What To Look For In Airbnb Properties To Invest In

Sep 30, 2021

Considering investing in Airbnb properties? Here’s what to look for in good short term rental deals…

The Cons & Pros Of Airbnb Properties

There are a variety of short term rental strategies that may be very applicable to today’s market and especially in the new economy. 

Airbnb rentals are probably the most famous or notorious form of short term rentals today. 

According to Airbnb there has been a shortage of at least 1M of these units recently. That demand is only likely to grow with remote work as the overwhelming norm, and domestic travel becoming far more common, with only around half of the population choosing to get COVID vaccines. 

Between eviction bans, flexibility to optimize and increase rents in real time and the dramatically higher daily rents these units offer, there are many advantages for landlords. 

While the lure of what may be 3x greater rents and other perks may be strong, ignoring the cons and downsides of this strategy can be financially perilous as well. 

Most green investors end up far overpaying for their properties, banking on Airbnb rates and high occupancy rates. That bankrupts most pretty quickly as the occupancy rates on these properties can be very low and very seasonal. 

On top of that, platforms like Airbnb and Vrbo may effectively carve out 30% of the topline for themselves. 

The expenses are high and management is beyond intense. Beyond what most can fathom until they get elbows deep in it. 

Then of course there are arguments about eroding affordable housing. 

With all of that said, there are select properties and areas which are very well suited to this investment strategy. Managed well by very experienced and knowledgeable teams they can perform great. 

However, that all starts with knowing what properties are a match, and not. 

The Most In Demand Factors For Airbnb Properties

Whether buying to hold, lending on them, flipping or wholesaling, here are the most important features to evaluate according to a new survey by Realtor Magazine. 

While Airbnb properties are often heralded as being pretty pricey, the majority of guests say they are looking for units for between $50 and $99 per night. 

Price is also the top deciding factor when users pick somewhere to stay. 

After that it is:

  • Location
  • Cleanliness
  • Convenience
  • Size

It may also surprise you to know that the most in demand style is ‘traditional’, not modern or contemporary. Tourism based cities also ranked as the least desirable destinations. 

Poor parking and internet are among the top complaints guests have about these types of rentals. 

Investment Opportunities

Find out more about investing in secured debt and real estate, go to NNG Capital Fund