Is there ever an ideal time to invest in Airbnb? Most likely not, but there have been worse times to invest. It may not be the best time to launch a worldwide pandemic… Is that correct? We wanted to see how the Airbnb investment market was faring in the aftermath of COVID. In addition, how the new strain of fear may jeopardize investors’ huge ambitions for 2022 and beyond.
We are frequently asked, “How do I determine when to invest in an Airbnb property?” To be honest, you won’t realize it’s the best time until it’s gone. That isn’t going to help any of us.
Instead, consider what you can forecast and research. Rather than focusing on when you should invest, consider how, what, and where you should invest. This will increase the likelihood of your investment’s success. The more you plan, the less important the time of the investment becomes.
Disclaimer: A badly planned and researched investment will almost certainly fail, regardless of when you make it. If you fail to plan, you plan to fail.
Where to Invest in an Airbnb Property When Looking for a Property
Choosing the appropriate location is more than half the battle when it comes to succeeding with Airbnb investments. You could waste a lot of money if you don’t put in the effort to select the right place.
The first step is to determine whether you believe you are competent in maintaining a vacation rental property from a distance. You’ll need these remote Airbnb management tools if you are. There is a lot that goes into remote Airbnb management, and having a physical presence is only half of the equation. To check guests in and out, you’ll need everything from a dependable cleaning team to a handyman and a manager.
When determining if a given site is a viable investment, we consider a few things. First, let’s have a look at the occupancy rates. First, by year, and then, in slightly greater depth, by studying these rates month by month. Investing in a place that only receives bookings three months out of the year is not the best investment option. You can make a decent living during peak season, but if you don’t get a single booking during the off-season, the investment isn’t worth it.
Let’s talk about dynamic pricing and how using dynamic pricing and revenue management technology like DPGO will significantly improve your occupancy rates. However, even dynamic pricing cannot generate guests when there are none. What it can do is attract the few visitors who come to the area during those historically quieter times.
Second, we examine market supply. If there aren’t many listings in the market, it might signify one of two things: either the market isn’t popular with visitors, or you’ve seen these stats during the off-season and hosts have chosen to remove their listings from the market.
Then we examine the Average Daily Rate (ADR). You must examine this on a monthly and annual basis. This will provide you with an overview of the overall health of the short-term rental industry in that particular location. This information will allow you to create a financial road plan. It will assist you in determining whether your chosen site is viable.
Lastly, we look at Minimum Night Stay regulations. Not only do these provide information regarding local short-term rental regulations, but they also illustrate market standards in terms of how long guests decide to remain.
Where Can I Find These Suggestions?
All of these measures (and more) may be seen on the DPGO Markets page for free. All you have to do is enter the name or postal code of the location you want to look into, and we’ll show you a variety of market insights for free. This contains market supply, average daily rate (ADR), average occupancy rate, pricing factor by day of the week, and more. You can also sign up for monthly market updates.
How to Invest Wisely: Rental Arbitrage or Property Purchase?
This is a blog post about investing in a short-term rental property, but we wouldn’t be complete unless we showed you the alternatives. In the last five years, rental arbitrage has surged in popularity. It’s so popular because it allows business-minded people to profit from the vacation rental market without putting a huge sum of money into property ownership.
Rental arbitrage is a practice in which individuals rent a home long-term and then list it on short-term rental services such as Airbnb or Vrbo. Of course, authorization from the property owners is required, and you will almost certainly need to obtain various insurance coverage to ensure that no harm is done to property that you do not own.
Purchasing your short-term rental property, on the other hand, entails additional dangers. It does, however, allow you to tweak the appearance and layout of your listing in order to appeal to your ideal audience. Rental improvements and the selection of Airbnb furnishings enable you to make an enticing listing and, hopefully, enjoy a high volume of bookings!
What to Invest In: Which Property Types Are the Most Profitable?
We’ve heard a lot about which kind of rentals are the most successful on sites like Airbnb in recent months. While we are data experts, comparing a listing to a listing of a different type is difficult. There are several things in the short-term rental business that cannot be quantified, and one of them is distinctive attractiveness.
We did witness a large spike in bookings on Airbnb after the initial relaxation of COVID limitations, and while unique stays were popular, they were not as popular as typical housing categories like houses and condos. This is most likely owing to the fact that there are fewer of them on the market, which is why we cannot compare their popularity to that of apartments and homes.
Unique stays are nice, and they do bring a new draw to short-term rentals, but we believe you’d be better served financially by investing in a house or an apartment, depending on your budget.