Vital AirBnB Investment Trends For Newbies

Dated: July 16 2020

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Considering the buzz around Airbnb, it is understandable why more people are getting into real estate investment. But, as a newbie in the short-term rental business, you have to understand some conditions which you must always keep in mind.

As the Airbnb is expected to continue growing in this year, there is a need to always stay on top of the game. You have to know what might happen at any time so that you can determine where and how to engage in vacation rental investment.

3 Current Airbnb Industry Trends

Below are the four significant trends which you should know about Airbnb real estate investment in the US housing market.

Increase in Investor-Owned Properties

In the short-term rental industry, Airbnb has taken over to the extent where people consider it as the default platform for vacation rental. Over the years, the Airbnb industry has developed impressively as its rental property can be found in more than 85,000 cities globally. Although Airbnb began as a simple means for homeowners to generate extra cash by renting their extra rooms for a short period, the industry has grown beyond that. From such a humble beginning, the Airbnb industry has developed into a massive sector with a market value exceeding $30 billion. The massive growth of the industry can be attributed to the interest of the real estate investors in the high rental income, which is one of the features of the properties. Nowadays, people don’t just purchase vacation homes for personal use; they do so to own an Airbnb – it’s all about investment strategy.

The main reason behind such a plan is to achieve rental income. It has been forecasted that the short-term rental industry will generate a whopping $169 billion in revenue in 2019. In states such as California and Florida, the shift towards Airbnb investment properties is highly apparent as 7% of property owners having a second home in the US are found in California while 14% are located in Florida.

Airbnb Industry Growth Comes with Regulation

In the current year, most tenants occupying short-term rentals have come under serious scrutiny from the government. While the Airbnb helps generate a significant amount of money for the cities, as well as help promote their economy, there are areas of concerns. Majorly, the local neighborhood occupants and the hotel industry are suffering from the adverse effects. Also, the high saturation of the Airbnb industry in some communities worries their specific local governments. Consequently, the implementation of short-term rental regulations is now unfolding. While the rulings differ among several cities, generally, they have to do with caps on the amount of rental nights, specific host demands or limitations on locations where short-term rentals will be operational.

Furthermore, some regulators have been seen coming into the Airbnb industry to assess the issues of unrecorded taxes; however, most regions have an agreement in place when it comes to tax collection and remittance. Hence, as a newbie in the Airbnb industry, you are best advised to know the legality of the real estate investment in your specific housing market. Remember to understand state and city laws; some city’s councils have laid-down rules and regulations. While considering the possibility of joining the Airbnb industry, endeavor to be wary of cities such as San Francisco, Santa Monica, and New York City.

Short-term Rental Properties Produce Greater Cash Flow

When you work with the right markets, you have a high chance of generating big returns by participating in the Airbnb investments. Compared to what the long-term rental will generate monthly, the monthly rental income Airbnb is always higher because it will be hosting several short-term guests in a single month, despite being in the same market. Thus, investors in Airbnb industry tends to generate stronger cash flow.

Truthfully, in the beginning, Airbnb business can be quite tedious and demanding; however, it is highly rewarding. Speaking of getting a profitable investment in the Airbnb, you have to understand some critical performances. As a first-timer in the short-term rental investors, always remember that several factors determine the success of the industry, unlike as it is in conventional long-term rentals. First off, endeavor to look for regions where there is a high percentage of people coming and leaving, perhaps for tourism reason.

With correct information and tools to evaluate data, you can easily find a strong real estate market within the Airbnb industry. Short-term rental guests want shifting more To be a successful businessman or investor, you have to understand what your clients want – the same condition applies in the Airbnb industry. Ensure that you don’t just invest in a profitable real estate market, but a rental property where guests would love to live in, most especially if you are investing in a market where there is high competition. Advisably, try to make your short-term rental attractive to foreign guests – not just people from the neighborhood.

Check the following points on how to attract guests to your short-term rental property:

While advertising your Airbnb property, endeavor to add areas of attractions such as being close to downtown or areas of tourism.

Use many quality pictures in your listing. Accurate details about the rental property should be supplied in the listing.

Always ensure that your guests are satisfied and happy with your services if you want excellent reviews. Ensure that your contact details are readily available in case the guests need your attention. Whether as a DIY task or you will hire cleaners, endeavor always to keep your property clean. Don’t place excessive price on your Airbnb investment. Ensure that essential amenities such as bed linens, pillows, clean towels, among others are readily available. Some hosts do book three guests, knowing the available facilities will be sufficient for only one person – such services are ill-advised. To get ahead of the game in the Airbnb industry, endeavor to always consider the four trends listed herein. Otherwise, you will be left behind in the fast-rising short-term rental industry.

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