People decide to enter the “Airbnb game” for a variety of different reasons…
Some are seeking a consistent source of additional income and decide to use Airbnb as their platform for doing so. Hosts like these may rent or buy a property with an additional room beyond their personal requirements with the intention of filling it as often as possible with Airbnb guests. These hosts may also be motivated by the social element of meeting new people they have the opportunity of sharing their home with too.
Other hosts use Airbnb in a more sporadic and opportunistic way. These hosts will rent out their homes on Airbnb whenever it makes sense to do so: They may put their place up for a couple of weeks while on vacation overseas. They may take in guests when out of town for a long weekend. Or they may permanently list their place and simply move into their partner’s home whenever someone requests to book it.
Finally, there are hosts that approach Airbnb with a true investment mentality. These hosts will scout out a property for the specific purpose of putting it up on Airbnb. Their choice of property will be driven by whatever they believe will yield them the greatest rental income, and will then use Airbnb to seize that opportunity and maximize their full earning potential.
Knowing what type of host you wish to be is important.
It will influence how much time you invest in the “Airbnb game”, the way you develop your pricing and marketing strategies, the guests you decide to accept or decline, and the likelihood of succeeding in hitting your individual goals and objectives.
Before diving headfirst into Airbnb, have a brief think about what your personal motivation for hosting is and what you would like to get out of it.
The Airbnb Investor
Not all short-term property rental markets are created equal. Some receive lots of travelers, whilst others receive far less. Some have high property costs or rent whilst others are much cheaper.
If your intention is to find a property for the specific purpose of making money on Airbnb, it’ll be worth your while to hit the pause button momentarily and do some basic independent research before signing on the dotted line.
There are a number of tools out there to assist hosts in selecting investment properties optimized for making money on Airbnb.
You may wish to check out Airdna’s market reports, investment explorer and predictive pricing tools. These will help you gain competitive intelligence you’ll want to consider when looking for an investment property or trying to optimize one you already own.
You’ll want to compare the rental performance, supply and demand of different properties in different markets; as well as understand the prices and occupancy rates those properties are able to command throughout different times of the year.
Investing without doing your due diligence or without being aided by data-rich insights to guide your decision-making process represents a naïve leap of faith and will rarely result in the most profitable outcome that’s available to you.