Published on September 19th, 2022
Travelers have a lot of options when it comes to lodging now that there is the Airbnb app. Many are opting to stay in somebody’s house rather than booking a hotel.
This is a great deal for travelers since they can usually save money and enjoy a more authentic experience since they are in a home and not a hotel.
If you are considering investing in an Airbnb property then you have to understand how to make money with it.
There are a lot of mistakes that new owners make that make it difficult for them to make money. In this article, we will go over what some of those mistakes are so you can avoid making them.
1. Picking The Wrong Location
One of the principles of real estate is picking the right location. However, the right Texas real estate location can mean different things depending on the context. A great location for house values or long-term rentals may not be great for Airbnb.
A common mistake is not understanding what the location should be when buying a property. It is important to think about what a traveler needs to have in an area and then determine if the one where you plan to buy satisfies those needs.
For instance, an upscale suburb may be a great place to flip houses, but if there isn’t much tourist infrastructure or public transportation then that area wouldn’t be suitable for an Airbnb investment.
Look for areas where there is easy access to things like tourist sites, restaurants, coffee shops, and good public transportation links. If you don’t have those then look elsewhere.
2. Picking The Wrong Property Type
Different types of travelers have different needs when it comes to the type of property that will work for them.
Families need lots of space and a kitchen to cook at home. Backpackers are looking for something small that suits their meager budget. The business traveler needs to have a space where they can get work done.
Understanding which type of traveler is most likely to be looking for an Airbnb rental in the area where you choose to buy will help you avoid buying the wrong type of property. Research the area and find out who is traveling there and then buy the right type of property.
3. Not Pricing Correctly
Pricing too high will inevitably lead to the property sitting empty too often. Pricing too low will make it difficult to make a good profit off of the property.
Make sure to research what the average price is for a night at the other properties in your area. Don’t just look at the price, however. You also have to consider the type of property.
Look around for what people are charging for the same type of property in the area. Calculate if there are any added value options that your property offers such as a spa bathroom or a parking spot.
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