Those who are looking to start a short term rental business will need to make sure that they are doing the proper market research. In fact, effective market research is typically the difference between abject failure and sustained success. While some may find a cute residence and believe that the hard part is over, nothing could be further from the truth.
Investing in AirBnB is much like any other investment in the realm of real estate. Doing the work up front is what allows the investor to avoid mistakes. Knowing everything that there is to know about the market is key. There are crucial questions that need to be answered as well.
How much can be charged per night? What are the overhead expenses going to be? What are the most important local attractions to travelers?
The Importance of AirBnb Market Research
There are helpful calculators that will allow would be investors to receive a quick estimate when it comes to the revenue generated by a potential AirBnB. This lets the investor know what to expect and gives them a much needed baseline to work with. Once the investor has decided to move forward, it is time to compile more information about the market in question.
To get started, head to the AirBnB website. Look up “Homes” in the city. From there, select the option for “Entire Home”. This keeps the investor from wasting their time looking at private rooms or shared rooms. Renting out an entire residence is not only more profitable, it is also much easier from a managerial standpoint.
Filtering out the number of rooms is also a key step. Once the proper search terms have been set, it is much easier for the analysis to begin. Take a look at the listings that have been given the best reviews. This lets the investor know what is working for these properties. It also provides a baseline of expectations.
For example, if the price ranges somewhere $200 per night, this means that the investor can count on roughly $4,000 in monthly revenue without having to rent the property on a nightly basis. Experts will recommend investing in properties that allow investors to turn a profit, even when they are only occupied for 50 percent of the month.
Learning More About The Market
As soon as the investor learns more about the areas that experience the highest level of success, they are able to isolate the short term rentals that work best for their needs. Learning about the various neighborhoods in a specific marketplace is important. It is time for the investor to place themselves in the shoes of a visitor.
What are the local attractions that they will be most interested in checking out? Are there any sports arenas or shopping centers that visitors like to frequent? Those who are looking to supplement the information that they already have on hand will want to make sure that they are taking a closer look at Yelp reviews and Google searches.
Cross references these searches with the AirBnB database. Take a closer look at the headlines to find out more about the marketing strategies. Since these AirBnB owners have already been in business for a significant period of time and have experienced success, they know exactly what the consumer wants. In other words, much of the work has already been completed. All the investor has to do is use the information at their disposal.
Becoming an AirBnB entrepreneur may seem challenging but in reality, it is one of the simpler forms of investment available today. The barrier of entry is much lower than most investors realize. Since so much of the work has already been done, all the investor needs to do is follow in the footsteps that have already been carved out. Accessing all of the useful information that is already in place is pivotal.
Hopefully, all of the aforementioned data will be easy to utilize during the journey to come. The short term rental market is waiting to be conquered. By taking the time to research the marketplace and learn more from the trials and errors of others, an investor can avoid the usual mistakes and swim with ease.
As usual, we recommend to use property analysis software to properly calculate your investment return before buying any property!