Another great way to build wealth in real estate is to own an AirBnB investment property. However, you need to take into consideration the local regulations required for this type of investment. There are restrictions and limitations of AirBnB in some cities throughout the United States but some great places still exist. But why is AirBnB a Good Investment?
Short term rental market is growing
The short term rental market which includes AirBnB properties among others is expected to grow 7.9% annually. AirBnB rental properties are becoming more and more appealing to vacationers and travelers, as they offer several advantages when compared to traditional hotel rentals.
As AirBnB grows in popularity and attracts more and more guests, buying a vacation rental property seems like a reasonable investment in cities where AirBnB is not heavily regulated. As an AirBnB investor, you should aim to find an investment property in a prime location that guarantees a high occupancy rate throughout the year.
Higher rental income
The potential for profits is higher in AirBnB rentals than regular month-to-month rentals or those with a long term lease. This is because Airbnb rentals are rented out on a nightly basis and the price per night is much higher than that of a long term rental. Even when taking into consideration several factors such as vacancy cost and occupancy rate, your AirBnB investment would still make more profit.
Location, Location, Location.
When it comes to owning an Airbnb rental property, location is the decision maker of how profitable your investment will be. AirBnB guests value proximity to amenities and attractions. Therefore, when searching for AirBnB property to buy, you should take into consideration who will be renting your home.
Make money on your Vacation or 2nd Home
A major advantage of owning an AirBnB property is that you can use it as your secondary residence where you can spend your vacations. Part-time real estate investors find this convenient as they can earn money from a property and still be able to use it whenever they want. AirBnB allows you to choose which dates your rental property is available, something you cannot do when following a long term rental strategy.
Example of Cities to Avoid When Investing in Short Term Rentals
- New York City, NY
- San Francisco, CA
- Santa Monica, CA
Example of Cities for Airbnb Investment where Operating a Short Term Rental is Acceptable
- San Antonio TX,
- Phoenix, AZ
- Fort Lauderdale, FL
The Bottom Line
To start looking for and analyzing the best AirBnB investment properties, call or text Wayne at 408-981-5715
Here are the previous strategies for your reference.
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