Did you know that according to the latest statistics found at VisitPhoenix.com that the city of Phoenix hosted nearly 44 million visitors in 2017, including more than 1.8 million international visitors? The top activities these visitors participated in included shopping, fine dining, visiting our state and national parks, swimming, visiting landmarks and historic sites. The bottom line is that the Phoenix area is a very popular destination place for visitors from all over the world. And where do you suppose many of these visitors are staying while in town?
You guessed it… short term vacation properties, also known as “home shares,” like Airbnb, VRBO and Home Away to name a few. Did you also know that short-term rentals can command higher nightly rates, which “in some cases” can produce much higher ROIs than traditional month to month rentals? I want to place emphasis on the “in some cases” part. Because of course all of this depends on one thing…
Location, Location, Location! Studies show that some of the most profitable Airbnb locations and attractions in any city include colleges and universities, festivals, concerts, plays, sporting events, large employers, medical facilities, hospitals, and nature areas for hiking and biking. Not to mention people relocating from other areas, business travelers, retirees, and of course tourists are always in need of a short-term place to stay!
Based upon this information alone, I’m sure you’re beginning to see why the city of Phoenix hosted nearly 44 million visitors in 2017. And if you’re a buy and hold investor, you may want to do just a bit of research to determine whether or not your rental property would produce considerably more cash flow as a vacation rental. Just remember that running a short term vacation rental business is not the same as leasing out your home and providing a minimal level of service such as urgent repairs.
Listing your property on AirBnB puts you squarely into the “Hospitality Business.” In other words, you are no longer simply leasing out 4 walls and a roof. And the role you play is more akin to that of a hotel concierge or a tour guide. In addition to providing a furnished home, casita, condo or townhouse, you’ll also be providing amenities such as Wifi, TV and Cable, plates, dishes, cooking utensils, complimentary bottled water, as well as provide directions to nearby landmarks and answer questions about the weather and so on.
Having said all that, you may be thinking that this is a lot of additional work and expense and not at all what you had in mind. However, if you’re willing to embrace the fact that running a short term rental business is a lot less hands off than managing a traditional rental property, the rewards can be tremendous as well as extremely lucrative.
And in part 2 of this article series, I will be sharing some little-known secrets you can use to run your Airbnb vacation rental business virtually hands free by simply assembling the right team and using state-of-the-art tools. In the mean-time, please visit TheEquityFinders.com to learn how our complimentary Smart Map ARV Comping System can help you to locate and research profitable fix and flip or buy and hold investment properties the smart way!
by Laura Leatherdale