4th June 2018
4 Things to Consider Before Buying a Property for Airbnb
Buying a home is very different from buying an investment property, and in the same light, buying an investment property for Airbnb is unique to buying one for long-term rental. Short-term rental properties have their own draw-points that make them quite different from other investments – particularly in New Zealand. It’s crucial to consider these factors pre-purchase, to make sure you make the best decision and that you see the best return possible.
With Airbnb changing the way people look at the accommodation industry, all over the world, short-term rentals have become increasingly popular. More property owners than ever are experiencing the benefits of Airbnb over long-term rentals. As a result, it’s now common-place for investors to purchase property for the sole purpose of letting it out through websites like Airbnb and Booking.com. Many have found success with this method of investing, but, it’s definitely not a get-rich-quick scheme.
Short-term renters have different expectations from their accommodation than long-term tenants. Guests searching online for a place to stay for a brief period are much more specific with what their requirements are, and with the amount of listings online now – they’re able to be. They’re using keywords, filters and map visualisations to find the perfect place for a trip. If your property doesn’t match what they need, it won’t be making the cut.
While your guests will always be unique in their reasons for requiring short-term accommodation, there are always some consistent factors that attract people through Airbnb and other similar services. To get the best results from your short-term rental, it’s important to consider these and to make sure your property is appealing to potential guests.
Here are four things to consider before buying a property for Airbnb:
Location, Location, Location
One of the most important factors of short-term rental success is the location of the property itself. Just like you do when buying a regular investment property, you need to consider where your potential guests or tenants will want to live or stay. However, unlike long-term rental properties, your options are much more limited.
Location is the key to succeeding on Airbnb. If your property is not in a desirable area, it simply will not be found by guests. Those searching for accommodation on Airbnb look at the exact location they want to be in for a short period of time. There’s not much room for compromise. Guests are generally using Airbnb when they’re visiting somewhere for a purpose and they want to stay near this purpose. Before buying a short-term rental property, think about the popular places people want to stay in your city. The best bet for Airbnb is usually in city centres, close to public transport and other tourist hotspots.
If you’re considering an Airbnb property in New Zealand, for example, the most suitable area is Auckland Central. Choosing the ideal location will ensure that Airbnb is a worthwhile investment.
Guest Access is Key
As people can arrive at your property at different times to check-in, it’s important to consider how they’re going to get inside. Will you meet them as they get there? Or, are you going to be expecting guests to check-in by themselves?
Guest access can be one of the trickier aspects of renting a property out on Airbnb, especially if your property is in a secure building. Before diving into the world of short-term rentals, you should definitely consider how you’ll approach check-in and check-out time, and whether your prospective property is suitable.
The size of an Airbnb property is a key factor to consider on your search, however, there is no right sized property to go with. Big, medium and small Airbnbs all have their audience, and they can all be successful as investments. You just need to choose which one is right for you.
Your property’s size will determine the type of guests you will receive, the amount of time you spend maintaining the property and, in some cases, the amount of money you earn. While obviously more beds generate more income, more space also equates to more effort cleaning, preparing and maintaining. The size you go with for your Airbnb investment should depend on your needs from your property.
Have a Point of Difference
With thousands of Airbnb properties listed in Auckland alone, it’s essential that your property is able to stand out and not get swallowed by the competition. A unique selling point for your listing is one of the easiest and most effective ways to do this.
One of the initial reasons Airbnb became popular was due to the availability of interesting listings. People were attracted to the website through hearing about unique accommodation, different from traditional hotels. Castles, treehouses and one of a kind architecture were huge draw-cards for travellers. While Airbnb has moved more towards the mainstream now, guests are always going to be attracted to unique, beautiful and exciting places to stay.
A point of difference can be thought about before buying a property. But, it’s also possible to create them with decor and creativity. Here are some popular unique selling points for Airbnb:
- Thoughtful interior design (unique colours and features)
- Views of cities, harbours, mountains
- Outdoor spaces
- Heritage buildings
While there’s no single right answer to choosing the ideal property investment, learning about the Airbnb market and what guests are looking for can help you make better-informed decisions. Short-term rentals are different to long-term tenancies, and in some cases, they can require more thought and effort. However, with the right choices and management, they can also offer more income too.
Keeping these four factors in mind while on the hunt for an Airbnb property can help you find success with investing in short-term rentals. For more information about Airbnb rentals or Airbnb management, please feel free to contact the Zodiak Management team.