Airbnb Properties as Investments

In 2008, a company called Airbnb came into existence. Within a decade, it took the world by storm, becoming an international powerhouse. Investors quickly realized another potential income source. Continue reading to find out more about investing in short-term rental properties.

What Makes Airbnb Different from Traditional Property Investments?

It used to be that the only way to make income off a residential property was to own a single or multi-family home and find reliable long-term tenants to rent the property. This process included actually finding the tenants, which meant that the property could be unoccupied for a long period of time, causing investors to lose money. Traditional properties also meant that owners were responsible for maintaining the home. With some tenants being less than ideal, this could end up costing investors even more. The final issue with traditional properties is that tenants could end up being flaky and skipping out, leaving the owner footing all the bills.  All these issues are resolved when it comes to Airbnb rentals.

The Pros of Airbnb Properties as Investments

You don’t need a separate property.

With Airbnb, you can actually choose to rent a room, garage, or basement in your existing property. This allows you to recoup some of your monthly housing expenses without having to invest in another property.

You’re protected from damage.

Airbnb rentals are protected by up to $1 million for hosts. Pictures of the damages are required as proof but the protection is there, which gives hosts peace of mind.

It’s easier to find renters for short-term stays.

While this largely depends on your location, it’s typically easier to find renters for a few days as opposed to a year or more. Airbnb also makes your property visible to more potential renters through their platform.

Guests can be held responsible for cleaning fees.

Guests are used to being charged for cleaning fees associated with Airbnb rentals so cleaning and maintenance fees are typically covered in their contract when they book through Airbnb.

You can rent to more than one guest at a time. 

You can choose to split your property into multiple rentals to maximize your profits. You can divide your house by floors, separate rooms, or any other way to rent to multiple people.

The Cons of Airbnb Properties as Investments  

Airbnb isn’t exactly passive.

With Airbnb rentals, you’ll need to facilitate guests’ arrivals and departures regularly. You’ll also need to deal with any issues that may arise. With frequent guests, this means you might be busier than you would be with traditional rentals.

Some cities have strict regulations.

Many cities have strict regulations when it comes to short-term rentals. Before investing in an Airbnb property, it would be wise to check the laws and regulations in your area. 

More guests, more risk.

It’s simple statistics: the more people you allow into your home, the better the chances are for inviting trouble. It’s one thing to vet a family for a year rental or longer. It’s another thing entirely to vet 30 or more people that’ll be occupying your property over the course of a year. 

Is an Airbnb Property Right for you?

Purchasing an investment property is a great way to earn a second income. However, before deciding whether to purchase a property for traditional or short-term rentals, you need to weigh out the pros and cons. While a short-term rental property isn’t for everyone, there’s some good news: Majestic Vacation Management can make the process simple and easy. At Majestic Vacation Management, we handle your vacation rental for you. From location consulting and security to cleanings, home staging, linen service, and more, we’ve got you covered. Contact us for more information.