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Is Buying an Airbnb a Good Investment?

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Submitted by Clinton Lu, TFS Properties

Airbnb is growing increasingly popular, with around 46 million users in the US alone. It might be tempting to buy a rental property and rent it out on Airbnb, but is buying an Airbnb a good investment?

Before deciding to find tenants on Airbnb instead of getting traditional long-term tenants, it’s essential to weigh the pros and cons. Here’s what you need to know about the pros and cons of investing in an Airbnb vs. renting to a traditional long-term tenant.

The Advantages of Using Airbnb as an Investment Strategy

With travel picking up again, many real estate investors are again looking to buy properties and rent them out on Airbnb instead of renting to traditional tenants. Here are the primary advantages of investing in Airbnb rental properties.

It May Be More Lucrative

Long-term rentals typically have monthly rates. On the other hand, a short-term rental can have a nightly, weekly, or monthly rate. Instead of charging $1,500/month, you may be able to charge $100/day ($3,000 for a full month), potentially doubling your income. You can even charge extra for cleaning fees.

Furthermore, you may be able to increase your income by offering tours or other services associated with your Airbnb experience. If you can’t provide them yourself, you may be able to refer them to a tour agency in exchange for a commission.

You Have More Flexibility

As an Airbnb host, you have more flexibility over your property. You can block your calendar if you want, so you can stay there yourself. You can even use it as your primary residence and rent it when you are on vacation.
Not only that, but you can offer both short and long-term rentals. For example, you can limit stays to five days, or you can have a two-night minimum. In all, renting your property as an Airbnb offers more flexibility in how you or your tenants use it.

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You Won’t Have to Worry About Collecting Payment

Dealing with a single tenant is hit-and-miss. Some tenants are fantastic, while others don’t pay on time. Fortunately, Airbnb handles all payments on its platform and collects payments for you.

Sure, some tenants might cancel at the last minute, but only if you offer a flexible cancellation policy. From our experience working with Airbnb owners, only a tiny percentage of your guests will ever give you issues.

The Disadvantages of Airbnb Investments

Is buying an Airbnb a good investment? Relying on Airbnb for rental income has some disadvantages compared to a traditional rental property. Like with any other investment, it’s best to know the good and the bad before you decide to go with any one strategy for your property.

You Have to Furnish It and Pay for Amenities and Services

Furnish the property with tables, chairs, and beds and also pay for water, electricity, internet and potentially more.

For traditional rentals, it’s not difficult to find long-term tenants willing to rent an unfurnished apartment, as they typically have furniture or expect to buy some. Furthermore, they will have to pay for their own amenities and services like gas, electricity, water, internet, and cable.

Your initial investment as an Airbnb host is higher. It’s not enough to buy a home; you must also furnish it. And if you want good reviews and return visitors, you shouldn’t cheap out and purchase low-quality furniture or bedding. The bed obviously has to be comfortable, and the more stylish your place is the more likely your tenants are to enjoy the experience – and tell friends about it. Adding decorations and making the place as cozy as possible will get you more guests and better reviews.

In addition to furnishings, you will have higher ongoing costs as an Airbnb host. You will need to pay for electricity, water, gas, air conditioning, and internet. Cable or TV streaming services are optional, but we highly recommend adding such amenities to your Airbnb experience. Some guests will use more water and electricity than others. All these are additional costs an Airbnb investor should expect to incur.

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You May Not Get Many Guests at First

There are many factors to consider when deciding whether Airbnb would be a good investment. The first is how popular tourism is in your area. Is tourism popular all around the year, or is there only a high demand during specific months? Airbnb can be a seasonal business, so you have to consider whether it’s worth losing long-term lenders.

Furthermore, attracting guests at first can be difficult. If you have a new listing with no or few reviews, people will naturally be hesitant to book with you.

Here are some tips to help you get started with a fresh Airbnb:

  • To begin, you may need to offer discounted rates and ensure your listing promotes your place well to counter this hesitation.
  • Invest in professional, high-quality photos to make your online listing shine.
  • Respond to all inquiries timely. And be polite, professional, and friendly in all communications with prospective tenants.
  • Answer any questions guests may have honestly. Guests often ask more questions when considering places with no reviews, as they want to make sure the home and host are legit.

How to Find a Good Airbnb Rental Property

Whether you’re working with a real estate agent or buying directly from sellers, there are a few factors to consider before deciding that a property is worth renting on Airbnb.

Is the Area Central and Safe?

