If you want to increase your income from Airbnb, one of the best ways to do this is by investing in additional properties. However, when you’re buying a property specifically for your Airbnb business, what should you look for?
Here are the factors to consider when buying Airbnb property.
Before you even start to look at individual properties for Airbnb business, take a step back and consider the bigger picture. Here’s what needs to be done before you start your property search:
Research the local real estate market. Understanding your local real estate market, including home prices and demographics, is extremely important if you want your property acquisition to result in a profitable investment for your Airbnb business.
Get approved for a loan. If you plan to take out a mortgage in order to finance your newest property acquisition, it is a good idea to first get pre-approved for a loan so that you know exactly how much you can afford to spend.
Find out the potential costs of renovations. If the housing stock is older in the area where you’re planning to buy, you may want to consider renovations in order to bring the property up to a level of quality that is suitable for Airbnb guests. Remember, your goal is to provide living quarters that are roughly on par with hotel accommodations for the best results.
Figure out legal, insurance, and tax concerns. What are the regulations for short-term accommodations in that location? What are the property tax, business licensing and permitting, and insurance regulations that apply to owning a property for an Airbnb business?
Figure out how much you need to earn to break even. Before you even get into looking for individual properties, you’ll need to decide how much you’ll need to earn in order to make a new property investment profitable for your Airbnb business.
Once you’ve made the decision to purchase a property in a particular area, it’s time for you to narrow your criteria down by weighing the pros and cons of each property for sale that you come across.
Here are some factors to consider when evaluating individual properties:
Location: Is your property going to be located in an area that’s likely to receive a large number of tourists? Is it walkable? Are amenities such as public transportation, shops, restaurants, and recreational activities located nearby? Would business travelers find your property to be convenient? These are all important location factors which will affect the number of bookings that your property receives.
Size: Many Airbnb hosts are often uncertain about choosing the right size for an Airbnb property. The truth is that there isn’t a right size. Depending on your budget, you may only be able to afford a small studio or you might be able to afford a large 5 bedroom house. Look for something that you think you can successfully manage and will generate enough profit to exceed the mortgage and other ongoing costs related to your property purchase.
Number of Bedrooms: The number of bedrooms is very important given the fact that the more bedrooms your property for Airbnb business has, the more you can charge for each booking. That said, you should also consider taking a creative approach to making additional sleeping spaces with a sofa bed or bunk beds.
Unique Amenities: What is it about the property that will catch guests’ eyes? In order for your property listing to get attention on Airbnb, it needs to stand out from the array of other properties that are available. Consider purchasing a property that offers unique amenities such as a unique design or views of the nearby harbor, city, or mountains. Private rooftop or outdoor entertaining areas are also sure to attract attention.
Access: Consider how your Airbnb guests will access your property. You need to be able to offer “self-check-in” options that allow guests to come and go as they please while also ensuring the security of your property.
Cleaning and Maintenance: How easy will it be for you to travel to the property to take care of routine cleaning and maintenance issues if you plan to do the work yourself? Is there a local property management company that you can trust to do the work for you or the cleaning service you can hire?
As you search for the right property for Airbnb business, stay patient. Taking the time to do your homework and really getting to know the area that you want to invest in will only increase your chances of finding a great deal.