Airbnb is certainly having a moment. For real estate investors, it may be a trend worth cashing in on. If you’re in property development, or interested in flipping houses, Airbnb could be a natural progression for your investment portfolio.
Many people who invest in real estate often wonder whether or not Airbnb properties are a good investment. After all, trends come and go. However, the short answer is yes—investing in Airbnb properties is an excellent investment that help to make extra income.
One of the hottest market trends at the moment is short term rentals. The short term rental market is continuing to grow. These types of properties include Airbnb, and it is expected to grow 7.9% annually. Rather than booking a hotel, more and more people are choosing to go the route of booking an Airbnb property when they are traveling or going on vacation.
Many vacationers prefer to stay in a private residence which offers many benefits over a hotel. With the demand for such properties in vacation and travel spots, it is an absolutely wonderful investment to purchase such a property to rent out for vacation rental property. The key is to find a property in a high occupancy area with major tourism that will constantly be rented out throughout the year.
There are now some restrictions on Airbnb properties in certain cities such as New York City, San Francisco, and Santa Monica that can be rather tough. Though this may deter some from investing in Airbnb properties, there are still many cities and boroughs without restrictions. Cities such as San Antonio, Indianapolis, Palm Springs, Key West and Fort Lauderdale are all extremely hot areas for Airbnb. Properties in these areas would be well worth the investment because they are extremely profitable.
Luckily, close to home, it doesn’t seem like there are too many restrictions—though a talk with your local zoning commission is never a bad idea. In Phoenixville, there are over 100 properties listed on Airbnb. In Philadelphia, there are over 300. As more people discover the convenience of short-term rentals, as well as the cost effectiveness compared to hotels, the need for such properties will rise. As a property investor in this area, I think it’s safe to say that Airbnb will be a market worth exploring over the next few years.
One of the massive advantages that make Airbnb properties great investments is the duality use that you can get out of it. The property can always be used as a second residence whenever you may need it to do so. Many real estate investors find this to be one of the most convenient aspects of owning the property. They can live in it whenever they may need, but also are able to earn money off of it as well. Airbnb allows investors to choose the dates in which they would like to make the property available for rent. With long term rental properties you are unable to have this convenience.
Whether or not short term rentals are a passing trend, taking advantage of what the market prefers at the moment is never a bad idea. After all, the property can always be sold at a later time, essentially returning you to a standard property development, or flipping, model of investment.