Is Airbnb Investment A Good Investment This Coming Year?

We have already discussed real property investment here and how lucrative it is as a passive income stream. Indeed, a lot of people took interest in buying a property in a strategic location and having it rented out as an apartment or commercial space for a long time. However, Airbnb investment is slowly becoming a thing in the market, too.

Beginners in real estate investing have taken interest in Airbnb investment. Let's figure out what makes it the next big thing.

Airbnb investment is a new kind of real property investment where you rent a part or the whole of your property by listing it on Airbnb. It’s one of the best strategies for people who own multiple rental properties and do not really stay or use such on a regular basis. 

In a traditional rental strategy, properties (well-furnished home, apartment, room, or a condominium unit) are rented on a long-term basis, usually for a minimum of 1-year and occupants are those will make it a residence for a long time. Airbnb are short-term rentals, usually occupied by those on vacation. Traditional lease/rental agreement are paid per month, while Airbnb are priced at a per night rate.

Airbnb investment can generate more income than that of the traditional rental agreement. That’s because in the latter, the rate of the rental property usually stays the same per month if the rate increase is not stipulated in the contract. In Airbnb rental, owners can charge more per night during peak season and according to the location of the property. 

According to a research study from Earnest, an Airbnb host earns around $924 per month, with a median of $440 per month. It’s pretty decent and it has the potential to be a lucrative source of income, depending on your property’s location, neighborhood, and the overall look and comfort of the property itself. Besides, the host will be the one to set the rate. There is a service of only 3% but it may be higher if hosts want to use additional policies from Airbnb.

Airbnb investment is perfect for those who have rental properties preferably near tourist destinations. Guests are those who are on vacation, usually families or groups of people who would opt for the flexibility of an Airbnb rental rather than an expensive hotel room.

To start this Airbnb investment, you need to research about the neighborhood where your property is situated. What destination or places near it that might appeal to your potential guests? Some Airbnb rentals are situated far from the city with an overlooking view of the sea or with a mountainous view. Take note that there are certain local governments which have strict laws and ordinances on Airbnb listings. You might as well get your properties the necessary permits and licenses before you start this investment. 

Airbnb investment is not for all. You might need to spend a little at the beginning to obtain permits, make your rental property desirable or to give it some improvements to make it appealing to potential guests. Some investors buy a property situated in a good tourist location and renovate it for the sole purpose of putting it on Airbnb. However, it can be a very lucrative income source, considering that the economy and tourism around the world are slowly getting back to normal and people are excited to go out on a vacation these days!