Tourists coming to a new city don’t want to stay far outside the city center. They may be unfamiliar with the public transport system, and if they’re flying in, they may not have a car. If the property is close to the main attractions or if there is an easy way to get there by public transport, it would make a good Airbnb.

The area should also be quiet and safe, if possible. People will mention safety and noise issues in the reviews, so make sure to scout out your property’s neighborhood and surroundings before making your decision.

What Are the Local Laws About Airbnb?

Some cities have laws targeting Airbnbs. In San Francisco, you can only rent out your primary residence (a place you stay at least 275 nights per year). That makes investing in Airbnb properties impossible. Lawmakers create those laws to avoid driving up the real estate market.

Even if there aren’t any laws against Airbnbs, the building’s management company may forbid Airbnb rentals. That’s because some Airbnb guests are loud and bother the long-term tenants.

Before investing in an Airbnb, make sure that the city isn’t considering any laws regulating short-term rentals, even if no regulations currently exist.

Is It a Touristy City?

Not all of your guests will be tourists. Some will be people who stay in the city for business for a few weeks or months. Others will be digital nomads. However, running an Airbnb will be problematic if the town is not touristy at all. Ultimately, most Airbnb tenants are travelers and tourists, so you’ll need to make sure your location attracts these common types of guests.

*Read More: Airbnb Investment Property Guide for Beginners

Tips for Running a Successful Airbnb Business

If you decide to buy an Airbnb property, follow these tips to increase your chances of success. Remember, running any type of business requires dedication, risk management, and hard work.

Calculate Your Expenses

Calculate both your initial startup expenses and any ongoing expenses. Your startup expenses will include the cost of the property, any necessary repairs, furnishings, and decorations. Ongoing expenses will consist of utility bills, taxes, and Airbnb commissions.

By calculating how much money you have to invest, you can figure out what to charge your guests and how long it will take to recover your initial investment.

Plan for the Low Season

It’s also important to calculate the best-case and worst-case scenarios regarding occupancy rates. If your city’s tourism industry is seasonal, you’ll need to charge more during the high season to offset your losses during the low season. You might also block the calendar for half the year and rent to a traditional short-term tenant for six months. An Airbnb investment’s flexibility means you can make these kinds of decisions as you go.

Always Provide the Best Customer Service

Your success as an Airbnb host depends almost entirely on the level of customer service and support you provide. You’ll need to always be on hand to respond to guests when they have issues, whether they are having trouble with the Wi-Fi password or there is a leak in the bathroom.

Consider getting a friend or partner to manage your listing with you. Airbnb allows you to add co-hosts to your listings, which is necessary if you are busy at work most of the day and can’t respond to guests.

Be friendly — and never rude to guests. Small hospitality touches like leaving a plate of cookies or fruit on the table make a big difference. Ask customers for reviews, but don’t be too pushy about it. Leave customers reviews to encourage them to review you (per Airbnb policy, they won’t be able to read your review until they write one themselves or until two weeks pass).

Be Flexible When Starting Out

To get more customers, offer discounted rates at the beginning. Also, offer a flexible cancellation policy. Though most customers won’t end up canceling, giving your guests that flexibility is an attractive amenity that people appreciate. After you get enough reviews, you can switch to a stricter cancellation policy.

Offer Weekly or Monthly Discounts

Sometimes, you can increase your profits by encouraging weekly and monthly rentals. Airbnb allows you to offer discounts for longer-term stays. Monthly stays work a bit differently on Airbnb. For example, they have less flexible cancellation policies. Read up on Airbnb’s policies and recommendations on their site for more info on the differences on daily, weekly, or monthly stays to best plan your offering.

Create a Professional Listing

Create a listing that fully details the apartment, its amenities, and the location. Take professional pictures showing the house or apartment from multiple angles, and try to be welcoming and friendly. Use your profile picture instead of a business logo. After all, Airbnb is all about personalized, human-to-human connections.

Work With a Real Estate Agent

Our real estate agents specialize in finding Airbnb investment properties to existing and new hosts. At TFS Properties, our professionals have a track record of success with our clients. Here are just a few highlights:

  1. Our Airbnb’s produces a passive 8-12%+ Net Cash Flow
  2. Our Airbnb’s are a passive investment option. We will help you find the property, buy it, design it, and place it into one of our property management team’s Airbnb super host accounts to help you start earning money right away. We also use dynamic pricing and adjust the price of the Airbnb based on what events are being held or if there is a major holiday. During these times our team will up the price of your rental ensuring the highest possible profit from your Airbnb.
  3. From acquisition to booking the Airbnb we can take care of the client from A to Z.
  4. Our team spends countless hours researching which markets across the United States are good Airbnb markets and will use this information to help guide our investor’s purchases.
  5. After everything is set up, our property management team will take care of issues that arise and manage your reservations for you. All the investor has to do is log into their online portal and see how their investment is doing.

