Today’s story is a guest post from our friends at Short Term Stays. Their goal is to keep your Airbnb calendar full while keeping things simple. What a novel idea! These people know what they’re talking about and here is some advice for anyone looking to purchase a property and turn it into an Airbnb rental unit.
What to Consider When Buying a Property for Airbnb
There’s no denying that the hospitality industry is rewarding and fun, and sometimes it can turn into a full-blown career. And although the home sharing business has become popular to the extent where people are even buying homes solely for the purpose of sharing it on Airbnb, this is a huge step, that requires a lot of strategizing and research.
It’s time to face the truth. No matter what you’ve read or heard about all the lovely sides of the short-term rental industry, it is a serious business and it requires a lot of sacrifice. Many of you will first jump to the conclusion that managing your finances is the main problem, when in fact, there are several other factors that influence your future success as an Airbnb host.
If you’ve really set your mind to it, here are a few pointers from Short Term Stays. With our experience and expertise, we know what it takes to start from the bottom and rise to the top. We present to you the MOST important factors you have to consider before investing in your first Airbnb property.
- Property Location
When it comes to becoming a successful Airbnb host, of course you have to know all the ins and outs of the business. This also includes predicting the right location for your Airbnb property. If you already have the luxury to choose your next location, put your ’guest goggles’ on and think. First off, think who you are targeting? What kind of guests do you want to attract? Business travelers, families, or tourists? And if you know which particular group you are targeting, think about what city and location would be appealing to them and why.
- Which City?
Pick a city that is swarming with tourists and travelers. If you want your Airbnb to have a high occupancy rate, find a location near a successful business center or near a place of touristic value.
- The Neighborhood Counts!
After you’ve chosen the ideal city, do some research about it. Particularly, do research on what kind of neighborhood is best for your business. Not every city offers tourist-friendly neighborhoods. Now, you may be thinking: ’I’m not targeting tourists only!’ Yes, you’re right, but what about families who are renting your property long-term? Will they opt for a busy and noisy neighborhood, or a quiet and peaceful environment?
- And Finally, the Street
Don’t forget to think about the street. If you can buy a property on one of the main streets, or even close to it, that’s great! This will automatically attract more visitors. But also consider what the street is like and what your neighbors are like. Will it prevent your guests from having a relaxing and comfortable stay if you’re located on a busy street?
- Financial Situation
Before you even decide on the location, you need to make a budget. How much are you actually willing to spend on purchasing the property itself? Before investing your hard-earned money, you need to devise a financial plan, and do it with the help of an expert.
Your financial plan has to include every single expense you’re going to make, from buying the property, hiring professionals to manage it and inspect it, doing repairs, renovating, unexpected costs in the future etc.
Yes, it’s quite complex and you need to plan ahead. But, if you make a great plan you will know exactly what you can buy, and you’ll prevent yourself from going overboard with costs that will land you in debt.
- Management Team
This is something not many people take into consideration before making a huge business step like this. However, it’s as essential as having a financial plan. You go out, buy a property, but what’s next? Who is going to manage it?
If you’re relying on your friends or low-wage employees to do everything for you, you’re setting yourself up for disaster, because that’s not how it works in short-term renting.
Who is going to clean and prepare the unit?
Who is going to make the repairs?
If something unforeseeable happens, who is going to quickly jump in and solve the problem?
Who is going to meet and greet the guests?
Who will communicate with potential guests about bookings, reservations, or cancelations?
Who is going to manage the revenue?
These are just some of the major issues you have to solve before deciding to buy an Airbnb property. Once you have a trustworthy and reliable team at your disposal, you can start thinking about you dream property.
From our own experience, we’ve discovered that hosting on Airbnb can be successful only with careful organization and planning. There’s absolutely no winging it. And if you do things right from the start, you’ll see that buying, managing and owning a rental property is quite exciting! Before making one of the biggest business leaps ever, make sure to think hard and be wise.
Huge thanks to Short Term Stays for today’s post!