An Airbnb is a house, apartment, or other living areas that you can rent out for short periods like a hotel or bed-and-breakfast. Depending on where you live, you can make a lot of money running an Airbnb, but it comes with a lot of work. Like any investment, you need to consider the pros and cons of owning an Airbnb before taking the plunge. The pros and cons can also vary depending on the location of the property you own and what the local regulations are on short-term rentals.
Here are some pros and cons to consider before investing in an Airbnb.
Buying an Airbnb is an investment opportunity. As professionals like David Lindahl can attest, becoming a real estate investor can lead to positive cash flow and long-term wealth. You can start with a single-family home and rent to a large group of people for a weekend vacation. You charge by night, just like a hotel or other type of short-term housing. If you live in a touristy area where rental houses are in high demand, you can charge a significant amount. The closer you are to the travel destinations and the nicer the house is, the more you can charge. People who choose an Airbnb over a hotel usually travel with a larger group, so the more sleeping space the house has, the better.
As a real estate investor, it’s an excellent opportunity to make significantly more with the property than you would be renting it by the month to long-term renters. If you have a house that you can rent for $900 a month, you can rent that same house for $140 a night. Even if you only rent it out on Friday and Saturday nights, you can get upwards of $1,400 a month for that same property. If you are only renting the house out on weekends, you have plenty of time during the week to get it cleaned and ready for the next renters.
Running a house as an Airbnb is more work than a long-term rental. You have to market the property to keep it consistently booked constantly. You have to have it cleaned after every rental. You have to have it fully furnished and stocked with linens, dishes, pots, pans, and everything else someone may need while staying there for the weekend. The people renting your property are there for a vacation, so they expect a nice place with an element of luxury.
There will be a significant focus on the bathroom and kitchen, so you need to be willing to invest some money into the home to make it upscale, something you likely wouldn’t do if you were using it as a long-term rental. You can do a local online search to find a contractor to provide quotes of what that will cost. For example, you can search “shower installation in Pittsburgh” to find a bathroom remodeling company in your area. They can provide an estimate for a complete remodel, including new fixtures, a new tub, new tile work, a luxury bath, replacement shower, or a one-piece shower surround to make cleaning easier. Your initial investment will be much higher, so it will take longer for you to get a return on your investment.
The bottom line is that you can make more money with Airbnb, which is an advantage, but it costs more to start and maintain a high-yielding Airbnb investment. There is a give and take in all investment opportunities, and whether or not you work with a management company will also play a part. Different areas have different regulations, so it is essential to consider that before buying property.