5 Lies You’ve Heard About Investing in Vacation Rental Properties

Investing in vacation rental properties can be a lucrative idea when it comes to making money in real estate. While homeowners can rent out their houses or part of their homes to short-term renters, some real estate investors are buying property with the aim of renting it out on Airbnb or other home-sharing platforms. With the growth in popularity of Airbnb, buying a second home for investment is now quite common.

Like any other business, investing in vacation rental properties has its pros and cons. If you are thinking of buying vacation rental property, you need to weigh the advantages and disadvantages against each other. It will help you know if the idea is feasible and convenient for you.

There is a common issue, however, that comes up when real estate investors begin to look into this investment option: There are many lies out there about investing in vacation rental properties. These misconceptions may instill fear in property investors and stop them from moving forward or even give them unrealistic expectations. Let us identify and address some of these lies about investing in vacation rental properties.

1. You can do everything yourself

lie #1 when investing in vacation rental properties: you can't do everything yourself

One of the biggest lies about investing in vacation rental properties is that you can do everything yourself. Owning an Airbnb and getting it up and running requires a lot of work. There is much more involved than simply purchasing an investment property, listing it on Airbnb and receiving guests. You will need to take photos, create listings on vacation rental websites, manage the rental property, welcome guests, and deal with any uprising issues promptly. You will also have tasks like vetting guests, cleaning the property, changing the bedding, washing the towels, and refilling toiletries.

It is hard to handle vacation rental properties all by yourself and still provide top-notch services. Poor services will only lead to poor reviews. If you are looking to get into passive real estate investing with little work, investing in vacation rental properties is not the way to go. You can, however, choose to hire vacation rental management services instead of trying to handle it yourself.

Related: Can Airbnb Investment Properties Be Passive Income Investments?

2. Bad Airbnb reviews are the end of you

Owning an Airbnb may seem exciting until you get a few bad Airbnb reviews. Since your guests’ reviews are among the things that new guests consider before booking, having bad reviews may seem like a death sentence. Even though bad Airbnb reviews may reduce your Airbnb occupancy rate and Airbnb rental income for a while, never be discouraged. You can still bounce back after getting some bad Airbnb reviews and remain competitive.

Everyone in the Airbnb business has experienced bad guest reviews at some point. Most of these negative reviews are usually because the Airbnb rental properties or the Airbnb property management do not meet the expectations of the guests.

Successful Airbnb hosts always set clear expectations for their guests. They also dig into the negative reviews and address any issues promptly. A bad Airbnb guest review can be an opportunity to learn and become a better Airbnb host. Always remember to encourage your guests, especially those who seem satisfied with your services, to leave Airbnb reviews.

To prevent more bad reviews, it is good to build close relationships and maintain good communication with your guests. This way you will be able to know and fix any issues promptly before the guests decide to complain.

There are also some bad guests who may not be ready to comply with your house rules. If polite confrontation on such guests doesn’t work, it is better to cancel their booking. This ensures that they wouldn’t have a reason to write a bad review on your listing.

Related: How to Bounce Back After a Few Bad Airbnb Guest Reviews

3. Your rental property and everything in it will be ruined

Many potential investors hesitate when it comes to investing in vacation rental properties. They fear that guests may ruin everything they have worked for in their investment property.

However, platforms like Airbnb try to ensure the protection and security of hosts by implementing a number of safeguards and mechanisms. Airbnb’s Host Protection Insurance and Host Guarantee programs help to cover hosts in case damages occur. You can also use a security deposit for simpler and smaller damages that may occur during a stay.

4. You may not get paid

Another lie about investing in vacation rental properties is the notion that you may not get paid. Both hosts and guests are protected by several security features such as refund and cancellation policies.

Therefore, it is always advisable to only accept payments through short-term rental platforms. The Airbnb guest usually makes payments to the rental platform when making a reservation. The platform then transfers the payment to the host twenty-four hours after the guest has checked in.

If you have an Airbnb investment property, you should not accept payments outside the system. By doing so, you will be exposing yourself to many unnecessary risks.

5. The guests will not want to leave

Some people may fear that the guests will not want to leave the premises. However, most tourists usually have a limited number of days for their vacation. Moreover, there are usually short-term rental regulations put in place to deal with such situations. Airbnb laws help to ensure that all guests stay within the law.

One important way to prevent such situations is by properly screening your guests prior to reservation. Airbnb guest reviews are also helpful in Airbnb real estate investing when vetting guests. You can easily check a guest’s reviews, which are usually displayed on their public profile on Airbnb and visible to everyone.

The Bottom Line

Generally, many investors find the idea of buying a rental property to rent out on Airbnb attractive. Investing in vacation rental properties definitely has money-making potential. However, there are several lies out there about investing in vacation rental properties that you need to be wary of. As seen above, not all you hear is true. Ensure you do enough research and learn as much as you can before you get started.

Are you wondering how to start an Airbnb business? Do you want to find the best place to buy a vacation home? Mashvisor has got you covered. By offering important rental data and tools, Mashvisor makes successful investing in vacation rental properties possible for anyone.

You can use Mashvisor’s Airbnb profit calculator to find the best investment properties in the market and minimize risk. This tool uses Airbnb analytics to assess the return on investment of an Airbnb property.

To start your 14-day free trial with Mashvisor and subscribe to our services with a 20% discount after, click here.

Related: How to Find the Best Airbnb Properties for Sale

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About Author: Alex Karani

Alex is an entrepreneur and an experienced content writer focused on personal finance, business, and investing. For over six years, he has contributed to a number of publications, both online and print. When he's not writing or working, Alex enjoys reading, traveling, and the outdoors.

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