Real estate investors and home buyers are increasingly using the Airbnb Business Model for short term rental income. And it makes sense: given the sky-high home prices and inflated housing market bubble in 2021, it is difficult for real estate investors to good cash flow on a long-term rental.
Short term rental companies like Airbnb and Vrbo offer real estate investors an alternative. Instead of leasing their investment property to a tenant for 12 months, they can lease the property to multiple short term tenants over the same period. This business model provides a better stream of cash flow than the traditional rental.
But returns are higher in some cities compared to others! Beach destinations across Florida – including markets such as Penscola, Naples, Sarasota, and Boca Raton – offer compelling returns for an Airbnb business. Similarly, southwest cities in Arizona and Nevada such as Glendale, Scottsdale, and Henderson provide good returns.
Markets that aren’t so good? Those would be big, dense coastal cities such as New York, Boston, and San Francisco. In these markets it’s often a better idea to stick with the long-term rental since the revenue is similar and the costs lower.
Of course – Airbnb and short term rentals do have their drawbacks. As we see in the video with the Nashville example, the operational expenses are much higher, including items such as occupancy taxes, commissions, and higher utility costs. Additionally, it is a significant amount of work to run an Airbnb investment. After all, it is truly a BUSINESS.
Anyone looking to get into Airbnb or short term rental investment needs to make sure they have the time and dedication required to make the operation successful.
^Search a city such as “Boca Raton, FL” and it will show high level stats such as rate, occupancy, bedroom size, and number of listings.
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0:00 Airbnb: More $$$?
3:07 Highest/Lowest Nightly Rates
7:13 Occupancy % also Matters!
10:32 Key Metric: RevPar
12:03 Nashville STR Example
15:10 STR more Revenue than LTR
17:01 150 Cities Compared
20:12 What does Income Look Like?
24:23 3 Risk Factors for Airbnb Investors
28:08 Should You do a STR?
#Airbnb #RealEstate #ShorttermRentals