When entering the world of real estate investing, there are a few things you must keep in mind in order to succeed. That is, especially, if we are talking about Airbnb real estate investing. This type of vacation home rentals requires you to be meticulous and responsible to a very large extent. This fact makes it an investment path that is fit for a select group of people with the right level of commitment.
Since Mashvisor is committed to helping Airbnb real estate investors achieve their goals, it is our duty to provide you with the information that will help you become a successful Airbnb host in the industry. Here, we have put together this guide of things you must NEVER, EVER do if you want to succeed with your investment. So, without further ado, here is what you need to avoid doing in the vacation rental industry:
1. The most successful Airbnb hosts never neglect location analysis
Making money with Airbnb starts with buying property in the most profitable Airbnb locations.
To achieve this goal, you must NEVER overlook the process of location analysis. Start by analyzing the real estate market in that area. What does it look like? What does the Airbnb rental demand look like in that area? Perform comparative market analysis and find real estate comps. Take every necessary step to find the best place to buy vacation rental property!
2. The most successful Airbnb hosts never neglect property analysis
Now that you’ve made sure the location of interest is profitable, it is time to analyze the investment property itself. Start by crunching some numbers provided by the owner especially if they have used it as a rental property before.
Conduct a proper investment property analysis by calculating cap rate, cash on cash return, return on investment, and so on. Make sure the numbers make sense and compare these to the comps you have found as well. It is important that you get a feel for an income property’s potential before you actually start receiving rental income in real time.
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3. The most successful Airbnb hosts never neglect their Airbnb profile
Once you have ownership of the property, it is a matter of setting up an Airbnb profile. However, this requires commitment and staying up-to-date with the profile activity.
The most successful Airbnb hosts make sure they’ve got the tools to help them monitor their profile. They also make sure to respond to any inquiries and reservations as soon as possible. Moreover, they always keep their availability calendar up-to-date so that Airbnb guests can check for when the property is available as well.
All in all, what I am saying is, keep track of your business at all times and keep up with the Airbnb reviews. Your goal is to sustain a high Airbnb occupancy rate which would ultimately mean that you are making money with Airbnb!
4. The most successful Airbnb hosts never reject help
Not all Airbnb real estate investors knew what they were doing when they first started. But, that’s totally OK. This is how we all learn and evolve as humans. So, as a beginner Airbnb investor, you can only succeed if you never reject help from other seasoned Airbnb investors. In fact, I think you must ask for it yourself!
Of course, in the world of short term rentals, asking for help is not so hard nor is it expensive. You can simply choose to hire the services of Airbnb property management. This means that you get to benefit from the knowledge of experienced Airbnb hosts who know what it takes to make money with this type of investment. Sure enough, it comes at a cost since you are supposed to pay these hosts. However, it is not an expensive service and you can take over and save that money once you learn the business.
5. The most successful Airbnb hosts never neglect their property
Maintaining your rental property comes with the package as well. So, if you don’t want the commitment, it is about time you turn around and forget about real estate investing. But, if Airbnb is what you choose to do, then be ready for maintenance and repairs.
Most successful Airbnb hosts expect to spend a few bucks on repairs every now and then. You never know when your Airbnb guests might break something or even steal some things! Of course, you need to be ready to replace and fix these things right away. Moreover, there is the periodic maintenance that you are obligated to perform- be it the roof, the water system, the air conditioning system or even the electric system.
Sure enough, these all cost money. Therefore, you need to be sure to always count these as part of your rental property expenses. This, of course, does not mean that you will be going around replacing things every day or every month. But, you should be ready for that as well as for a few property inspections after each visit.
6. The most successful Airbnb hosts never neglect legality
Unfortunately, Airbnb real estate investing is illegal in some states/cities. Therefore, as the successful real estate investor you are, get acquainted with the Airbnb regulations in your location of choice. Make sure it is legal in the first place.
For example, Las Vegas is one of those cities that is always buzzing due to the high rate of tourism. However, there are Airbnb restrictions that apply there which you must be aware of. In fact, recently, Las Vegas passed restrictions that will only allow primary residences to be listed for rent on Airbnb and other vacation rental websites. So, Airbnb real estate investing is actually illegal in the city now.
If you do find a city where Airbnb is legal, you need to make sure that the regulations are not too strict or limiting. For example, some cities have a rental cap limiting the number of days you can host Airbnb guests. This might limit your Airbnb rental income severely, depending on the location.
Becoming one of the most successful Airbnb hosts is a matter of commitment and due diligence. Be assured that as long as you are doing what you are supposed to do, you will eventually become successful in the business. If you are clueless about buying investment property for your rental business, check out Mashvisor. Or, you could schedule a demo to learn more about how to find an investment property. We help investors like you achieve their goals in the industry, so feel free to contact us!