How To Invest In Airbnb In 2021 | Easy Step-by-Step Guide

how-to-invest-in-airbnb

During the last financial crisis of 2008, a large number of startups like Uber, Slack, Cloudflare, Pinterest, Square, Twilio, and Airbnb were born.

These startups are all valued at over $1 billion making them unicorns. Airbnb happens to be one of the most prominent names on the list. Because of that, investors start to wonder about how to buy Airbnb stock.

You probably have stayed in an Airbnb rental for vacation, or have just heard about the lucrative possibilities of owning a sought-after short-term property in the company boost your passive income.

Let’s say you have some money saved up to either put around 20% down or even pay for an Airbnb investment property for sale in cash but how do you get started?

In this piece, we’ll talk about Airbnb, including what’s special about it and the concerns investors should be aware of.

Investing in Airbnb stock is a great way for investors to expand their businesses and increase their profit opportunities. Airbnb reportedly has 7 million listings in more than 100,000 cities around the world. 

Would you want to join the league of Airbnb investors? Read on to learn the various investment strategies and also uncover the benefits of Airbnb. You’d never know which step will lead you to your success!

What is Airbnb?

Airbnb is an online marketplace that connects people who want to rent out their homes with people who are looking for accommodations in that locale. It currently covers more than 100,000 cities and 220 countries worldwide. The company’s name comes from “air mattress B&B.”

How Airbnb Works

Before now, solid information about investments was hard to come by outside of the annual and quarterly reports. At this time, investors can access tons of investment principles at their fingertips, and as long as they stick to these “principles”, they have a good chance of being successful.

A community built on sharing

Airbnb began in 2008 when two designers who had space to share hosted three travelers looking for a place to stay. Now, millions of hosts and travelers choose to create a free Airbnb account so they can list their space and book unique accommodations anywhere in the world. And Airbnb experience hosts share their passions and interests with both travelers and locals.

Trusted services

Airbnb helps make sharing easy, enjoyable, and safe. We verify personal profiles and listings, maintain a smart messaging system so hosts and guests can communicate with certainty, and manage a trusted platform to collect and transfer payments.

Your safety is our number one concern. Learn more in our Trust and Safety Center.

24/7 support

The 24/7 support is set up to answer customers frequently asked the most common questions about Airbnb in our Help Center. Learn more about finding a place to stay, paying for your reservation, or what it means to host a place to stay or to host an experience.

How to Invest in Airbnb- Best Tips

There are numerous Airbnb investment opportunities but before you buy that stock, learn the investment strategies.

Data from a recent publication indicates that Airbnb’s IPO was in December 2020, meaning its shares are now available on the stock market under the ticker ABNB. The company went public at $68 a share, but it debuted in the market at more than $110/share.

It’s remarkable how high Airbnb shares price went given the Covid-19 pandemic and the impact on the company’s business. With a valuation of more than $100 billion USD, you wonder how pricy their stock is right now.

Airbnb pricing strategy- How to maximize profits

As with any other investment, a significant amount of research is required before deciding how much you should spend on a property, as well as how much you should list the property.

Well done, the Airbnb investment can be extremely profitable. Check out these tips for setting the price of your investment on Airbnb:

Run the numbers

As with any investment, the most important thing to consider when deciding whether or not to enter a business is the number. If you have multiple investment properties, try listing just one on Airbnb to see how you are doing.

How much can you charge? What are the occupancy rates? How much work do you put into this position? It is also possible to rent your primary residence on Airbnb.

Take a vacation and see how difficult it is to navigate the platform. Remember that the testing phase is essential.

Manage your rental as a business

If you have a property listed on Airbnb or 10, you should always manage your rentals as you would a business. What do we mean by this? Well, Airbnbs are basically hotels, aren’t they?

They are, in fact, the main competitor of a hotel. 5-star hotels achieve their status by exceeding their customers’ expectations. So, think about the needs of those to whom you will be renting your property.

An extra toothbrush in the bathroom, ground coffee beans in the coffee maker, or bottles of cold water in the refrigerator are just a few ways to show your guests that you care.

To show creativity

The most rented properties on Airbnb are those that are well furnished and photographed by professionals. So channel your interior designer and get to work. While it’s important not to be too eclectic with decor (after all, you want to appeal to the vast majority of people), it’s okay – encouraged, in fact – to be a little creative.

Is your rental located in a “beach” location? Play the mood with tiki torches and floral motifs. If you are in a city, consider suspended artworks that reflect the character of the city.

Subcontracting

When it comes to renting from Airbnb, be sure to leverage its strengths. If you are not the best interior designer, outsource this project. If you’re not the best at fixing a bathroom leak, outsource this project.

Time is an investor’s most valuable asset. So when you’re ready to delegate, you’re doing what’s best for you, your property, and, in the long run, your budget.

Identify your target tenant

Defining exactly the type of person who wants to rent your property will help you market it. If you want to attract better paying customers, you need to respect your share of the deal and provide a luxury experience.

If, on the other hand, your competitive advantage is the daily rate of your property, be prepared to do the work that comes with a constant turnover of tenants.

No matter who your ideal tenant is, be sure to bet on everything you know the “ideal tenant” would want your property to be.

Best Cities for Airbnb Investment

Knowing how to research real estate markets with short-term rental profitability in mind is the key to successful Airbnb investing. Ensure you run proper Airbnb market research. It will lead you right to the best cities for Airbnb investment.

How do you find the best city to invest in Airbnb property?

The first thing you need to note when investing in Airbnb properties is the laws and regulations. In recent years, many popular tourist destinations have dropped dramatically in short-term rentals.

Some places have completely banned Airbnb and vacation rentals. Others have banned non-owner-occupied rental properties. This means that real estate investors cannot purchase investment properties and rent out the entire unit.

Only people who live on the premises can rent their homes on Airbnb in those locations.

Below is a list of places with no Airbnb legal issues:

  • Milwaukee, WI
  • Gatlinburg, TN
  • Columbus, OH
  • Indianapolis, IN
  • Memphis, TN
  • El Paso, TX
  • San Antonio, TX
  • Philadelphia, PA
  • Kissimmee, FL
  •  Cleveland, OH
  •  Phoenix, AZ
  •  Tempe, AZ
  •  Mesa, AZ

Are there any concerns about Airbnb?

There are two major concerns right now: regulatory and safety. 

The regulatory problem stems from Airbnb’s impact on the traditional property rental market. As many homeowners earn more with Airbnb than traditional rent, the number of properties available for traditional rent is reduced.

This reduction increases the rental price of existing properties. This, in turn, makes it more difficult for citizens to rent property.

Airbnb alleviates the regulatory problem by working alongside regulators to avoid the problems that, for example, Uber has faced recently.

In terms of security, studies have shown that it can be dangerous for hosts to rent their properties on Airbnb. These security concerns have been very weak, but need to be mitigated.

To solve this problem, Airbnb has taken steps to alleviate these problems, which is also encouraging.

Wrap Up

Airbnb rental platforms can be very profitable, especially if you are patient and willing to do the job of attracting tenants and keeping them happy.

However, its operating costs are likely to be higher than those of a traditional rental property, and regulations have made it difficult or even illegal to invest in Airbnb in many places. Make sure you do your homework before you start investing in Airbnb.

If you do not like the idea of buying Airbnb stock, you can become an Airbnb Host and Make Lots of Money.

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