Anyone successfully done AirBnb property?
Jan 6
22 Comments
I am good at rental properties investments but am bored of it now after so many of them. I want to explore AirBnb investment. To anyone that has done it successfully, could you share any links they will help me with understanding investment calculation for if, how to identify/buy it etc? Any resources that basically help learn and move with AirBnb investments?
comments
1. Rent ratio - for base filtering, avoid property below 1% rent ratio. I.e. if you bought for 100k, you should expect at least 1k rent per month. If not, simply skip. Many professional investors target 2% rent ratio but is difficult for amateurs as you typically will be buying good property in good area and not fixer upper that you would do yourself. I personally target 1.5% rent ratio but 1% is stop for me.
2. Capitalization rate - this is yearly income you expect divide by cost of property. Income should be calculated as rent minus all expenses fees but excluding principle and interest. You should target minimum >5% cap rate.
This would be the beginning and you can go from there the more you learn. Be prepared to not get emotional and say no to tons of properties that doesnโt fit, even if in specific market condition NONE of the properties are available for the returns you expect. You can keep your options open across the nation though locally you would have better connect and can manager yourself but keeping National option open allows you to find good properties and you can factor in higher cost of property management to outsource management. Be conservative and be slow initially. I.e. expect high operating expenses for first 5 years, consider vacancy rate of 2 months each year for first 5 years in your calculation (so you count your rental income not 12x of rent but 10x of rent) etc.
There are lots of good rental property calculators online that will also help. You will find that in current market deals will not be easy to identify for first timer but patience will help. Develop a hobby of evaluating properties. And when finally a good deal appears then act fast and donโt blink. Once bought, managing it is altogether a different story. ๐
This is not investment advise but just some general guidance to help you start. Good luck. ๐
Learned the hard way and sold the property in time
Did AirBnB help either with reimbursement or anything else? Would you ever do it again?
With airbnb it's a fight to get them to payout anything.