With the rise of listing sites such as AirBnB & Homeaway/VRBO renting out your home or investment property to make additional income has never been easier! You can make money with Airbnb by renting out your apartment or home while you’re not there; or even purchase a property as an investment to rent out on AirBnB.
If you’re thinking of going the investment route, and renting out a property you purchase or lease through Airbnb, there are a few things you should be aware of:
Check Local Laws – Ensure that the State, County, and City your property is in permits short-term rentals, and if they do, learn about the legal requirements.
Check Your Zoning – Often zoning alone prohibits the rental of properties for stays of less than 30 days (almost all AirBnB stays are less than 30 days).
Comply With Regulations – If you are in a zone that permits short-term rentals, find out if you need to have ADA compliance, hard-wired smoke detectors, or any other physical changes to the property.
Get Permits & Pay Taxes – It’s often required to have State, County, and City permits and remit transient use taxes in areas that do permit short-term rentals.
After the property is bought/leased, permitted, furnished, and decorated, you need to take some great photos! The customer is comparing your photos and listing quality to all others, and your listing and photos are what they are going to make their decision on. We recommend hiring a professional photographer for $200 – $500 to take great photos and edit them for you. This is not an smart area to cut costs, as the quality of the photos is one of the single biggest factors in how many bookings you’ll get and what guests will pay to stay in your place.
Once your listings are up revenue management will be key. We recommend using Airbnb’s built-in price management software or another similar software (AirDNA, Wheelhouse.com, Beyond Pricing, etc.) to dynamically price your property on a daily basis. Many events are happening in your town that you may not know about and you could be missing out on higher revenues if you’re not using a specialized software package.
Bottom line: Your revenues generated have to be higher than your rent or mortgage payments and expenses (utilities, maintenance, etc.) to really be making money with Airbnb. If you do everything right, you can earn a nice return on your investment!