Buying an Airbnb property can be an excellent way to boost your income. Short-term rentals are growing in popularity and more than 150 million people around the world use Airbnb to book their stays.
But how do you find the right property for your investment?
And how can you maximize your Airbnb earnings?
We’re here to guide you through the process. With these tips, you can be well on your way to starting a successful Aribnb business.
5 Steps: How to Buy An Airbnb Property
When buying an Airbnb rental property, there are five key steps that will set you up for success. You must select the right location, familiarize yourself with Airbnb regulations, set a budget, and then choose the perfect property.
Let’s dig into what each of these steps can look like and why they’ll set the tone for how your Airbnb performs in the long run.
1. Pick The Right Location
With short-term rentals, location is everything. The usual tempting locations include downtown or areas close to the place where major events are held in a city.
You can also use a heat map analysis tool when buying a house for an Airbnb. It will provide insight into how potential visitors think and what are the most popular neighborhoods. By buying an Airbnb rental property in a desirable area, you can maximize the occupancy rate and boost income.
If you’re looking at buying an Airbnb investment property in Texas, we’ve already identified some of the best neighborhoods to invest in San Antonio, the best areas in Houston for Airbnb, and the best short-term rental markets in Waco, Texas.
2. Get to Know Airbnb Laws And Regulations
Before buying an Airbnb, it is important to get to know local laws, as well as the regulations of this platform. Depending on your location, you might need a license before you can start a business. Within Texas and Oklahoma, most local cities do not require a specific license to own a short-term rental and list it on platforms like Airbnb.
However, it’s always important to consult with a licensed CPA familiar with local laws and work with a licensed Real Estate Agent who understands the local short-term rental market. Remember, if you fail to comply with the laws, you could pay huge fines, which can compromise your profit.
Don’t forget to read the Airbnb regulations to learn the details of how the platform works and host expectations there as well. Failure to comply with the Airbnb Hosting Ground Rules could get your listing removed, reducing exposure opportunities for your online listing.
For example, all hosts are required to pay a small fee and they are required to meet cleanliness standards.
3. Determine Your Budget
Another thing to do before buying an Airbnb is to determine your budget. When setting a budget, it is crucial to consider that the listed price might not be the only expense. You might face hidden charges like closing fees, inspection, insurance, property tax, ongoing maintenance, and more.
Considering the Airbnb Ground Rules we mentioned above, as a future host, you need to factor in expenses such as fees, Airbnb interior design services that will make your listing guest-friendly and more appealing, Airbnb maintenance services to upkeep the property, and Airbnb cleaning services that don’t just meet Airbnb standards but exceed guest expectations.
These things can be difficult to do yourself, which is why we recommend working with a full-service short-term rental management company that takes care of every part of your Airbnb business, so you don’t have to. An experienced team like Square House will save you time, money, and stress when it comes to your investment property.
4. Choose From a Few Properties
Once you have your budget ready, it is time to hit the housing market. You can use a property finder tool, conduct an online search, or work with a local Real Estate Agent.
It is important to establish specific criteria when buying an Airbnb. Apart from finding the best possible location you should also consider the following:
The Number of Bedrooms in the Property
Are you buying an Airbnb property to cater to couples or families? Do you want a large or small apartment? Are you looking for one or more bedrooms? And what kind of layout do you prefer?
Working with a Real Estate Agent that has experience in the vacation rental market will help you answer these questions. They’ll help you find homes that are most likely to get rented out.
The Current Property Condition and Age
Is the property a fixer-upper, or a new build? Are there major repairs that need to be made? What other smaller repairs are required to turn it into a functioning vacation rental?
Buying a house that needs work could save you money initially, but can cost more in the long run. Meanwhile, old houses and buildings often add historical charm, but they might require additional investment in upgrades and repairs.
You’ll want to thoughtfully weigh the pros and cons of these different scenarios before buying a house for Airbnb.
The Sale Price vs. Nightly Airbnb Rental Prices
The cost of the property should meet your determined budget. You and your Real Estate Agent will need to carefully evaluate the local average Airbnb nightly rates, average occupancy rate, projected increases in housing pricing, and more.
5. Work With a Professional Airbnb Management Company
Still not confident about buying a house for Airbnb on your own?
This is where it can be really beneficial to work with a full-service company before buying an Airbnb property. They’ll help you plan profitability from the start, with a set process for helping you maintain and grow your investment over time.
And though physically buying an Airbnb is certainly going to be your largest initial expense, a company like Square House will also help you plan for and do other important things for your investment, like…
Purchasing new furniture to maximize guests’ comfort.
Buying appliances and devices like smart TVs and irons.
Installing safety investments, such as security cameras or digital entry systems.
Ensuring there are enough toiletries, towels, pantry staples, etc.
Paying for Wi-Fi and other premium services.
Arranging cleaning services.
Paying your utility bills for electricity, heating, etc.
At Square House Property Management, we specialize in full-service Airbnb property management in Texas and Oklahoma. We’ll manage every aspect of your Airbnb so that you can get the maximum return without worrying about unexpected costs.
As a licensed Real Estate Agent, a member of our team can even help you choose the perfect investment property!
Contact us today to get started.
FAQs
Is it worth owning an Airbnb?
We have many people asking us: “Is Airbnb a good investment?” And the answer is yes!
Short-term rentals have the potential to generate higher returns than long-term rentals. However, it’s important to analyze the property demand in your area and work with experts to ensure you’ll be getting the best return.
Is it hard to own an Airbnb?
Owning an Airbnb does not have to be a lot of work, especially with the help of an Airbnb property management company like Square House. We’ll manage every aspect of your Airbnb, including guest hosting, cleaning, property upkeep, marketing, and more so that your property can be a truly passive investment.
What is the best type of property for Airbnb?
The best type of property for Airbnb depends on location, market demand, and your goals as a host. Generally, properties with desirable features such as a central location, unique design, or access to amazing amenities tend to do well. However, it's important to research the local market and consider factors such as zoning regulations and competition before making a decision.