Although Airbnb started in 2008, it’s recently become a very popular way for new and experienced investors to rent out their homes and make extra income. Whether your home is near the beach, downtown, or on a secluded island, Airbnb offers you the chance to share your living space with others and make money while doing it.
Are you looking to get into Airbnb investing? This article discusses how to get started with Airbnb investing, its pros and cons, and why you should consider this alternative investing method to add to your portfolio.
What is Airbnb investing?
Airbnb investing involves an investor renting out their homes to guests on Airbnb. While most Airbnb investors own the properties they list on the website, some investors are engaging in Airbnb arbitrage where they don’t own any physical property. Airbnb arbitrage allows investors to rent their living space and sublet to tenants. However, this practice isn’t allowed in all areas and could get you evicted if you break the rules.
Pros of Airbnb investing
Airbnb investing is attractive for many reasons, including:
Higher earning potential. Airbnb investing has higher earning potential since you theoretically can have someone renting your living space out every night. If you list your home for $200 per night, this can generate an additional $6,000 per month–much more than you will be able to get as a traditional rental property investor.
Not as much outbound marketing to acquire clients. Listing your home on Airbnb allows you to get discovered organically on Airbnb’s search engine. Those that can master Airbnb search engine optimization can get their listing as the first result when someone is looking for a property in your area. Without Airbnb, you’d be responsible for marketing your listing and finding tenants on your own.
Cons of Airbnb investing
Active investment. Airbnb is almost always an active investment that requires ongoing management of day-to-day operations. This means you’ll need to handle customer complaints and issues such as broken toilets or leaking roofs. Those that want a passive Airbnb investment need to outsource to a property management company which is an additional expense.
Potential risks. Airbnb investing comes with potential risks if you can’t afford your monthly payments or guests damage your home. You also need to understand that many landlords don’t allow subleasing and can evict you or pursue damages if you don’t abide by their rules.
High fees. Although it’s required, Airbnb charges fees to use their platform that can eat away at your profits.
Airbnb investing is one of the best real estate investing strategies that allow you to build a sustainable side business for extra monthly income. Those who want to make money from Airbnb investing without owning any physical property should look into Airbnb arbitrage. Always make sure the area you are looking to own an Airbnb permits this type of rental!
Are you looking to buy or sell in the Massapequa area? The Kim Holland Homes Team is the only real estate team you can trust in Massapequa. Contact Kim today and check out some additional resources with our blog for more information on buying a home on Long Island.