3 Factors to Consider Before Investing in an Airbnb Property

Investing in short-term rentals is a great way to make money in today’s market. There are a few things you should know before diving in.

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The biggest buzzword in real estate today is “rental.” Airbnb has created a lot of excitement around short-term rentals. People are making a lot of money renting out parts or all of their investment properties for the day or weekend.

These investors are choosing properties that specifically meet the needs for short-term travel.

Before you invest in a short-term rental of your own, you should pay attention to these three things:

1. Location and zoning. Are there any restrictions in your community? Does the area allow short-term rentals? Many HOAs and even some cities frown on short-term rentals, so make sure you know the rules and that the property will meet your needs.

Make sure that short-term rentals are allowed in your area.

2. Management. If you’re not local or you don’t want to handle the property personally, then you need to make sure that you have a management company that has experience with short-term rentals and are equipped to handle them. If you can’t handle those midnight calls about failing air conditioning, the value of your property will go down, as will your enjoyment of being a landlord.

3. What is your exit strategy? When you no longer wish to have a short-term rental, what will you do with the property? Will you use it as a long-term or seasonal rental, live in the property yourself, or sell it? If you do decide to sell your home, remember that you can use a 1031 exchange to get you from one investment to another.

If you can make it work, short-term rentals are a great investment. If you have any other questions about real estate investments, just give me a call or send me an email. I would be happy to help you!