It is important to have multiple sources of side income other than the main one, i.e. your job or your business, to fulfill all the basic necessities of life because the fast life that we’re living demands to proceed this way. However, there are some passive jobs that need your full attention and cannot be after investing because of the very obvious reasons, out of which the essential one is the maintenance of the investment that you’ve bought. A property has been the all-time favorite and one of the most reliable forms of profitable investment.
However, a property might be simple to buy but the aftermath associated with it is a bit complicated and need to be discussed beforehand to avoid misfortunes and regrets in the future. As much as we would like to deny the fact but the property for investments are also most likely to be risky if proper calculations and homework are not done before making the final decision. Therefore, it is important to look for ideas and platforms that are reliable enough to be trusted for the amount and time that you’re investing, such as Airbnb.
What is Airbnb?
Airbnb is a property investment platform for those people who wish to invest their money in a property that is based on short-term rentals such as hostel, lodges, hotels etc. The main concept behind this idea is to provide investment opportunities to people who can earn a lot in small intervals by renting out their property to numerous people from time to time. This way, their property does not get stuck on a single party which is meant to return a profit that is incomparable. The logic is simple; if you buy a property and rent it out for a worthy amount then you’ll have the same amount of earning for at least a year.
However, if you own a property that is meant to be rented out to different people after every week or month then it is obvious that the income made would be much bigger than the previous one. Hence, people now prefer to invest in the Airbnb rental properties for making their effort, time, and money all worth it.
Things to consider before buying an Airbnb rental property
Every property investment needs proper homework which consists of investigating the location and the possible pros and cons attached to it. Thus, if you’re thinking to invest in an Airbnb short-term rental property then make sure to consider these 5 things which prove to be beneficial for the investor in the long run.
The local property rules and regulations:
This is the first and the basic rule of buying a property. Investigating the local laws, rules, and regulation regarding buying a property in the specific city or country is extremely important as it also helps in getting the correct estimate of earning the money back. Here are some of the things to be kept in mind that might be related to local property ordinance:
· After how much time can you start renting the property? Is there any specific time limit?
· What are the taxes related to the property and the procedure of paying?
· What happens if you fail to keep up with the commitments to the locality’s regulations?
· What are the local standards for basic maintenance of the property?
· How long might it take to make the first agreement for the rental property?
· What is the local property registration process and is there any extra fee to be paid for it?
All of these questions must be cleared beforehand to avoid any sort of confusion and misconceptions to the big idea of the property investment.
Calculate the expenses linked to the property:
When you buy a property with the intention of investment then there are loads of expenses attached to it which must be properly taken care of. If not, then it affects the return and overall costing of the property that is harmful to the investment made. The maintenance charges applied according to the local setup and the in-house maintenance that is necessary for providing a luxurious living to the tenants is as essential as making a living out of it. Lighting, woodwork, proper kitchen tools etc. are some of the examples of the things that need to be maintained for a reliable rental living.
Be prepared and updated for the competition:
When it comes to investing in an Airbnb property, the fact cannot be denied that you’re not the only one who’s buying a rental property and will be making a profit out of it. There are countless other individuals and groups that have invested in the properties through Airbnb and this is exactly how a competitive investing is done. Airbnb is providing a platform to numerous people other than therefore, be prepared for the completion and keep in mind the fact that it might take some time for your property to rent out to the right people.
Do not consider it as a passive income:
Buying property for renting purpose might be considered a passive income but a property renting platform like Airbnb is not one of those. It requires proper time and attention to maintain and keep an eye on the property to remain aware of the current happening surrounding your property. Therefore, do not step into the business considering it a passive job because it is as time-consuming as any other business.
The risks attached to it:
The risks attached to the Airbnb rental property include:
· The property might not provide the desired results in terms of renting amount.
· The local government has all the rights to the property which is an alarming sign.
· The tenants might destroy your property that will cost you more than the income made.
· There might be some issues related to the tenants such as complaints from the neighborhood for which you will be accountable.
No doubt Airbnb is helping the property investors in a lot many ways with the success stories surrounding it. However, the above-mentioned facts must be kept in mind prior to creating high expectations for the property to ensure a secure and reliable investment.