There are a wide variety of ways to invest in real estate. One very popular one these days is to buy a property to put on Airbnb. It’s geared toward people who are looking for short term rentals. It can be way more profitable than renting out to long term tenants and more fun as well.
You do need to get a few things right to be able to make money, however. It isn’t as easy as scooping up some deals on a cheap property and then listing it. There is more to it to be able to make it a viable investment and even a business.
In this article, we will go over what it takes to make money buying real estate and renting it out on Airbnb.
Think about location.
Everybody knows that location is important when investing in real estate. However, the location being good or bad is somewhat unique to Airbnb since the factors are different for each one. In fact, you may find that you have to buy rather far from where you are now if the criteria are not available where you were planning to buy.
You need to make sure to look in an area where there is a highly developed tourist infrastructure. Look for proximity to tourist sites with lots of amenities such as restaurants and public transportation nearby. If you have to buy in another area to meet these needs then look into hiring the best landlord property management Toronto has to take care of the property if it is too far for you to manage yourself.
You could also look for areas where there is a convention center or other business-related infrastructure that attracts business travelers. They will also be looking for short-term rentals and usually avoid hotels since they want to be able to cook if they are staying for more than a few days.
Pick the right type of property.
There are definite trends that happen with Airbnb rentals. They are mainly centered around the attraction to a certain area. This means that each tourist area is going to be unique in its own way with regard to who is the predominant type of traveler. It is your job to match the type of property with the needs of the average traveler.
For instance, if there is an amusement park nearby then most of the renters will be families. This means that you will need to have a large apartment or house that can accommodate them. Buying a small studio apartment won’t get rented out much in this scenario.
Price it right.
Understanding the market is also important so you can price the unit to make as big a profit as possible while not overcharging. Overcharging will result in it not being rented out much. Undercharging leaves money on the table. Research what the average price is per night for the same type of property in the same area to understand what you should be charging.