BUYING AN INVESTMENT PROPERTY FOR AIRBNB: Pros Buying an Investment Property for Airbnb in 2023 

One of the major ways of investing in real estate is buying an investment property for Airbnb. How do you invest in the said properties in 2023?

It’s without a doubt that Airbnb properties have changed both the travel and real estate industries. If you’ve booked one while traveling or on vacation, you might wonder what it’s like to own and operate one.

Pros and Cons of Buying an Investment Property for Airbnb in 2023 5 Steps to Buying an Investment Property for Airbnb

And we understand why you’re interested. Imagine the possibility of making a handsome passive income without having to lift a finger. Besides, you don’t even need to have a lot of knowledge or experience in investing to get started.

But there’s another side for you to consider. Simply buying any Airbnb investment property in any market isn’t a guarantee that you’ll achieve your income goals.

In today’s article, we will look at the right way to invest in investment property for Airbnb.

Pros Buying an Investment Property for Airbnb in 2023 

Over the years, buying traditional rental properties has proven financially rewarding. But Airbnb rentals are becoming even more profitable if done right. Let’s look at the pros and cons of investing in Airbnb properties in 2023:

There are many reasons why many real estate investors are considering buying Airbnb investments. The reasons include:

Higher Potential Profits
Airbnb rentals have gained popularity for their potential to provide a higher monthly rental income compared to long term rental properties. While every investment is unique, Airbnb rentals will provide higher profits in high-demand markets.

Let’s look at Los Angeles, for example. According to Mashvisor, the average Airbnb rental income is $3,673, with an occupancy rate of 63.45%. On the other hand, the city’s average long term rental income is $3,100.

As you can see, there’s potential to make well over $44,000 a year with an Airbnb rental property in Los Angeles. It is roughly $7,000 more than you’d make with a long term rental investment in the same market.

Additionally, Airbnb rental investments are expected to remain profitable in 2023. While markets continue to melt and inflation remains high, the demand for Airbnb properties is still high. 

The most recent international travel forecast by US Travel shows that there will be roughly 65 million foreign arrivals in 2023. It is a sign that people will continue to travel and spend money on vacations amid the high inflation. In fact, travel rates in 2023 will beat the rates in the past two years.

It is the number one reason you may want to learn how to buy Airbnb property with no money. 

Passive Income & Cash Flow
Cash flow and income are major reasons investors consider buying real estate investments. Cash flow refers to the amount left after you settle all property expenses. 

A property that offers positive cash flow leaves you with handsome profits after paying for the expenses. With negative cash flow properties, you’ll need to pay for the expenses out of your own pocket. Of course, you want to invest in properties with positive cash flow.

Airbnb rental properties offer excellent cash flow if you invest in the right location. A good location receives a constant flow of visitors so that you enjoy a good occupancy rate across the year. A good occupancy rate means you’ll earn more money than the total property expenses.

The best thing about all of it is that you can charge as much as you want. For example, if you own an Airbnb investment property adjacent to the beach, you can raise the nightly rates once you experience increased demand.

Also, buying an investment property for Airbnb often requires significant effort at the beginning. Once you’ve set up the business, you can get a property manager to take care of the day-to-day property operations for you. It allows you to enjoy a monthly passive income.

Flexibility
Buying Airbnb investment properties gives investors a lot of flexibility. Firstly, as we’ve already mentioned, you get to choose your nightly rates depending on the season and rate of demand. 

You can raise your rates when the demand is high during the peak season or on weekends. Similarly, you can lower the rates when the market is a bit dormant to encourage more bookings. You can also offer discounts for long-term or mid-week bookings.

In short, Airbnb properties allow you to try out different pricing strategies to see which one works best for you.

Secondly, you can rent out the property when you want. Some Airbnb owners pull their properties off the market during the off-season to use them themselves. You can also choose to host your friends or parties on your property.

No Lease Contracts
Many Airbnb property investors enjoy the fact that they don’t need to sign lease agreements with their tenants like they would with long term rental properties. The only situation when you may need to ask your guests to sign lease agreements is if you’re subletting.

Why don’t you need a lease agreement with Airbnb properties?

The terms and conditions on the Airbnb platform are enough to protect you and your property. If one of your guests damages your property or furniture, you can simply contact Airbnb. Then, you can lodge a complaint instead of going through time-consuming legal battles.

If you feel the need to, you can draft an Airbnb property agreement for you and your guests. While it might discourage some potential guests from booking, those who do end up being great tenants.