Airbnb and other home share apps are still running strong, but the competition is getting a lot more fierce now that these apps have been mainstream for over a decade. Demand for high-quality rental properties is incredibly high these days, and prices have gotten downright ridiculous in many markets. Fortunately, there are still plenty of suitable short-term rental properties on the market, if you have the patience to find them. These simple tips will help you better identify good options when you’re buying an Airbnb property.
What to Look for in an Airbnb Property
To find the right Airbnb property, you should be on the lookout for certain characteristics, such as amenities, location, and other unique features. Properties in great locations with lots of amenities have the best chance at generating steady bookings, so they’re usually the best ones to target if you can get a good deal.
Perhaps the most important part of finding a profitable property is getting a good deal. Higher interest rates have squeezed margins for many real estate investors, especially those looking to acquire new properties. Worse yet, many markets are experiencing tight inventory conditions, which are driving up prices even more.
Before you put it an offer, make sure the numbers add up for you and your business. It can be the best Airbnb property in the world, but it will never work out if your overhead is too high to turn a profit.
However, if you take the time to find the right deals, there are plenty of suitable properties for Airbnb left on the market.
What Makes an Airbnb Property Profitable in 2024?
There are many factors that can help make an Airbnb property profitable in 2024. Potential tenants are invariably going to be looking for places to stay that are in the vicinity of appealing locations. Some of the indicators that signal a more profitable Airbnb property include proximity to tourist attractions, business districts, and unique local features. These factors contribute to higher occupancy rates and rental income.
For example, let’s say that you buy an Airbnb property that’s situated just 20 minutes away from a major business district. This property could be highly appealing to people who temporarily require a place to live as they go on interviews or relocate to the area.
When you purchase a property in a good location, more people will want to live there, which should increase occupancy rates and reduce vacancies. If the property is located in an area with high tourism or unique local features, you’ll be able to more frequently increase rental rates, which should allow you to build your income.
How to Identify Quality Properties in Competitive Markets
To find quality properties in more competitive markets, use data analytics tools and resources to discover properties with high booking rates and consistent rental performance. Properties have a history. By researching this history, you can determine the viability of an Airbnb rental before you even make an offer.
You can also leverage real estate market trends and local tourism data to identify promising rentals. Search for beachfront properties, single-family homes, and cozy getaways that are close enough to tourist attractions to appeal to potential tenants.
The tools you use to analyze properties can also give you the data you need to determine if the area is receiving a high amount of tourist traffic. When you’re looking for the ideal Airbnb property, make sure property values in the area are increasing. Higher property values indicate that homes in that location will be suitable for short-term rental purposes.
Financial Considerations When Vetting an Airbnb Property
When you’re vetting an Airbnb property, there are specific financial considerations that you should acknowledge. Look for metrics like occupancy rates, average daily rates, and potential for seasonal earnings.
For example, Airbnb properties are most popular around holidays like Thanksgiving, Christmas, and New Year’s Eve. People often travel to visit friends or family, which means that they’ll need places to stay. Airbnb properties near urban locations perform the best around the holidays.
As for occupancy rates and average daily rates, these metrics allow you to determine if you can make a profit and how often you’ll need to contend with vacancies. A property with high daily rates but low occupancy rates might benefit from a price reduction.
Keep in mind that local regulations, zoning laws, and taxes can impact the profitability of an Airbnb property as well. Make sure that local regulations allow Airbnb properties. You might also want to avoid areas with high property taxes.
Best Amenities and Property Types for Attracting Guests
The right amenities and property types are able to cater to market demands and attract more guests, thereby boosting profitability for your rental. You’ll discover that the types of amenities that appeal to short-term tenants differ somewhat from those that long-term tenants seek.
Some of the most sought-after property features for short-term rentals in various markets include private pools, urban location proximity, and beachfront access. Make sure you provide a fully stocked kitchen as well.
Best Tools for Airbnb Property Analysis in 2024
While there are dozens of different tools that can help you make sound investment decisions, some options that will allow you to effectively analyze properties include AllTheRooms, Mashvisor, AirDNA, STR Search, and BNBCalc.
By helping you perform comprehensive data analysis, these tools allow you to make informed purchasing decisions.
Closing Thoughts on Airbnb Markets in 2024
To choose the right Airbnb property, you’ll need to perform a detailed market and property analysis. If the Airbnb rental has a lot to offer and is located in a good area, you’ll benefit from a higher number of potential tenants.
Use the tools mentioned previously to analyze any short-term rentals you’re thinking about making an offer on. Thoroughly review and consider all discussed factors in this guide before buying an Airbnb property to ensure optimal returns in 2024.
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