Is Buying a Home to Rent on Airbnb a Good Idea?
You may have heard of people making a killing by renting out their homes on Airbnb, and it’s all true. As of 2019, the number of hosts renting out their properties to guests from all over the world hit 2.9 million. By 2021, new Airbnb hosts saw an increase in income, earning over a total of $1.8 billion—up 34% from 2019. And the numbers keeps rising year after year.
With numbers like that, it’s no wonder why so many people are considering buying a house to rent out on Airbnb. But is it really worth it?
Well, yes and no. It all depends on a number of factors, such as the location of the house, the type of property, and your overall investment goals.
For example, if you’re looking to generate a passive income stream that will help you pay down your mortgage faster, then buying a house to rent out on Airbnb is a great idea. However, if you’re simply looking to make a quick buck, then you might want to reconsider.
The bottom line is this: buying a house to rent out on Airbnb can be a great investment, but it’s not for everyone. So, before you start scouring listings and joining the ranks of Airbnb hosts, here’s what you need to know
The first thing you need to consider when thinking about buying a house to rent out on Airbnb is the potential return. In order to make a profit, you’ll need to charge enough per night to cover your mortgage payments, property taxes, insurance, and other associated costs (such as furnishings and utilities).
You’ll also need to factor in the cost of your time. Although you can outsource some of the work to a property management company, you’ll still need to spend time marketing your rental, communicating with guests, and dealing with any issues that may arise.
To get an idea of how much you could potentially earn, use an Airbnb calculator to estimate your monthly income. Just enter your city, the number of bedrooms and bathrooms, and other relevant information, and the calculator will do the rest.
Keep in mind that the estimate is just that—an estimate. Your actual earnings will depend on a number of factors, such as the seasonality of your location, the amenities you offer, and the length of stay.
Here are some key amenities that can help increase your earnings:
● A private pool
● A hot tub
● High-end furnishings
● A well-equipped kitchen
● A washer and dryer
● Cable TV
Do your research and make sure you’re comfortable with the estimated earnings before buying a house to rent out on Airbnb.
Finally, before you buy a house to rent out on Airbnb, you need to think about your overall investment goals. Are you looking to generate income? Build equity? Or both?
If you’re simply looking to generate income, then buying a property in an expensive city or popular tourist destination is probably your best bet. But if you’re more interested in building equity, then you might want to consider buying a property in an up-and-coming neighborhood or a less popular tourist destination.
No matter what your goals are, make sure you think long and hard about the property you want to buy. After all, this is a major investment that will likely require a lot of time and effort on your part.
Zillow states that come 2023, we will see 123 housing markets fall, while 780 will rise. With this information in mind, it’s important to do your research before buying a home to rent on Airbnb.
Cover all your basis, from looking into estimated earnings and popular locations, to understanding your overall investment goals. Once you’ve done your due diligence, then you can make a decision about whether or not buying a house to rent out on Airbnb is right for you.
If you’re considering buying a house for Airbnb rental investment, contact Irma Yapor at Real Property International. A quick consultation will help you understand the ins and outs of this type of investment, as well as how to search for homes in the Orlando area.
Whether you’re looking to generate income or build equity, investing in an Airbnb rental property can be a wise decision—but only if you go into it with your eyes wide open. So do your research and consult with a professional to learn more about this type of investment.