Real Estate Investments are considered to be the best investments to generate Passive Income and today in this article we are going to look into this similar identity, Airbnb Investment Property: How to Buy an Airbnb Investment Property?
Since the launch of Airbnb in 2008, Airbnb has revolutionized the Tourists Renting Business and raised the potential of Real Estate Investing for the Investors.
Investing in Renting a house on Airbnb to make profits in the Airbnb Investment Property business, we’re going to uncover the best strategies to run a profitable Airbnb Rental Property Business, answering all the questions related to Airbnb Investment Property business as follows, how does Airbnb Investment Property business works?
Discovering the most popular US cities for the Airbnb Investment Property business and many more so without any further delay let’s dive into our most interesting topic, Airbnb Investment Property: How to Buy an Airbnb Investment Property?
What is an Airbnb Property Investment?
Table of Contents
Airbnb Property Investment business is as similar as Conventional Real Estate Property business but not same, let me just explain you; In Conventional Real Estate Property business you have to invest your money in a property where tenants sign a lease or pay monthly rent but in Airbnb Property Investment business, Tenants sign a lease or rent on short-term basis (majorly).
In both the Investments, there is a consistent cash flow but more in Airbnb Property Investment business as compared to Conventional Real Estate Property Investment business.
In terms of Sustainability, Airbnb Property Investment business gives you better experience but Airbnb requires more maintenance.
The Airbnb Property Investment business is the excellent way to generate a massive amount of profits from multiple Real Estate Property you own.
Airbnb Investment Property: how does it work?
The Airbnb Investment Property business works in this manner, you list a small portion or overall property on Airbnb for someone to rent for a short period of time, which allows you to generate a good amount of profits throughout the span of year.
The Airbnb Investment Property business is the better investment because there are high night-stay charges or you can charge accordingly anywhere between $75 to $200 per night stay as per the location.
For instance, you want to rent a house or a single bed apartment in California for one month. The average monthly cost of an apartment is $1,750, the cost lies between $21,000 for the lease of 12 months but when it comes to Airbnb, you can make more money in short-term bookings with the night-stay charges.
Airbnb also charges maintenance fees from the tenants or renters which means you can save on repair costs also.
Is an Airbnb Investment Property more profitable than a Conventional Investment Rental Property?
A conventional Rental Property business is quite different from Airbnb Investment Property business. There is one thing that separates both of them from each other, time period and profit margins.
A conventional Rental Property business is defined as long-term rental units that have lower profit margins than Airbnb Investment Property business.
Airbnb Investment Property business is the short-term rental units that have high profit margins, more cash flow, long sustainability and day to day maintenance responsibility.
If you want to start an Airbnb Investment Property business then make sure to take an analysis of your near local areas or other tourist spots where you can rent rooms/apartments and sell it on Airbnb for higher profit margins. Also check if that area has high tourism or not. (on seasonal or consistent basis)
Note: Conventional Rental Property business have their own benefits if you want us to publish an article on Conventional Rental Property business then comment down below.
Unique Expenses of an Airbnb Investment Property
Airbnb Property Investment business have their own unique expenses including,
- Utilities Requirements
- Maintenance Costs
- Furnishing/Decorating Costs
- Airbnb: Home Insurance
- Other Amenities such as, Television subscription service, Newspaper subscription and Electricity charge etc.
So there are many unique expenses which you have to keep in mind before starting an Airbnb business.
Financing Investment Property Vs Traditional Income Loans, which one is better?
Purchasing a financing Investment Property is a bit different than traditional home loans. For instance, Government Insured loans such as, VA Loans (The US department of Veterans Affairs) or FHA Loans (Federal Housing Administration) you can’t get an investment property through these types of loans.
In addition, there are several other methods you can use to finance an investment property such as Investment Property Loans but for this you’ll need to met some criterias including,
- A Solid financial profile.
- 700 or above credit score.
- Large down payments.
- High Interest Rates.
Others are Traditional Home Loans or Home Equity Loans that are done through cash-out refinance or home equity loans but there are many high risks associated with their terms and conditions so keep in mind before proceeding to home equity loans.
