In Part 1 and 2 of this series, I discussed some of the pros and cons of becoming an Airbnb rental host. So what about location? Studies show that some of the most profitable Airbnb locations in any city are near colleges and universities, festivals, concerts, plays, sporting events, large employers, medical facilities, hospitals, and nature areas for hiking and biking. Based on this alone, it isn’t hard to understand why Phoenix hosted nearly 44 million visitors in 2017. If you’re a buy and hold investor, you may want to do some research to determine if your rental property would produce considerably more cash flow as a vacation rental.
We already know that a home’s proximity to attractions, sporting events and outdoor activities is important. And if you’re familiar with the area, you already have a good idea of where to begin. If not, a simple google search of “popular tourist attractions in Phoenix” is a great place to start. You can then search Airbnb for hosts in those specific areas to see what the average nightly rate looks like.
HINT: Leaving the booking dates un-selected will show the days the property is available. Obviously, a lot of unavailable days is a good indication of a high occupancy rate for a particular property, as well as for the general area.
You can also use a little-known service called Airdna to locate popular Airbnb areas. It’s a very robust system which pulls data directly from Airbnb. If you want to find out the top 10 Airbnb rentals in Scottsdale, for example, the information is readily available. Complete details can be found at www.airdna.co.
Once you have determined a great Airbnb location, we can help you locate “ready to rent deal properties” in that area, by using our own SmartMap Technology. Our system allows us to see what comparable properties are currently renting for. If the data shows 2-bedroom condos in Scottsdale are renting for $1500 per month long-term, the daily rate would be $50. But if your Airbnb research shows the average nightly rate for 2-bedroom condos, located in the same area are averaging $200 per night, would that pique your interest? Of course it would! Even at a very conservative occupancy rate of 50%, at $200 per night you could stand to pull in $3000 per month (before expenses), instead of just $1500 per month.
Obviously, not all areas or properties are cash cows when it comes to Airbnb. Sometimes it makes more sense to sign a long-term lease with a tenant, but there are definitely pockets in the Phoenix and surrounding areas that are worth investigating further. I hope this series gets you to think outside the box when it comes to Airbnb rentals.
Whether you’re buying fix & flip properties or buy & hold rentals, generating your own comps is an absolute must. We consider our “SmartMap After Repair Value (ARV) Comping System” to be the smartest comping system available. For fix & flippers, it quickly and accurately delivers the best “after repair value (ARV)” comps available. For buy & holders, it provides you with reliable rental data and accurate rental comps. There’s no doubt that having accurate and reliable data before you submit your offer allows you to buy your next investment property with confidence. Successful investors are saving valuable time and protecting their profits, and so should you!
Go to www.SmartMapComps.com and sign up for your FREE 10-day trial (no credit card required). If you would like us to find you the right property to fix & flip or buy & hold, tell us what you’re looking for at: www.TheEquityFinders.com/get-started/ and we’ll be happy to help you.
by Marco Leone