There’s serious money to make through Airbnb – at least with the right location and property on your side.

In fact, here locally in New Hanover County, Airbnb reports a collective $12.9 million for homeowners from 2018, hosting 85,000 guests. Also, according to a recent analysis of the top 15 U.S. cities, Airbnb hosts earn over $20,000 per year on average – and that’s just for two-bedroom properties.

Purchasing an Airbnb property is simple. You find a home, you make an offer, and you close on the property. The hard part? That’s in finding the right property to begin with, not-to-mention the right Realtor locally to aid you with your search.

Of course, you can search potential properties on a local multiple listing service (MLS), Zillow, Trulia, Redfin, and more – but what exactly are you looking for? What makes a good investment and an attractive short-term rental, and what makes a bad one?

Here are our best tips.

Top 5 considerations when buying an Airbnb property

There are different distinctions when it comes to buying the right Airbnb property. Ranging from location and size to price and even local accesses, it all plays a significant role in how successful your rental can be – and how much money you will make in return.

If you’re interested in getting into the short-term rental market and leverage Airbnb’s earning potential, here’s what you should take into account:

1. Type of Property

Before you can begin your search, you need to determine what type of property you’re going for. This can be a task to discuss with your local realtor, since they will know all of the main tourist areas as well as the best types of homes to accommodate those tourists.

Narrow it down exponentially, is it a house, condo, or apartment? What size is it? A six-bedroom estate could command a higher rental rate, but how often will it get rented? This will also mean more upkeep.

Do a thorough google search to put yourself in the shoes of a would-be tourist, or go through the process of visiting the area yourself. This will help you find what brings those out-of-towners to the area. Are they singles, couples, or families with kids? Get into their mindset, talk with your local realtor and let that guide your property search.

2. Profit Potential

In your decision-making process, the potential property’s profit also needs to play a key role. For starters, head to Airbnb.com and use this tool to estimate any properties potential earnings. Of course, this is just a rough number, but it can give you a good idea of whether a property you’re looking at is worth the investment and just how much you may be able to command for it.

Airbnb also offers an in-built smart pricing tool, so your ultimate price strategy won’t fall on you alone. The tool allows you to take advantage of demand surges in the area, alerting you to up your rates when searches are high and reducing them when visitors are low.

3. Location and Accessibility

Real estate is all about location, and if you want your Airbnb to be profitable, then you need to think long and hard about where your property is situated. This will be another area where your realtor can help you out and bring you to conclusive decisions, such as:

• Location in general: Is it within driving distance of major cities? Is it a place people like to visit or have a reason to visit often? Does the area have plenty of events, amenities, attractions, and culture?
• Location within the city: Does it offer easy access to amenities and hotspots? Is it near the airport or train station?
• The neighborhood: Is it a safe community? Are the homes rising in value (in case you decide to sell it at some point in the future)? Are short-term rentals allowed?
• Accessibility of the location: How easy is it to get around the area? Is the traffic bad surrounding it? Does it require a gate code or any home-owners association (HOA) fees? Do Uber and Lyft service the neighborhood?

4. Competition

Research what the short-term rental market is like in the area you’re looking to buy within. Do a quick search on Airbnb, VRBO, and others to get a general idea for what’s already out there. If the market is heavy with competitors, you’ll need to find a property that really stands out from the rest and offers something special.

But, you could spot a market opportunity as well. Are there very few three-bedroom homes? No studio condos available for the avid surfers or solo business travelers? This may well be your sweet spot.

5. Upkeep & Expenses

Another consideration to keep in mind as you hunt for your short-term rental property – maintenance and other expenses. Aside from any initial fixing up you plan on doing, you’ll also need to keep the property in good repair, cover taxes, insurance, and mortgage costs, tend to the lawn and housekeeping, and stock all supplies between guests.

On top of this, Airbnb generally charges hosts a flat 3% fee. Depending on how involved in the process you want to be, you may also need to budget for a property manager and added home insurance (as you may want to protect yourself beyond Airbnb’s Host Protection Insurance).

Property investment, especially for short-term rentals is a growing trend and a high-yielding return for various markets. For us, being a local beach area with tourism throughout the year and different areas of interest – this leads to great opportunities to invest in a property.

As we face uncertainty in our current climate, you can be rest assured that real estate returns exceed stocks with significantly less volatility! In fact, since the early 1970s real estate has beat the stock market nearly 2:1.

So, how can we help you find your Airbnb property? Make Wilmington, North Carolina and the surrounding beach areas your next or first short-term rental property!

Not quite ready to buy? Then check out The Salty Seahorse based in Carolina Beach – one of our premiere options for short-term rentals and stay for awhile. Experience the sun, sea, sand, and get an inside look into the world of short-term rentals!