Airbnb has become synonymous with short-term rentals. It is one of the best short-term rental investment platforms, providing the most consistency over time. Many people live in housing markets where the average home price has increased so much that it seems too expensive to make an Airbnb profitable. Luckily, there are several ways you can save money and increase your chances of becoming a successful Airbnb investor.
Key Takeaways
- Jump-start your venture in real estate investing with an Airbnb, and you can develop a promising passive income stream to last a lifetime.
- Testing your area’s short-term rental market by subletting your apartment, condo, or rental home is an effective way to determine if your Airbnb could be profitable.
- Consider furnishing your Airbnb on a small budget. You can benefit from finding solid furniture pieces for a bargain and spending more on essential items.
- Investing in a reliable security system that you can control with the click of a button provides convenience and peace of mind.
- Take the time to educate yourself on the short-term rental market and ways to leverage your property to achieve lifelong wealth.
Infinity Investing Featured Event
In this FREE event you’ll discover how the top 1% use little-known “compounders” to grow & protect their reserves. Our Infinity team of experts show you how to be the best possible steward of your finances and how to make your money and investments work for you instead of you working for them. Regardless of your financial situation today, you’ll have a road map to get to where you want to be.
Top 3 Airbnb Investing Strategies for Beginners
With six years of experience and 30 Airbnbs, Infinity Investing’s Aaron Adams has learned what it takes to become a successful short-term rental investor. Here are his top three Airbnb investing strategies for beginners, designed to save you money and time while making a profit:
Try Subletting Before Buying Property
Subletting is taking your rental property, where you are the primary tenant, and renting it out as an Airbnb to a secondary tenant or subtenant. Through this process, you develop a sublease and have the subtenant pay you rent, and, in turn, you pay your landlord or property owner every month.
If you live in a housing market where property is expensive, subletting can be an excellent alternative. Maybe you’re not ready to go all in or you can’t afford to purchase a home. Turn your rental into an Airbnb and test the market to see how well it can perform.
The important thing to note is that many landlords have a clause in the lease that prohibits subletting. Do not make the mistake of subletting in secret. There is a way to make it work, but you need permission first. Be transparent with the property owner and let them know your intentions are to create an Airbnb. You can develop a proposal showing them the profitability.
Sometimes landlords avoid turning their properties into short-term rentals because they don’t want to deal with furnishing or cleaning them. Offer to take care of these responsibilities to ease their mind and increase your chances of convincing them that this partnership could be fruitful for both of you. If you are approved to sublet, you can offer the landlord a rent premium, which is an increase in rent, as an incentive for letting you develop a short-term rental. Likewise, you could optimize the Airbnb rental price so that you and the landlord can split the profit.
Furnish Your Airbnb for a Bargain
You can capitalize on the short-term rental investment market by creating an aesthetically pleasing space. Successful Airbnbs offer updated amenities to maximize the guest experience. The more satisfied your tenants are, the higher they will rate your Airbnb. These ratings can increase your chances of booking more tenants for extended stays because they won’t want to leave the comforts of the vacation home you created.
While it may be enticing to splurge on furnishings for your short-term rental, you should aim for a smaller budget of around $10,000. With a little more effort, you can easily furnish a multi-bed-and-bath home for under $5,000. The secret is Facebook Marketplace. This online marketplace doubles as a thrift store or yard sale that serves your local community. It’s an excellent place to find furniture, such as couches, coffee tables, dressers, and more, for free or at a reduced price.
However, there are a few items that you should refrain from buying used. Increase your tenant satisfaction by purchasing the following must-have items brand new:
A Smart TV
Every short-term rental investor should purchase a new smart TV for their Airbnb. You aren’t required to provide your tenants with cable, but you should at least have a strong internet connection. The TV doesn’t have to be expensive, either — it just needs to allow your tenants to log in to their Netflix, Amazon, or Hulu accounts to watch their favorite shows.
A New Mattress
Buying a new mattress for your Airbnb is a worthy investment. You don’t want to risk bringing bedbugs into your vacation home with a used mattress. Also, you want to ensure that it is durable and reliable. Buying a new mattress may seem insignificant, but it speaks volumes to your guests. They will get a good night’s rest and wake up feeling refreshed and more inclined to leave you a five-star review.
New Pillows and Bedding
A new mattress feels incomplete without new pillows and bedding to enhance it. Purchasing new bedding can allow you to coordinate the look and feel of the bedrooms in your Airbnb. Guests appreciate a short-term rental that is uniquely decorated. It is worthwhile to invest in new pillows because your guests’ satisfaction increases with their comfort.
Invest in a Security System With a Smartphone App
If you’re new to short-term rentals, technology will bring you invaluable peace of mind, especially when it comes to security. Equip your Airbnb with a security system that pairs with a smartphone app. While you’re at it, install a smart lock on your rental’s doors to easily change the door code. Tenants often lock themselves out, so you will be able to assist them remotely with a smart lock.
Adding cameras to the property is another way to increase security. Be mindful when installing cameras in the rental home’s interior because you must disclose this to your tenants. Instead, place cameras on the exterior, including the front and back of the property. You can also take advantage of motion sensors and lights to help protect your property while guests are away.
There are many perks to having connectivity with your security system. You can manage your property remotely and monitor who is there. You can also receive notifications when your guests arrive. Improve their satisfaction further by checking in through the Airbnb messaging system to see if they need anything.
Is Short-Term Rental Investing Right for You?
Short-term rentals are a great way to get into real estate investing and build passive income. This type of investment is ideal if you have a full-time job. You can easily manage your Airbnb on your smartphone with an evening or weekend booking schedule that won’t interfere with your day job. Maybe you’ve been renting for years and want to start investing in real estate — an Airbnb could make financial sense for you. Even if you have bad credit, you can build wealth with your Airbnb as it becomes a steady stream of income on the side.
If you can’t afford to purchase property or don’t have all the money needed for a home loan or down payment, consider subletting. You can generate a good income with your Airbnb. Alternatively, an Airbnb can be beneficial if you are paying too much in taxes. Managing a short-term rental classifies you as a real estate professional, unlocking potential tax write-offs.
Educate Yourself on Real Estate Investments
These real estate investment strategies and more are discussed in Infinity Investing’s monthly workshops. The free workshops offer a full day of advice and education on becoming financially free. If you want to create multiple income streams, sign up for Infinity Investing’s 360 Pro membership and take advantage of our investment portfolio analysis, weekly stock tips, and real estate training videos. The membership also includes stock market recaps and techniques and exclusive access to real estate properties you’ll want to invest in.
These Airbnb investing strategies are simple yet valuable, and they show you that becoming a successful Airbnb investor is an attainable goal. Subletting, furnishing, and security are the top Airbnb investing strategies for beginners to apply. Implementing these tools in your short-term rentals can help you achieve the lifelong wealth you desire.
Infinity Investing Featured Event
In this FREE event you’ll discover how the top 1% use little-known “compounders” to grow & protect their reserves. Our Infinity team of experts show you how to be the best possible steward of your finances and how to make your money and investments work for you instead of you working for them. Regardless of your financial situation today, you’ll have a road map to get to where you want to be.