There is no arguing that owning an Airbnb is a popular trend in today’s real estate investing business. In many cases, real estate investors owning an Airbnb short-term rental property receive more profits and a higher return on investment than when owning a traditional long-term rental property. While owning an Airbnb sounds like an easy plan to make money from real estate, there are some challenges that Airbnb owners face all the time.
Some cities across the US real estate market still impose minimum rental periods or set limits on the number of days to rent an Airbnb property per month or per year. There are also city zoning laws that limit short-term rentals to specific neighborhoods, prohibit short-term rentals near other short-term rentals, and even go as far as to limit the number of occupants or tenants. Furthermore, if you’re investing in a townhome or condo and are planning on renting it out through Airbnb, Homeowners’ Association rules and regulations must be taken into account.
Not every real estate market is suitable for owning an Airbnb rental property. Every property investor should know that location plays a major role when it comes to everything in real estate investing. Depending on your location or real estate market, owning an Airbnb income property could yield great profits or financial disasters. It all comes down to demand for short-term rentals in the real estate market.
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Setting the Rent
Your rental income is how you make money as an Airbnb real estate investor. Of course, you don’t want to charge too little and not gain any profits, but you also don’t want to charge too much and not get any tenants! The best way to solve this issue is by using an investment property calculator. Mashvisor’s investment property calculator, for example, shows property investors estimates of the rental income they can expect from owning an Airbnb rental property, in addition to how much Airbnb property investors charge for rent in their location.
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When owning an Airbnb income property, property management can be a bit trickier than when owning a traditional rental property. It requires more time and effort because tenants are always checking in and checking out. Thus, Airbnb owners have to repeat the process of advertising the rental property, welcoming tenants, and cleaning the rental to prepare it for the next tenant over and over again.
Owning an Airbnb can be a luxurious investment, but that does not make it an easy one. Real estate investors have to consider these challenges and be aware of how to overcome them for a successful real estate investing career.
If you’re interested in learning more about this topic, read this: 5 Challenges of Owning an Airbnb Rental and How to Overcome Them.