Work With Us

Final Thoughts

So, is buying an Airbnb a good investment?

While Airbnb requires a more significant investment upfront than traditional renting, it also offers more flexibility and the potential for greater earnings. Ultimately, several important factors, such as the area and tourism industry of the city, will decide whether buying an Airbnb property is worth it.

Do your research, scout your location, and provide a great Airbnb experience – and you will be earning returns in no time.

What are corporate rentals?

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Image from Pixabay

Corporate rentals are rental properties that serve a variety of travelers. These rentals are fully-furnished properties with more amenities than a hotel may offer. Often, the property will have premium upgrades that a basic hotel room cannot provide. Such amenities include:

Image from Pixabay

  • Refrigerators
  • Cooking appliances
  • Fully furnished dishware and cooking supplies
  • High-Speed Internet
  • Television
  • Office space
  • Washer/Dryer
  • Extra linens
  • Gyms or workout areas

The idea is to provide a “Home away from home” feeling. Providing a comfortable space is beneficial to both the traveler and the employer.

Who should rent corporate rentals?

Image from Pixabay

Often corporate rentals are intended for executive travelers or business employees, and the employer will routinely pick up the tab. While an employer may often be the payee, other entities may also foot the bill, including insurance companies, armed services, or event coordinators.

Families seeking housing in place of hotel rooms often choose corporate rentals for their vacation getaways. The cost and the amenities are often a wiser choice than the standard hotel experience.

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Corporate housing is an ideal option for:

  • Healthcare workers, nurses, traveling doctors, etc.
  • Project managers, construction crews, energy personnel
  • Entertainment industry workers, actors, performers, singers, stage workers
  • Military service members, relocating family members
  • Victims of disasters, such as floods, fires, tornadoes, etc.
  • Medical patients in long-term treatment
  • Employee relocation

Image from Pixabay

Costs

Depending on the location, the size of the place, and the length of your stay, typically, you may see higher costs than an unfurnished room, apartment, or home.

Corporate rental companies often offer better rates for lengthier stays. The longer the visit, the better the deal, and monthly rates are a better option than paying daily or weekly. Booking in advance also may give you a break in terms of costs.

Other costs to factor in are any special needs or accommodations you may have during your stay. If you have extra persons, small children, or pets, you may need to pay additional fees.

Where can I find Corporate Housing?

Image from Pixabay

You can find corporate housing in just about every major city in America and abroad, and Airbnb is a popular choice. You may just want to Google search: housing+the corporate town and state you will be traveling. You may find ads in popular real estate magazines, blogs, or popular travel booking sites.

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Holly Lynn is a Short-Term rental expert, an Airbnb Magician, influencer, model, traveler, and business networker.

Learn live and in real-time with Realty411. Be sure to register for our next virtual and in-person events. For all the details, please visit Realty411Expo.com or our Eventbrite landing page, CLICK HERE.

Airbnb.org is Assisting Afghan Refugees

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Airbnb’s nonprofit organization, airbnb.org, is stepping up to the plate once again to assist, this time, Afghan refugees with temporary housing worldwide.

The humanitarian crisis has displaced tens of thousands of people from Afghanistan. Both Airbnb and Airbnb.org have announced that they will be providing temporary housing to more than 20,000 Afghan refugees globally.
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In times of crisis, airbnb.org had partnered with communities to help with housing when most needed. Since 2012, airbnb.org has found accommodation for over 75,000 people. Hurricanes, fires, Covid 19 frontline workers, and Afghan refugees are just some of the hard-hit communities needing support. Airbnb and Airbnb.org are collaborating with resettlement agencies and their partners to help wherever necessary. They are reaching out internationally to businesses to encourage a united front to provide urgent support to the Afghan people.
Brian Chesky, founder, and CEO stated, “As tens of thousands of Afghan refugees resettle around the world, where they stay will be the first chapter in their new lives. For these 20,000 refugees, my hope is that the Airbnb community will provide them with not only a safe place to rest and start over but also a warm welcome home.”
Airbnb and Airbnb.org have linked approximately 25,000 refugees with temporary housing over several years, including the Afghans and Iraqi people participating in the US Special Immigrant Visa Program (SIV). Airbnb.org announced the creation of the $25 million Refugee Fund to expand their support of refugees and asylum seekers worldwide significantly. Airbnb is confident that hosts and guests around the world will be anxious to rise up and uphold this massive effort – and in the very near future, Airbnb and Airbnb.org plan to give hosts and the community details that will support the cause. For more information about how to become a host and join the efforts, visit their website at airbnb.org.

