New Year, New Investment

by | Dec 28, 2022 | home purchase, investment home, real estate

There’s no question that Airbnb has permanently changed the travel industry. If you’ve stayed in an Airbnb rental, you may have wondered what it would be like to be on the other side… We can see the appeal! By becoming an Airbnb host, you can diversify your income without needing to be a real estate expert. Airbnb’s rise in popularity has made this potentially a solid approach to buying an investment property.  Here’s some info you should know before diving in:

Airbnb Investment: How Does It Work?

If you’re looking for passive income, a real estate investment may be a good option to consider. But what is the difference between a traditional investment property and an Airbnb? A property is considered an Airbnb investment when either part or all of the property is rented out on Airbnb after purchase. These rentals are typically short-term, which allows you to host many guests throughout the span of the year, where traditional investment properties are most commonly rented to long-term tenants.

Is An Airbnb Property More Profitable Than A Conventional Rental Property?

Because each investment is unique, there’s no quick answer to this question. But in high-demand areas, the nightly cost of an Airbnb can lead to higher profits.

For example, the average monthly cost of a beach house on the Jersey Shore is about $1800 a month, meaning you could make roughly $22,000 if your tenant signs a 12-month lease. But short-term bookings are able to charge more per night, which means you could make more. According to AirDNA, the average daily rate for an Airbnb on the Jersey Shore is $342 a night and is typically occupied 65% of the year. This means you could make over $81,000 off of your rental – a pretty significant $59,000 more than you would through traditional renting. Airbnb also charges renters a maintenance fee, which means you may save on necessary repairs.

Unique Expenses Of An Airbnb Investment

Managing an Airbnb involves several unique expenses you should consider, including:

  • Furnishing and decorating the property
  • Maintenance
  • Utilities
  • Amenities such as television subscription services

What Kind Of Property Should I Buy For An Airbnb Investment?

Despite what some may think, an Airbnb investment does not need to be a vacation home as many use Airbnb for business travel and other life events. This means it’s possible to have a profitable Airbnb regardless of where you’re located!  Prospective Airbnb investors should look at local listings first to see what kind of properties are in demand where they live. You can also rely on Roman Balandin Realty to help you choose the right property for your investment.

Do I Need To Live Near My Airbnb Rental?

The short answer: no. Although it is more convenient to be located near your Airbnb property, it’s not entirely essential.  If you choose to invest in a property that is not near your primary residence, you will likely need a property manager but that may not be a bad thing. Some experienced Airbnb hosts find great value in having the help.

Long story short, Airbnb can be a great investment and lucky for you, RBR is a market expert in many popular coastal communities and cities in NJ. Let us help you find the right investment property!



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