Tips for Starting Out as an Airbnb Investor
Airbnb has allowed millions of amateur real estate investors to become successful in creating a side stream of revenue – and sometimes, in running their own full-time business. But if you're just getting started, Airbnb investing might seem intimidating.
So what does it take to run a profitable, successful Airbnb property?
The High-Level Overview
In case you aren't familiar, Airbnb is just one of several platforms that allow property owners to rent some or all of their property on a temporary basis to others. For example, you might rent a room to guests as if it were a hotel room, using the platform as a form of marketing and the arbiter of the exchange.
While many people can make hundreds, or even thousands of dollars a month renting their property on these types of platforms, this isn't a guarantee. There are millions of listings, so there's a lot of competition, and because pricing is competitive, it's possible that you won't be able to break even – especially if you have a lot of costs.
Tips to Run a Profitable Airbnb
Let's take a look at some of the things you'll need to accomplish if you want your Airbnb listing(s) to be profitable:
· Investments in the right area. Even with a great property, there's no guarantee there's going to be ample demand. To turn a profit, you'll need to have exposure to the right areas. Some cities are much more populated and heavily trafficked than others, and even in a big city in high demand, different neighborhoods are going to offer different profitability levels. For example, investing in Paris, France can be much more lucrative than in a smaller city outside the capital. This is where rental guides for French property owners come in, as they can provide insight into the best areas to invest in. If you're just trying to rent out a home that you already own, you won't have much control over this – so do your research before you decide to try and rent what you have.
· Quality photographs. There are millions of listings on Airbnb, and many of those will be in your city. Some may even be your neighbours. How are you going to stand out from the competition? One of the critical keys to success is taking and listing high-quality photos. Take pictures of the rented portion of your property and make sure you show off what makes it special. If you have no photography experience, it may be in your best interest to hire a professional photographer.
· Minimal repairs and upgrades. Additionally, if you want to compete, you'll need to make sure your room (or property) is in the best possible condition. That means you'll need to invest in repairs, maintenance, and other improvements. However, if these are too expensive, or if you need to spend money on a recurring basis, it could jeopardize your profitability; make conservative estimates and don't over commit.
· A low cost basis. How much are you currently paying for your monthly mortgage? What about your other upkeep expenses? Are you able to keep costs down enough that the income generated by your property is worth it?
· Enough personal time. Managing an Airbnb may seem like a "passive" income source, but the truth is, it takes a lot of time. Do you have that time to spare?
· Understanding of the law. Some areas have legal restrictions that prevent certain people or certain properties from renting on Airbnb. You may also have some legal responsibilities to your tenants. Make sure you have a full understanding of the law in your area before choosing to list your property.
· Politeness and promptness. Guests are going to book with you and message you frequently on the app. Make sure you're as polite and prompt as possible to give them the best experience.
· The ability to deep clean. It's your responsibility to thoroughly clean the property between guest visits. If you don't, you'll be breaching your contract and making your guests uncomfortable – which in turn, can lead to bad reviews, or even your removal from the platform.
· (In some cases), professional help. If all this sounds like it's too much for you to handle, or if you just want to maximize your chances of success, it may be in your best interest to hire a professional property manager. A property management company can help you keep your Airbnb running while providing advice on how to make it even more profitable.
· Adaptability. Finally, you'll need to remain adaptable. Renting your property on Airbnb isn't always straightforward, nor will it go the way you think. If you're willing to make changes, adjust your strategy, and try new things, you'll be in a much better position to succeed.
Airbnb can help you make more money from your existing properties, or allow you to become a full-time property investor. However, you have to treat this the same way you would any business, and invest the proper time and money into the planning and preparation processes.