental income a certain investment property should make if it were to be rented out as an Airbnb rental. It takes into account Airbnb cash on cash return, cap rate, and occupancy rate. As a result, this tool gives a real estate investor an estimate of how much he/she should charge for a good return on investment.
These are the basic requirements of how to start an Airbnb rental business. How to manage and market your business is up to you. Make sure you do enough research and learn the different strategies or techniques that successful Airbnb hosts use to attract potential guests and optimize their listing to make money in real estate investing. You know we’ve got you covered, so head over to the Mashvisor Blog to read everything you need to know about how to be on top when renting out a house on Airbnb.
At Mashvisor, we aim to make your life as a real estate investor easier. Our tools provide the most accurate and up-to-date data to help you make smart investment decisions whether you’re interested in traditional or Airbnb rentals. Make sure to sign up for our services and we guarantee you a successful real estate investing career. To start out your 14-day free trial with Mashvisor, click here.
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