68% of landlords confess to finding managing their property more stressful than initially anticipated. The most common problem landlords face is late payment of rent, according to a survey of 1000 of them by property management company Airsorted.
To avoid these problems, an increasing number of landlords are choosing to rent out their properties on Airbnb. A study by Germany’s Süddeutsche Zeitung (SZ) newspaper looking at 37,000 Airbnb offers in Germany’s ten biggest cities found 1,290 landlords offering multiple apartments on Airbnb. Yet maintaining high occupancy rates for an Airbnb property all year round isn’t always as easy as it looks. Here are 5 things to consider before buying an Airbnb investment property.
Local laws and regulations
Before you buy a property for Airbnb or any other online short-term rental platform, make sure you know know the law. There are many cities and countries where short-let rentals are illegal, or at the very least tightly regulated, such as in the US city of Santa Monica or Singapore. Authorities in other cities enforce caps on the number of days you can let out property on Airbnb. These limits vary significantly depending on the city, from 60 per year in Amsterdam to 90 per year in London. When thinking about your returns, it’s worth taking the impact of these caps into account and making sure you’re on the right side of the law.
Location
If it’s your first time investing in short-lets, one of the key things to be aware of is location.The most profitable areas for long-term lets may not be the same for shorter stays. It’s wise to analyse the rental potential of an Airbnb investment property before putting down the cash for it. Airsorted’s property calculator allows you to work out how much you could earn in your chosen location.
Seasonality
The rates you can charge may vary significantly from season to season. Peak holiday months such as August create high demand. Occupancy can be expected to tail off in January, following the Christmas splurge. Take account of these variations by keeping up-to-date with events in your local area and altering the price of your listings accordingly.
Hidden costs
One thing many first-time short rental investors fail to account for are property expenses. Cleaning, utilities, damages and maintenance of the property’s exterior are just a few. Never rush into an Airbnb investment property without assessing ALL the costs that come with it. Early financial planning is essential to avoid unexpected surprises later on.
Property management
Think short-rentals are a passive investment? Then think again. With a constant stream of ever-changing guests, they’re high intensity lets. You have to check guests in, be available 24/7 for any issues and respond promptly to questions and feedback. Before laying down the cash for your Airbnb investment property, ensure you’ve planned how you’re going to manage it. If you haven’t got the time, property management services like Airsorted might help: they take care of the whole process from creating the listing, providing 24/7 support to guests and providing cleaning and laundry services.