Airbnb properties have become extremely popular. More vacationers and those traveling for work have chosen to stay in an Airbnb instead of a hotel. Due to Airbnb’s increasing popularity, investors frequently turn properties into short-term rentals instead of traditional, long-term rental properties.
Not every property purchased should be turned into an Airbnb. Before buying a house or any other type of real estate and listing it as an Airbnb, you need to do some fact-checking. For starters, you should make sure the property is in a good location for an Airbnb.
You may be asking, how do I even find the best location for my next Airbnb? We’re here to help you with seven tips on how to find the best location for your next Airbnb.
First and foremost, you need to make sure Airbnbs are legal in the city, town or county where the property is. Some municipalities have made Airbnbs illegal for various reasons, or placed permitting requirements and other rules on rentals of this type. If you ignore the laws and open an Airbnb, you could face some serious legal repercussions.
Now, if the area of your choice does allow Airbnbs, you still need to understand the laws and speak with an attorney to create various legal documents to protect yourself and your potential guests. Additionally, an accountant that can help you understand the tax requirements for this type of income.
It will also be worth looking into various types of insurance that your Airbnb may need to operate. Some insurers will not provide coverage for short-term rentals.
If your Airbnb property is near your home, you may not need an agent or company to manage your Airbnb property. If you are looking to list an Airbnb far from your permanent residence, you might want to consider a property manager to oversee cleaning, maintenance, guest services, etc.
Research how much a property manager or company will cost. You do not want to spend all your money on a manager, as this could drastically cut into your revenue. Completing this research will help you decide who to work with or at least give you a shortlist of who to contact as a potential Airbnb manager.
You want to open an Airbnb property in an area with a steady tourist season, and a short off-season. You do not want the property to sit unused most of the year. Short tourist seasons will cut drastically into your revenue, and a property sitting empty and unused is more likely to need work in terms of upkeep and maintenance.
The demand for short-term rental properties increases with a steady stream of tourists and a longer tourist season. A steady tourist season means that there are things to attract tourists all year round. You may also need to consider the area’s climate and how this also affects the tourist season.
Big cities are may not the best place for Airbnb listings, as there are generally more hotels around, making the demand for short-term rentals lower. In addition, it might be difficult to find a suitable place for an Airbnb in a large city that will not cut too deeply into the location’s bottom line.
Super small towns may also be challenging locations for Airbnbs. You want a town that is not too large and not too small. That may sound very difficult to find, but it is true. Unless the small town has a huge draw for tourists, an Airbnb may not be practical without the right population and draw to sustain the business.
As part of your research, you need to determine how many other Airbnb listings are in the area you plan to list your property in. You also need to know how many hotels are in the area. If there are many Airbnb listings and plenty of hotels, then your listing may not fare well.
You want to put your listing in an area that does not have enough hotels to meet the demand of tourists coming in. You also want your listing to be in an area where there is not already a lot of Airbnb options. The more competition in the area, the less likely your listing will be booked and rebooked.
When you choose to list your Airbnb, you want to pick a property close to popular tourist attractions. For example, you want your Airbnb near museums, parks, shopping, hiking trails, ski locations, restaurants, etc.
The closer you are to attractions, the more likely guests will want to book your listing. Ideally, guests enjoy when your property is within walking distance of main attractions.
When choosing your Airbnb location, you need to be aware of public transportation. If the town where you want to create a listing has buses, taxis, subways, or other public transportation, know where the stops are located. If you can buy a property near public transportation, it may help draw guests to your listing.
Guests do not want to spend a lot of time traveling or walking to public transportation. The closer your listing is to these stops, the better your guests can maximize their time in your Airbnb community.
Additionally, guests want a place to park their personal vehicle. Your Airbnb property should have a safe, designated area to park cars, motorcycles, bikes, etc.
Not every town or neighborhood is good for an Airbnb listing. As with any business endeavor, do your research. If you can check off each of the seven items mentioned above, you may have found a great spot for an Airbnb listing.
The included tips do not guarantee that guests will book or rebook your listing all the time. A lot goes into getting your listing booked by Airbnb guests, but if your potential Airbnb property has these things to begin with, it will make your listing more appealing to potential guests.
Rachel Jones is an award-winning writer and editor from Oklahoma City, OK. Her work has been published on influential sites, including Entrepreneur and International Business Times. She spent several years in property management and leasing, handling short-term rentals, student housing, and community rentals. Rachel is also experienced in staging and real estate photography. With a B.A. in English in her back pocket, Rachel combines her passion for property management with her storytelling ability to offer Airbnb hosts helpful advice as they monetize their homes.
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