Are you interested in investing in an Airbnb but wondering what it takes to get started? In this post, I’m going to walk you through some crucial do’s and don’ts when it comes to the Airbnb business. Besides making sure you have money saved up for a down payment, you’ll need to check off some other key boxes if you’re going to make Airbnb a lucrative venture.
Here are my do’s and don’ts for investing in Airbnb’s!
DO Check Local Laws
One of the first things you need to do is to check local laws and regulations. Some cities have very strict requirements when it comes to renting out properties for side income. Some authorities require you to be a full-time resident of the city in order to operate an Airbnb. Other stipulations could include:
Be sure to do your research on local laws. Otherwise, you run the risk of harsh penalties including fines and even tenant evictions.
Here are some cities that make it very EASY to run an Airbnb:
Whatever location you choose, double check with the county before doing anything.
DO Choose a Strategic Location
99% of your tenants will be coming from out of town. You may have a few locals every now and then who need a place to crash for a few nights, but most of the time, you’ll be serving people who are visiting. Make sure the location of your Airbnb would be attractive to them. Consider popular tourist areas, concert venues, sports complexes, and wedding venues. Think about what people come to your city to do, and pick a location strategically.
You should also consider the establishments around your Airbnb. Are there good restaurants, coffee shops, grocery stores, parks, nightlife within walking distance, etc? Having food and fun things to do close by can be a huge selling point on your Airbnb listing.
DO Run the Numbers
Of course, you need to run all the numbers before you pull the trigger on your investment. You want to have solid data for revenue and occupancy projections. This will all depend on the location of your Airbnb. There are a few tools available that can help you run projections, like AirDNA MarketMinder, but you must have a subscription to view the data. You could also work with a real estate agent from that area who can help you gather data.
You will need to factor in:
DO Make it Attractive
The appearance of your Airbnb will play a huge role in its rentability. That doesn’t mean you have to turn it into a Chip and Joanna Gaines masterpiece, but you do need to put some effort into cleanliness and aesthetics. Make extra effort to make the kitchen and bathroom spotless. If those areas look clean in your photos, it signals to potential renters that the owner keeps the home in good condition.
You should also spend some time and money on the interior design and decoration. If you’re not naturally good at this, you probably have a friend who is and who would love to help you. Consider things like overall style, furniture, art, plants, rugs, dishes, etc. Making things look beautiful and pleasing to the eye will help you get more business down the road.
DON’T Get TOO Caught up in Decorating
While you want to make your Airbnb look appealing, you don’t want to get too caught up in decorating – especially at the beginning. If you spend a lot of money on furnishings, you will have to price your Airbnb higher. It’s better to start simple, and as you get a feel for the demand, you can invest more in the aesthetics and increase your price if you want to. The last thing you want to do is overestimate your audience’s taste and budget and end up with a low occupancy rate.
DON’T Skimp on Photography
Professional photos will make your Airbnb stand out and get more views. A good photographer can provide quality photos with good lighting and appropriate angles. I do not recommend photographing the space yourself. Hire a professional photographer who is experienced in photographing real estate. Taking pictures of homes is much different than taking family portraits, so do your research and hire someone with good real estate photos in their portfolio.
Airbnb can be a great investment if you have the right strategy and location. I hope these do’s and don’ts help you understand the process of starting an Airbnb. When you look at all of the relevant information, you can make a better decision about pursuing Airbnb as an investment opportunity. If you’d like to learn more about making money with real estate, watch me explain another popular investment strategy!
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