Airbnb real estate investing is all the rage now among new and experienced real estate investors, and for good reason too. This relatively new real estate investing strategy has given a kind of facelift to the idea of making money in real estate with rental properties.
Because of everything you’ve heard, you’ve made the decision to make Airbnb real estate investing your next venture. A wise decision most would say. But, like everything else in life, success with Airbnb real estate investing doesn’t come easy. It doesn’t have to be difficult either, though. Let us walk you down the path of success with an Airbnb investment property.
Do You Have What It Takes to Be an Airbnb Real Estate Investing Mogul?
In order to find success and be making money in real estate with an Airbnb investment property, you have to make sure this path of real estate investing is for you. You may have found some of the best Airbnb investment opportunities out there, but if you’re not equipped to be a short term rentals real estate investor, it won’t matter. Answer the following questions to find out if Airbnb real estate investing is your calling:
To learn more about how we will help you find the best Airbnb investment opportunities, click here.
Do you have the investment property financing?
This is a general question every real estate investor has to answer, whether for short term rentals or long term rentals. Successful real estate investing comes at a cost: investment property financing.
While some Airbnb investors are able to pay out of pocket for an investment property, most turn to mortgage lenders. This is actually the better option for investment property financing because of the idea of leverage: the less you put in of your own cash for short term rentals, the better your return on investment (ROI on Airbnb) will be.
Will you be able to qualify for a mortgage loan? How’s your credit score? Visit your local bank to see what your options are for investment property financing. Remember, high interest rates and hefty monthly payments cut into the return on investment and can even lead to a negative cash flow property. No real estate investor wants this.
Have you considered costs beyond investment property financing?
Another thing to consider is the costs an Airbnb investment property will accumulate on a regular basis. While ideal Airbnb investment opportunities will bring in enough rental income to cover the expenses and then some, this is not always the case. Make sure you have money set aside for the expenses that come along with short term rentals. Until you achieve a positive cash flow property, this will be vital to keeping your Airbnb investment property afloat.
Do you have the time for Airbnb property management?
Airbnb investment property financing is only one kind of investment you will be making. Time is an essential investment for short term rentals. If a real estate investor wishes to rise above the competition, Airbnb property management will have to be among the top priorities. We’ll give you some of the best tips to make sure your Airbnb property management is on point.
Of course, Airbnb investors always have the option of going for professional Airbnb property management. Decide this early on so as to budget for this real estate investing expense.
These are the essential things to consider when investing in Airbnb investment properties. If you’re still not sure whether Airbnb real estate investing is for you, then read: Four Things to Consider Before Purchasing an Airbnb Investment Property.
How to Succeed with Airbnb Real Estate Investing
We’re going to start you off right from the beginning of your Airbnb real estate investing journey:
How to Find the Best Airbnb Investment Opportunities
The best Airbnb investment opportunities= the best investment properties in the best real estate markets.
Find the Best Real Estate Markets for Airbnb Investment Property
This is the first step to success in real estate investing with short term rentals, but also the hardest. What makes for the best real estate market for an Airbnb investment property? Airbnb investors should look for a real estate market with a growing economy that has tourism as a leading industry. The most important thing? The real estate market shouldn’t have any Airbnb laws restricting this type of real estate investing too heavily.
Sometimes, however, the hottest real estate market is not always going to offer the best Airbnb investment opportunities. Sounds like a contradiction, but actually a real estate investor needs to keep this in mind when searching for the best real estate market. The hottest real estate market will have expensive Airbnb investment properties and a lot of competition over them. The return on investment, while more or less guaranteed, will be lower than in other real estate markets.
Speaking of Return on Investment…
The real estate market Airbnb investors should go for must also promise a good return on investment. The best way to get this information is with a rental property calculator. Mashvisor’s rental property calculator can show you the kind of return on investment any US real estate market will bring you with an Airbnb investment property. Search a city and take a look at the Airbnb cash on cash return, Airbnb cap rate, and even the expected Airbnb rental income. Right away, you can decide if a real estate market is a good choice for Airbnb investment properties or not.
To make things easier…
The Best Cities for Airbnb Investment 2018
To make things a bit easier for Airbnb investors, here is a list of the best cities for Airbnb investment 2018. These cities were chosen based on the data from Mashvisor’s rental property calculator and the characteristics mentioned above.
To start looking for and analyzing the best Airbnb investment properties in your city and neighborhood of choice, click here.
Find the Best Airbnb Investment Property
After choosing from the best cities for Airbnb investment 2018, or another promising real estate market, it’s time to find investment property that will be making money in real estate for you. The only way for Airbnb investors to be confident in their choice is through Airbnb investment analysis.
Airbnb investment analysis means studying all the aspects of an investment property to make sure it will bring a good return on investment. First, where exactly is the Airbnb investment property located? You may have chosen from the best cities for Airbnb investment 2018, but what about the neighborhood and street? Make sure the Airbnb investment property is close to all of the tourist attractions that made you choose the city in the first place.
You’ll also want to perform a neighborhood analysis as well. The neighborhood should also show it can bring a good return on investment. A rental property calculator will be able to show you cash on cash return, cap rate, and Airbnb rental income for a neighborhood as well.
The final step of Airbnb investment analysis requires looking at the kind of return on investment the rental property itself can bring. Again, use our favorite real estate investment tool which can even show you if the Airbnb real estate investing strategy is right for the particular investment property you have your eye on.
A must-read for Airbnb investors: Airbnb Profit Calculator: The Ultimate Real Estate Investment Tool
Airbnb Property Management
Success in Airbnb real estate investing starts with finding the best Airbnb investment opportunities, but it doesn’t end there. The most successful Airbnb investors know that Airbnb property management is the heart and soul of short term rentals. Don’t want to hire professional Airbnb property management? Then follow these tips:
The Price is Right…Right?
Successful Airbnb real estate investing starts with the right rent price. Make sure you are making enough Airbnb rental income while still setting a competitive price at the same time. For more information on how to do that, read: How Much Should I Charge for Rent?
The Perfect Airbnb Listing
Don’t let a boring Airbnb listing represent your investment property. Add all the needed information, nice photographs and market yourself in the best way possible. A good way to know how to write an Airbnb listing is to look at a few of the top Airbnb listings on the site for reference.
Pamper Airbnb Guests
Take good care of your Airbnb guests. Welcome baskets, personal tours, or even just helpful suggestions on what to do and where to go can set you apart and get you good Airbnb reviews. Be sure to keep the Airbnb investment property clean for your guests!
Tend to Repairs
Don’t let any issues get worse in your Airbnb investment property. Tend to repairs as they come up and ensure that the rental property is a nice place for Airbnb guests to keep coming back to.
Optimize and Automate
Want to make Airbnb property management easier? Use every tool you can to optimize and automate. Booking software, smart locks, and the like can make Airbnb property management run smoothly. Airbnb investors have even managed to come close to passive income in this way!
Airbnb real estate investing is a profitable path to take. Just be sure to take the steps towards success and follow through with your Airbnb property management. Surely, in time, you too will be a successful Airbnb real estate investor!