A mother in law house can be an excellent Airbnb investment property. It provides you with a low-risk way of making money in real estate as a property owner.
What Is a Mother in Law House?
A mother in law house is a living space added to a single family home where, typically, an elderly family member lives. It can be a mother in law suite or apartment, adjacent to the single family house or small multi family home, or it can be a stand-alone mother in law house in the yard. There are different types of real estate that come in this form, but all provide families with independence and comfort while living close to one another.
When not in its intended use, though, a mother in law house can make a ready guest house. With its own entrance, bathroom and maybe even a garage, it can also easily be converted into an Airbnb investment property that is very convenient to manage.
Whether you are considering buying an investment property with a mother in law house for sale or you already have one, here is your guide to renting it out on Airbnb.
Pros and Cons of Renting Out a Mother in Law House on Airbnb
Pros of renting out on Airbnb:
- No long term tenants to accommodate, do repairs for, evict, and so on
- You have control over the guests staying at your Airbnb property and will be close by to discourage noise issues or disorderly behavior
- You take care of the property management yourself and can save money on hiring a professional
- You can use the Airbnb rental income to cover your mortgage and live for free
- Availability on Airbnb can be flexible when you need the mother in law house to put up family guests
- Airbnb data shows that it is better in terms of return on investment than long term rentals in most locations
Related: How to Become an Airbnb Host in 2020
Cons of running an Airbnb rental property so close to your home:
- You will always be available for guest requests and it is hard to say no to late check-ins
- If you want to travel, you will need help with property management
- Neighbors might disapprove of guests coming and going
- To be feasible, your property needs to be in a popular Airbnb location
Is it legal to rent out a mother in law house on Airbnb? It depends on where it is located. Some cities are very open to short term rentals while other housing markets are concerned with the issues Airbnb may cause for local communities. City councils have put regulations in place in such areas.
Keep in mind that in many locations, Airbnb regulations are concerned with whether or not the owner lives in the property or is present during the guests’ stay. So if you are living in the home and renting out the mother in law apartment, you will likely face fewer regulations. Still, be sure to check zoning laws in your local area.
The following cities do not have strict Airbnb regulations:
- Palm Springs
Cities with Airbnb legal issues include:
- Las Vegas
- New York City
- San Francisco
- Los Angeles
- Washington, D.C
These cities have strict Airbnb laws and regulations on short-term rental properties. They require the property owner to live on the property in order to be able to rent out on Airbnb which keeps real estate investors from running non-owner occupied rentals. This makes a mother in law house an especially valuable Airbnb investment property in those cities because they are the perfect – and only! – way to have an Airbnb rental.
Use our Property Finder to find lucrative Airbnb investment properties in your city and neighborhood of choice.
The Airbnb Mother in Law Strategy: 5 Steps
Here are the steps to take in order to have a profitable Airbnb real estate investment. Research is crucial so you know what to expect and how to manage the financial aspect of renting on Airbnb.
1. Conduct analysis before buying an Airbnb rental property
Before investing in real estate with a mother in law house for rent, you should do a complete Airbnb investment analysis of the location and the potential investment property to see if it makes financial sense. Check your chosen location to see if there is a demand for Airbnb properties in the area. It is best to see what Airbnb rental income you can expect in the area first – Mashvisor’s Real Estate Heatmap is a great tool to use. Then, use an Airbnb profit calculator to analyze any property for sale to make sure it will bring a good return on investment.
2. If you already own the mother in law house, use an Airbnb calculator
Use an Airbnb profit calculator to see what Airbnb pricing you can set for it and how much money you can make. Then, look at Airbnb listings in your area at a similar price point to see what amenities and level of comfort you need to provide to be competitive. This will help you determine your renovation budget.
3. Prepare your mother in law house for listing on Airbnb
Do any repairs needed and rearrange the space to fit the number of Airbnb guests you expect to be accommodating. This means adding extra beds and storage, maybe a new kitchen table. Consider splitting the bathroom so it can be used by two people simultaneously. If it is a really small mother in law house, you can open it to a small private patio in the yard to add a few square feet.
4. Make your Airbnb property stand out
If your mother in law house has been lived in, keep a few old-school pieces like a kitchen curtain or a vase. Get an old armchair upholstered in a retro patterned fabric for a splash of color on the listing photos. These little details will add charm and a homelier feel, attracting guests with higher criteria and, hopefully, a higher budget.
5. Plan for seasonality
Seasonality affects the Airbnb occupancy rate, which is the Airbnb analytics metric of how often the rental property is occupied by an Airbnb guest. The higher the occupancy rate, the more profitable a rental property is. That is why your Airbnb strategy should include ways to maximize the Airbnb occupancy rate such as: adjusting prices according to demand, using seasonal decorations and goodies for guests (sunscreen in summer, hand cream in winter, for example) to spark positive reviews, offering airport pickup for late arrivers, etc.
Whether you own or want to buy a home with a mother in law house, it is a sound real estate investment as you will have the ability to apply the profitable Airbnb rental strategy and make good money.