Is it risky to buy properties to do AirBnB?

Question

I am thinking of buying some properties to become AirBnB hosts and make money.

How hard is it manage AirBnB? It seems like there are some people or companies that help owners manage your AirBnB but how can i find them?

Please share your thoughts.

Paul Sandhu · Answer

It's like running a mini resort.  You need to provide sleeping, eating, cooking and bathing accomodations.  You need some form of entertainment.  The only things that people are going to bring are their clothes and toiletries.  You need to provide everything else for them to enjoy their stay.

Here's a short list of some of the things in my STRs:

Kegorator

Smart HDTV

Firepit

Horse shoe pit

Pellet gun with pellets and pigeon/starling bait

BluRay player with adult movies

Matt Ayoub · Answer

I don’t think managing an Airbnb is difficult at all. I never managed any type of rental previously and now within 2 years have a property grossing over 100k a year with more than 50 5 star reviews. This assumes you have done your market research and selected a property with potential to meet your financial targets. A few tips:

1. If it’s a remote property you need a good PM or a Maid++ and a reliable handyman. Ability to turn the property spotless and respond to guest concerns is key. I give my PM 10 percent and she manages bills, maid, gardener, handyman, etc. Of course this can all be done yourself depending on your time and circumstances.

2. You should have no problem handling the front end yourself - creating your listing, responding to enquiries, closing bookings, etc. The Airbnb app makes everything very easy and you can benchmark descriptions against other listings. One key is a professional photographer.

3. List on multiple channels. I saw great revenue initially from Homeaway and you don’t want all your eggs in one basket

4. Penetration pricing - get traction with early bookings at low prices, gain credibility with 5 star reviews, and improve pricing / profitability from there.

5. Apply a little hosting love. Send a welcome email to ensure everything is as expected. Flowers. Thank them when they leave.

6. Most guests are wonderful. Some leave the place a mess. About 5 percent or less are just not nice people.

7. It’s a numbers game. Don’t get emotionally attached to the property and find the balance you are comfortable with regarding pricing and occupancy.

Hope this helps.

Matt

Julie McCoy · Answer

Read this forum.  There are literally hundreds of threads that discuss this in depth.

John Underwood · Answer

After you do get it up an running they could create a law to ban them in your area.

You have to take all this into consideration.

Erik Mehus · Answer

Make sure that the numbers would work as a long term rental if your municipality changes the regulations on short term rental. If that change would put you underwater, then it becomes a risk/reward question and how long you think it's viable before regulations change.

There are a lot of considerations in buying a property for vacation rental including location, property size, area demand/seasonality and partners to handle cleaning, repairs, etc.

Alan Grobmeier · Answer

I'm guessing you are wanting a FULL-TIME job?  That is basically what STR's are.  ;-)

Allan Szlafrok · Answer

@Jake Kinoshita another issue is municipalities cracking down in STRs so much as to make it impossible to build a business out of. Jersey City introduced legislation effectively banning Airbnb and putting all the operators out of business. They pulled the ordinance for now but some form of it will likely pass. I’m sure a lot of municipalities are considering similar bills. Make sure you keep an eye on that if you do plan on doing Airbnb.

Joe Splitrock · Answer

@Jake Kinoshita the word "hard" is very subjective. Those who are successful are resourceful and have good systems in place. They may not consider it hard, but it may be hard for you. @Julie McCoy hit on this a little bit. These forums and the entire internet are filled with resources explaining in detail how to be successful in AirBNB. Are you the type of person willing to find answers, rather than expect someone else to do the hard stuff for you? Only you know that answer, so whether this is hard really depends on you.

Paul Sandhu · Answer

You have to watch out for competition.  They will undercut you on price and outperform you on service and quality.  I'm that way.  The competition in my town either sold their properties or turned them back to LTRs because of yours truly.

Tim Schroeder · Answer

As people said above, learn it first then do it. There are many. many threads on this subject. But once you learn the basics, it can be very profitable - much more than LTR's - but a lot more work. However, some of that work is work you can mostly do from a smartphone lying on a beach. Other times it's a PITA.

Is it risky to buy properties to do AirBnB?

Most Popular Reply