Holly Lynn, Queen of Capital™, is an Airbnb Magician and a short-term rental manager. For more on short-term renting, contact Holly at [email protected] or by text at 415-317-6071

The Latest “Spooktacular” News about Airbnb

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Image by Myriam Zilles from Pixabay

By Holly Lynn

Enjoy these treats while they last!

If Halloween decorations, costumes, and a smoky punch bowl are in the forefront of your mind for a great party, keep Airbnb off of your list of potential party spots for the holiday weekend.
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Image by Alexas_Fotos from Pixabay

In an announcement made by Airbnb, they are prohibiting large gatherings in an effort to do their part in the spread of Covid-19. Airbnb has stated that they will also bring legal action against certain unauthorized parties. This announcement comes a year after the shooting of five young people at a home–listed on the Airbnb platform– in Orinda, California.
Airbnb posted on their website, “To strengthen our hosts’ protection against parties amid concerns about a second wave of the pandemic, today we’re announcing that we’ll be prohibiting one-night reservations over the Halloween weekend in entire home listings in the United States or Canada. Further, we’ll bolster our existing protections and technologies aimed at stopping as many large gatherings as possible that weekend.”
Starting October 2nd, guests will be unable to book entire homes for a single night on 10/30 or 10/31 in the United States and Canada. For previously booked reservations on these dates, Airbnb will cancel and reimburse the guest. However, hosts that have confirmed bookings will receive a full payment. In addition to the rigid restrictions, Airbnb will be implementing technology that will curtail guests that try to book last-minute, who live locally and do not have a positive history on the platform.
Airbnb also asserted, “Also as the weekend approaches, we plan to remind guests making successful reservations to take place between October 28 and November 1 that parties are not allowed in listings. They will also be required to attest that they understand that they may be subject to removal from Airbnb or legal action if they violate Airbnb’s rules on parties.”
Airbnb will be beefing up their neighborhood support line to take calls throughout the weekend to respond to any issues from hosts and neighbors. With pandemic numbers on the rise and the recent rise in civil unrest, Airbnb is striving to protect hosts, guests, and neighborhoods from unnecessary problems and to keep everyone safe.

Holly Lynn, Queen of Capital ™ is an Airbnb and Short-term Rental Management Professional, author, and media influencer. She can be reached at www.hollylynn.com or by email at [email protected].

To short-term rent your property, you can text her at 415-317-6071.

Back in Black/Airbnb is on the Upswing

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By Michelle Corsetti

At the beginning of the Covid-19 Pandemic, Airbnb occupancy rates dipped significantly as people opted to cancel their travel plans. Also, many counties put into place restrictions stopping Airbnb rentals from operating. Some counties restricted all but first responders and essential workers from renting Airbnb locations.

business-2904770_1280However, as of May 28th, there has been a 17.1% increase in occupancy rates. Overall, Airbnb is still down for the year but is hopeful as some restrictions are lifted. The good news is that places with smaller populations are gradually picking up the pace. People are venturing out to get rid of the lockdown blues.

According to Pittsburgh Action News, most rentals have been within 50 miles of home. Since traveling abroad has been halted to a standstill, people are having mini-vacations close to home.

While some people are optimistic about the increase in bookings and sales, others are opting for a more drastic change. CNN reported that some Airbnb hosts are giving up on their short-term rental properties and are proceeding to sell.

new-home-1530833_1280These hosts report that because of loss of sales and income, they are planning on selling not just their properties, but their furnishings as well.

Other hosts are changing from short-term term rentals to long-term rentals to compensate for the loss.

Only time will tell what the real impact of COVID-19 has on Airbnb and other short term rental platforms. As of now, while slow, things are looking on the upswing.

Holly Lynn is still very busy in business as a short-term rental expert and host. If you need your property rented– short-term or long-term, she can do for you what she does best–make you money!

For more information or booking, contact Holly at [email protected] or 415-317-6071.

Covid-19 and Airbnb

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By Holly Lynn

The outbreak of the Covid-19 Virus has put a damper on short-term rentals around the world. With travel restrictions tightening the necks of travelers; Airbnb is experiencing a downturn in rental stays. Especially in affected areas.

