Make the Right Property Decision to Boost Your Airbnb Profits
Investing in Airbnb real estate may not seem as easy as picking a square on a board, buying it, and renting out for a profit. You need to decide which property to purchase and in which area, considering a wide range of markets. But everything can become easy with the help of the right websites, tools, and information.
To get started with investing in Airbnb properties, here’s a guide that can prove very useful.
Know Your STRs
Short-term rentals (STRs) are a unique investment opportunity. Learn how to research STRs and familiarize yourself with STR regulations in your target markets to find a great market to invest in an Airbnb.
In the event of parity between two potential investment locations, you might choose one because it is more STR-friendly. Nonetheless, there is more to learning how to do research for STR investments than just the laws.
As a form of short-term rental, some cities’ policies are more accommodating than others. The government of Maui, Hawaii, for instance, strictly regulates the number of STRs that can be advertised. If you’re an investor, this might sound like a deal breaker, but it’s not that simple. Due to low supply, high demand, and low competition, investors who can secure a licensed STR in Maui are in a perfect situation to earn A LOT from this venture.
Every Decision Demands the Research
If you’ve already settled on a specific city or region, then it’s time to learn more about the surrounding areas, zip codes, and markets. After picking a city, it’s still important to look at things like competition, zoning laws, average daily rate (ADR), and more to see if they’ll help or hurt your investment. Though you can track down some of these numbers manually, you can also use programs like MarketMinder to rapidly generate all the information you require.
Compare the Markets Together
Investing in a city and a piece of real estate that is likely to meet your goals requires doing some market comparison. Using tools for market comparison is the quickest and easiest option. By comparing two or more markets, you can see how their revenue and occupancy rates are changing over time. You can enter different cities or zip codes to compare Airbnb revenue, occupancy, and rate of growth if you haven’t decided where to put your money yet. However, Market Comparison can be used even after a city has been selected, allowing investors to zero in on the best performing neighborhoods and building sizes to maximize profits.
Zip codes, neighborhoods, the number of bedrooms (studios to seven or more) and maximum occupancy can all be changed at the click of a mouse. The most profitable mix can be determined by contrasting revenue, occupancy, and average daily rate from year to year.
Know What to Expect on Your Investment
After settling on a target area and the appropriate size of investment property, you can begin looking into available rental options. To find properties that meet your needs and can help you achieve your Airbnb real estate investment goals, you can rely on many online platforms like Zillow. Once you have narrowed your search based on price range and desired property features, compile a list of promising addresses, and then return to the market comparison tool. There are many Airbnb profit calculator tools as well that will quickly determine your potential earnings from Airbnb in addition to other critical metrics to help you make a decision.
Input an address and get instantaneous annual revenue and occupancy projections. To finalize your investment analysis, use the financial calculator to input the purchase price of the house and your anticipated major expenses.
Don’t Go too High. Don’t Go too Low
You can make or lose a lot of money on Airbnb depending on the pricing strategy you employ. Keep in mind that the daily rate you offer may vary depending on the day of the week, the season, and supply and demand in your market; there is no “right” rate for your property. Because of this, a profitable pricing strategy must change as these elements do. Market comparison tools can tell you exactly what you should charge for rent if you’re having trouble deciding. Here are two important things to keep in mind.
Pricing
Useful tools like Custom Comps allow you to check your Airbnb dynamic pricing tool, Smart Rates, against your own custom-built sets of comparables. You can see if your competitors are getting booked more often or at higher rates than you are, and you can use the recommended rates calendar to make adjustments to your own rates a full year in advance.
Pacing
Top rated pricing tool allows you to monitor your competitive rates, as well as their availability, future bookings, and projected rates. With their help, you can stay ahead of the competition by anticipating travel surges at each property you manage. You can select a truly customized set of comps by filtering them according to features like amenities, distance, ratings, reviews, and more.