Popular US / Australia / Europe Cities for Investment Property Business
Right Real Estate Property Investments is proportional to good profit margins but it’s not an easy task to accomplish, here are some best cities to make a good start with in Airbnb Investment Property Business.
United States of America
| Cities | States |
| 1. Palm Springs | California |
| 2. Gatlinburg | Tennessee |
| 3. Gulf Shores | Alabama |
| 4. Panama City Beach | Florida |
| 5. Saint Augustine | Florida |
| 6. South Lake Tahoe | California |
Europe
| State | Country |
| 1. Isle of Anglesey | United Kingdom |
| 2. Montrichard | France |
| 3. Gloucester/Cheltenham | United Kingdom |
| 4. Isle of Wight | United Kingdom |
| 5. Brighton and Hove | United Kingdom |
Australia
| Cities | Country |
| 1. Mundaring | Australia |
| 2. Southern Grampians | Australia |
| 3. Bunbury | Australia |
| 4. Warrumbungle | Australia |
| 5. Goulburn Mulwaree | Australia |
Pros of An Airbnb Rental Property for Airbnb Investment Property Business
Airbnb Investment Property Business have many benefits to take step in, benefits include;
1. Cash Flow: Airbnb Business requires maintenance costs and a good profile on Airbnb which means your property that you’re going to list on the Airbnb website should be professionally photographed in a desired location, if it happens then don’t worry about the sales.
2. Flexibility: More opportunities ahead, if your listed properties on Airbnb have much potential means good in appearance, are on nice locations then investors also put your properties on other websites as well.
| Advantages | Disadvantages |
| 1. Higher Profit margins | 1. Higher upfront costs |
| 2. Less reliance on long term tenants | 2. Higher Operating costs |
| 3. Airbnb Advertisement benefits | 3. Less security for long-term tenants |
Cons of An Airbnb Rental Property for Airbnb Investment Property Business
1. Communication: Airbnb has a drawback, if you’ll not make connections and consistent communications with your customers and investors then Airbnb Investment Property Business is not for you.
2. Risk Management: should be in your first priority if you want to become an Airbnb Investor. You have to be ready to face new challenges everyday. Be prepared and be insured for any emergency occurred in future.
How to Buy an Airbnb Investment Property: 8 Keys Steps to Follow
If you have decided to step in, in the Airbnb Investment Property Business then proceed your journey with these 8 Keys Steps to buy Profitable Airbnb Investment Property.
- Choose a perfect location
- Follow Airbnb laws and Regulations
- Do financial planning and prepare a budget
- Analyse your Airbnb Property type
- Work with an Airbnb or Real Estate Agent
- Connect with other Investors
- Use Real Estate Investment tools and Big data to analyse the market
How to Invest in an Airbnb Investment Property Business without owning a Property?
- Become a Property Management
- Sitting in an Airbnb house
- A furnished house for rent
- Approaching home owners interested in renting
- Experiencing Airbnb (properly)
- Become a Super host on Airbnb
Airbnb Property Investment: How to Maximize Your Airbnb Rental Properties Profits?
Airbnb Investment Property Business is not a quick rich scheme, you have to make consistent efforts to maximize your profits. Here are 3 key steps to Maximize your Airbnb Rental Properties Profits:
- Analyse your Market properly
- You’re now in a Real Estate business: think like an Entrepreneur
- Organise your space, organise it as attractive as you can
- Know your business strengths and weaknesses
- Expand your business: Increase the number of properties
YouTube Analysis: How to Buy an Airbnb Investment Property? (2023)
Frequently Asked Questions (FAQ’s)
What kind of property should I buy for an Airbnb Property Investment?
Choose a perfect location, Nothing else! For good profit margins, your property should be in perfect location where tourism is high.
Do i need to live near my Airbnb Rental?
No, its not important, you can also hire a property manager for your Airbnb Rental Properties.
What are the best Cities for Airbnb Investment?
1. Palm Springs in California
2. Gatlinburg in Tennessee
3. Isle of Wight in United Kingdom
Is Airbnb a Good Investment?
The Airbnb Property Investment business is the excellent way to generate a massive amount of profits from multiple Real Estate Property you own.
