The Airbnb Phenomenon — Is the Investment Worth the Risk?

Airbnb has become one of the most popular sites for vacation rentals. With properties all around the world, many of which are located in ideal locations for business and leisure travelers, it makes sense that smart investors are looking at buying properties to scoop up and rent out. This investment could be a bit tricky though. Investors are not buying a vacation home for personal use and in many cases they are not buying a home in the location in which they reside.  So how does the process work? I will be the first to admit that while this topic is incredibly interesting to me, I don’t know much about it. I’ve learned a lot already just doing my research for this post, but I feel it is my responsibility to tell you that this type of investment property is just out of my wheelhouse.

 

So, I thought the best way to approach a great discussion on investing in an Airbnb property would be to scour the web for expert sources to share and outline for you. I know real estate investors are always on the move and don’t have a lot of time to search for credible, relevant articles to read, so I’ve done that legwork for you. I have five articles that do an outstanding job weighing the pros and cons of owning an Airbnb property, plus they spell out considerations like taxes, regulations, logistics, etc.

 

While I am providing a brief synopsis of each article, I still highly recommend clicking the link for each site (it will take you directly to the article) and reading the text in its entirety. There is so much helpful information to glean from each site that is essential for making educated decisions regarding this type of investment.

 

Mashvisor

 

This article is a perfect place to start your research because it provides general information to help you get started finding a great Airbnb investment. It outlines steps like assessing demand from tourists, seasonal fluctuation in business, managing the property both short and long-term, financial resources, listing the home, and the actual logistics of renting once the property has interested tenants. If you like this article, I think you will love their Ultimate Guide to the Airbnb Investment Property. It is a lengthy read, but worth your time!

 

Marketwatch

 

This is a much more cautious take on this type of investment. This article emphasizes the investment strategy and potential risk of owning an Airbnb property. I think one particularly useful section in this piece includes regulations to be aware of in certain cities, plus taxes and commission to Airbnb for using the company as a marketing tool and property designation. This is an excellent resource for anyone ready to delve into a more detailed look at making this type of investment.

 

Price Economics

 

This is the most technical, financially focused article I found. It provides some “real world” information as an Airbnb property owner, and it also shares a few of the negative feelings about Airbnb investors in cities where housing is scarce. There have been some politics surrounding major Airbnb investors that would be helpful to know as you get started. This article also provides some graphics with figures showing return on investment. I think the information in this particular piece seems to be geared toward professional, large-scale investors, but it is a helpful resource for someone just getting started as well.

 

AIRDNA

 

A bit more casual in nature, this blog post provides potential investors with six steps to work through if interested in buying a property to list with Airbnb. This article is an uncomplicated, casual read.  It is easy to understand and applicable to someone beginning to think about this type of purchase. If you want to see the process of investing in an Airbnb property simplified, this article is for you!

 

Investopedia

 

This article might be my favorite out of all the pieces I read. Investopedia is such a trusted source, and I like how this article gets right to the point of the entire process. How will this investment make money? There is a detailed step-by-step guide on listing the Airbnb property and getting all necessary permissions to start doing business. This article also does a nice job sharing information about home and personal safety as a property owner, plus it includes some information about insurance coverage options. If you only have time to read one of these articles in its entirety, this should be it.

 

What do you think? I hope these sources are enough to get you started in researching the Airbnb investment prospect. The possibilities are endless, so take your time thinking through this investment. It is a different type of property than a flip or rental where you reside, so it comes with some unique challenges. However, there is also an outstanding opportunity for growing your investment portfolio. As always, please reach out with questions. If I don’t have the answer, I will certainly work to find someone who does!

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