Make sure your market has demand for your listing. Don’t try to rent a fancy mansion in the middle of nowhere. You need to understand your market and make sure you can cover the expenses you incur. With hotels and Hostels in Melbourne as competition we suggest you read the below to see how to make money with a Airbnb.
Traditional Lease vs. Short Term Airbnb Rental
The example will assume we are financing the property, but if you need a low capital venture you can rent the property. Of course, you will need permission from the landlord but if you can pitch your proposal correctly most landlords will allow it!
For our analysis purposes, we will look at my property located near OSU Campus. Most properties around that area traditionally rent to students at a 1% of property cost when it comes to monthly rent. That means a house that is worth $300,000 will generally receive $3,000 in monthly rent – while it seems like it wouldn’t be a significant return, you have to remember that you wouldn’t actually be investing the full house value.
Airbnb as a Real Estate Investment
Here’s where “other people’s’ money” comes into play. When you acquire an investment property, you will generally put 15-25% down. If you want to apply for a mortgage as a primary resident (this works extremely well if you want to maximize your return by living in one room and leasing out the others) you may even only be required to put as low as 3.5% down using an FHA loan for a property up to 4 units. By leveraging your debt capacity, you will be able to effectively invest more money than you would otherwise be able to.
Take Amazing Photos
Depending on where you’re based you might be able to get a photographer for cheap through Airbnb to do photos of your place. If not, you need to take great photos. Think about what you’d want to see when looking to book. Make the home or room look light, airy, welcoming and guest ready instead of having it look like a dark, spare bedroom full of junk.
Write an Accurate Description
Follow the steps to do your listing and make sure everything you put in is accurate. Be super clear about what is on offer and what’s off limits. Set rules for the home, instructions for how to get the key, solid check in and check out times, pick your price (base it on how much rooms are going for in your area or do it a little less to get your rating up when starting out), then list it!
Use A airbnb management Company.
We have written a guide of the top airbnb property management companies in Sydney because it’s great way to make money and still having time to live your life and not be a full time airbnb host.