Beginners Guide to Airbnb Investing in Real Estate
Many of you already know that Airbnb is one of the biggest opportunities in our current real estate market and if you didn’t know this you should pay attention to the reasons why: Airbnb gets more than 3 million visitors per day booking properties on their website. The Airbnb website app allows regular people with everyday homes to rent out either a room, a granny flat or the entire place to a guest or a family, just like a hotel.
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Airbnb is the trusted partner for both parties, the homeowner aka “host” and the guests, this allows the hosts to know that the guests won’t destroy their property and the guests to know they are staying in a safe environment.
Airbnb has put insurances in place that vet the guests and they assist you with putting your properties on their platform so that they can make money which is a small percentage of the rental fee, then you get the rest.
From the guests perspective Airbnb equally vets the hosts and the properties to ensure they are up to the standards that are represented on the website and that they are safe for you to stay in. Ultimately Airbnb works as the trusted middleman between both the host and the guest.
Get Started
HOW I GOT STARTED IN AIRBNB - PERSONAL EXPERIENCE
This may sound very similar to a cottage rental, something we have all done back in the day! On a personal note, I have experienced great success with Airbnb and I’ll share with you how that came to be. I started with having long term tenants in a triplex of which one unit was in the basement. The basement, albeit finished beautifully, was always difficult to maintain tenants for more than 1 year, whereas in the rest of the building our tenants would stay for 2-3 years average. I personally had rented short term rentals in my work travel so I was very familiar with the entire concept so I decided to give it a try as a host.
I bought the furniture, up-cycled some, bought some brand new, decorated the place catering to “executive rentals”, staged it and took some sexy photos. I studied my competition in the area and concluded a price that I thought would be appealing, put the ad up on Airbnb and waited…. A day! Bam, I had my first booking! A professional that was here on business for a week from Barbados. At that time I did all the bookings, cleaning, meeting and greeting the guests and overall managing. As a side note, I am still friends with this guest today!
Basically from that point forward, based on the quality of finishings and price point that I had selected I was consistently booked solid all year.
So here is the best part, on an apartment that I would sometimes have difficulty in finding quality tenants, renting for $1200.00 a month (at the time that was considered great rent for a basement suite) I started generating $3000.00 plus per month depending on the time of year. So I went from generating $14,400.00 per year to $36,000.00 per year basically from the moment I listed it on the market. Here is another great part, I wasn’t located in a beach town or vacation community, I was in a city centre in downtown Kitchener close to a hospital, two Universities and a multitude of Insurance companies so most of my guests were professionals and left the place in tip top shape!
Finding Properties
HOW DO YOU GET PROPERTIES NOW
In this current real estate market it’s not the easiest to find a good deal on a triplex and then rent it out for profit, so here is the thing, you don’t have to own all the properties to get started! Here is an example of how that can work.
Be a Solution to the Problem
BE A SOLUTION TO SOMEONES PROBLEM
Remember how I told you I got started?
PROBLEM - My basement suite wasn’t rented out on the same level as the rest of the triplex, hight turnover and problem tenants
SOLUTION - Furnish unit and rent out as an Airbnb
So, find someone that has a problem and become their solution! The caveat is that you have to be honest and forthright with them if you are wanting to rent out as an Airbnb and have the landlords permission. This is called Airbnb Arbitrage.
Here are some examples of problems that require solutions:
Divorce
Bankruptcy
Landlords that have problem tenants
Relocated to a new job and can’t keep the property
Solution - take over those properties and rent them from those people, guarantee the rent and then put them on Airbnb.
Get it Listed on Airbnb
SO YOU HAVE THE PROPERTY, NOW WHAT?
Now you need to furnish the property, towels, linens, dishes etc. I can tell you from experience, it’s not that expensive. Facebook Marketplace, Wayfair return warehouses, up-cycling furniture & IKEA, you can furnish homes and apartments for as little as a few thousand dollars. If need be, you can do it all on credit to hold you over that first month until you start getting paid on your bookings.
Decorate your Airbnb with a theme, keep it consistent, stay current. Look at Airbnbs that are always rented, study them, they are booked for a reason. People want to stay in places that are equivalent to or nicer than their own home. NEVER FORGET THIS as this is what will get you bookings! If you are appealing to professionals have things that professionals would expect. If you are catering to a vacation beach rental have things like beach towels, beach chairs, beach umbrellas.
GET IT LISTED ON AIRBNB
I can’t stress enough, take professional photos! There are tons of real estate photographers out there that are well trained in taking photographs for MLS listings, they cost anywhere from $300.00 - $750.00 including drone shots. If you are close to a beach or lake, spend the money and showcase the property so it shines, believe me you won’t regret it!
It costs nothing to put the listing up on Airbnb, the way they make their money is at the time of the booking they take their cut, which at the time of this article is about 3% which is a very low amount.
GET 5 STAR RATINGS
If you want to have solid bookings you have to be sure your guests are happy which means 5 star ratings.
PROPERTIES MUST BE; CLEAN • SAFE • COMFORTABLE
GIVE YOUR GUESTS A GOOD STAY
MAKE SURE THEY HAVE EVERYTHING THEY NEED
ASK FOR 5 STAR REVIEWS
The more 5 STAR reviews you receive the higher your property will show on the search engine on the Airbnb App. Additionally Airbnb is not the only website that you can put your property, you can put your Short Term Rental on ALL the different short-term rental websites. This will ensure you at 95% bookings!
I have very happy clients that I have found specific properties for to be turned into extremely profitable Airbnb rentals.
As always, helping you build wealth through Real Estate!
Melissa
