What is AirBnB?
Investing in real income properties is a sure way of growing one’s wealth faster and the benefits and risks associated with it have been covered well by the investment community. Investors are usually enticed by the fame of owning a coveted piece of property and the pledge of high rental yields. All that enthusiasm causes one to overlook the risks of high maintenance rates, adjustments to property management deals and seasonal differences in tenancy. Mitigating these risks is, however, possible.
Airbnb is a promising trend that provides an excellent opportunity to property owners and investors who want to invest in apartments and holiday houses, which have only been rented through online players and real estate agents before. A lucrative alternative to this arrangement is offered by Airbnb to help interested individuals expand their portfolio and receive great returns on their investment. Airbnb targets travelers who are comfortable living together with other renters or owners to stay in a nice and spacious accommodation at a price they can afford.
✔ Airbnb handles the payments, IDs, calendar, listings, etc. for a very small fee.
✔ You don’t have to screen people or find guests.
✔ Airbnb pays you directly.
✔ Airbnb has protections for you and your home
✔ No experience or technical skills needed
✔ Anyone can do this. Young, old, retired. Doesn’t matter.
✔ Getting started is a lot easier than you think.
✔ You can do this in your spare time even if you’re working 50+ hours a week.
✔ Get the best reward from the lowest risk
Traditional vs Airbnb:
Traditional says: You don’t interact with tenants as much. In fact, you might avoid each other. They may be fascinating tenants but you shouldn’t be getting new tenants every month, depending on the lease and number of properties you own.
Airbnb means fun. It’s not a boring job. You come to understand the fundamentals of customer service and hospitality. The customer is happy and you get rewarded through their reviews which generate bookings. You stay interactive with your property and make constant improvements.
Traditional says: Landlords don’t benefit from titles like “Superhost” from having great reviews and a high response rate. Landlords don’t get to stay in touch with their properties. They also don’t have the opportunity to build a reputation for themselves as easily as Airbnb hosts do.
Airbnb means making money! Ding, ding, ding! For some, this pro might trump all other pros and cons. Airbnb hosts who rent out their room have reported their income helping them with over 50% of their rent and paying their mortgage. Many Airbnb hosts have expressed making more money though their vacation rental than through traditional leasing. That might make you wonder, “they make more money, but how much extra work do they do?” Well, it doesn’t have to be all that much. A lot of things can be simplified using technology. There are apps for locking and unlocking your door, which make check-in and1 check-out easier. Creating a guide is a one-time thing that should be adequate for guests to make themselves comfortable. Finally, the Airbnb platform takes some part in answering inquiries for you but responding to an email shouldn’t be that dreadful.
Traditional says: Don’t always make more money.
Airbnb means playing with your prices. As an Airbnb host, you can take advantage of the weekends and high seasons by raising your price due to high demand and limited options.
Traditional says: Can’t raise your rent randomly on weekends or high season. There are other things you should know about becoming a landlord.
Airbnb lets you list your properties on the Airbnb for free and allows you to promote your property through photos with captions, descriptions, titles as well as a user profile where guests can get to know you. The best thing about investing in an Airbnb Investment property is that you can decide how much you would charge per night allowing you to control your monthly rental income.
You can also enjoy the flexibility of how often and how long your property is on the market. Receiving payment on time is never a problem and lower rental fee is another benefit to enjoy. Airbnb charges property owners three percent with payment made twenty-four hours after your guest arrives. You can read more about fees and limitations under the Airbnb Help Center section on their site.
Although there may be a few additional property management expenses like hiring staff for retrieving and handing over keys and cleaning your property, it doesn’t pose a big deal especially for investors who want to jump into the passive income bandwagon. Airbnb also provides a Host Guarantee to help owners in case of property damage done by the guest. Property owners receive up to $900,000 in damages to properties covered by the guarantee. Although there are some risks associated with this venture, you can take steps to mitigate potential problems and maximize your return on investment.