Airbnb has reformed its cancellation policy to both hosts and travelers. If you are an Airbnb host, you may experience a fluctuation in rentals and cancellations. Reviewing the updated policy is essential. Airbnb is also announcing More Flexible Reservations In Times Of Uncertainty. This is a program that Airbnb is developing to assist hosts and guests when situations like the Coronavirus outbreak happens and to help them cancel or postpone their plans.

airbnb-3399753_1280Along with these changes, Airbnb is also offering incentives for hosts who are willing and able to offer refunds on cancellations that would have otherwise been subject to charges. They will also provide promotions to boost listings and bookings.

As an Airbnb host, there are things that you can do to make the guests you do have to feel safe and assured that their accommodations are up to standards set forth by common sense and the World Health Organization or WHO.

Here are some ideas that may help you:

Post Hygiene Standards List

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  • Post proper hand washing techniques in the kitchen and restroom.
  • Clean your hands often
  • Wash your hands often with soap and water for at least 20 seconds especially after you have been in a public place, or after blowing your nose, coughing, or sneezing.
  • If soap and water are not readily available, use a hand sanitizer that contains at least 60% alcohol. Cover all surfaces of your hands and rub them together until they feel dry.
  • Avoid touching your eyes, nose, and mouth with unwashed hands.

Supply Surface Wipes and Sprays

spray-315164_1280Supplying surface wipes or sprays such as Clorox, Lysol, and Purell for daily cleaning of surfaces that are touched often as a preventative measure. These include counters, tabletops, doorknobs, light switches, bathroom fixtures, toilets, phones, keyboards, tablets, and bedside tables. Surfaces that may have blood, stool, or body fluids on them should also be cleaned.

Wash All Bedding, Linens, Towels, And dishes

Washing all bedding, linens, towels and dishes is important even if the guests did not use them. You can’t be certain if an ill guest has coughed or sneezed on a dish or a throw blanket. Better safe than sorry. Putting dishes in the dishwasher is extra work but satisfying knowing that you are doing all you can for the health of your guests. Assuring them that these practices are in place will give the next guest a feeling of security and comfort.

Provide Snacks, Coffees, Cereals In Single-Serve Size

coffee-791919_1280Providing snacks, coffees, cereals, and single-serve packaging will prevent cross-contamination. Using bins to hold oatmeal or coffee can spread germs from one guest to the next. In actuality, it should be practiced all of the time.

These are just some of the things that you can do to keep the coronavirus at bay. With ever-evolving information made available through sites such as NIH, CDC, and WHO, a daily check-in will keep you updated on changing information and areas affected.

Just remember that this too shall pass. We always bounce back from adverse situations. The human race is enduring.

If you need staging and Airbnb management, hard money loans, or private lending, email me at [email protected] or call me at 415-317-6071.

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Holly Lynn

Experienced Owner with a demonstrated history of working in the real estate industry. Skilled in Team Building, Television, Leadership, Marketing, and Digital Marketing. Strong business development professional who graduated from San Francisco State University, College of Business.

The Queen of Capital, Holly Lynn specializes in helping people with their real estate needs. She is a creative and results-driven resource who can help investors at every level.

Her authentic, personal relationships with both lenders and investors coupled with her vision, work ethic and endless desire to make the deal work position her as a sought-after, leader in the industry.

Holly Lynn can help you with hard money, private financing and other funding for your investments and projects.

She is a self-taught deal maker who has always had a keen business sense. She works with investors and syndication across the board who are looking for real estate investments that produce passive income streams.

She built B.A.M.F into the single most recognized name that is designed to build strong relationships and invest in multifamily projects to create massive cash flow and wealth. B.A.M.F monthly meetups in San Francisco, San Mateo, Fremont, San Jose and those conducted through webinars are open for everyone. As the multifamily properties continue to be an investment megatrend, She gives everyone an opportunity to learn about multifamily property investments and opportunities that would only be otherwise available for top dealers and those who met the qualifications by SEC. But through B.A.M.F, you can meet with experts and deal organizers who can provide you with great investment options.

Holly’s reputation has been earned one transaction at a time with no substitute for hard work and honesty. Take advantage of her deep proven experience in the real estate and investment market by joining her events and mixers. Mixers that are organized by B.A.M.F is sought after by reputable individuals in the investment and finance field. It is your chance to learn and grow.

“I have always believed that your money is waiting for you, but you have to keep yourself open to receiving it.”

– Holly Lynn –