Investing in real estate is one of the wisest ways to protect your money and grow a retirement fund. There are many ways to invest, however, and some are better than others depending on your situation. A very popular way to invest these days is to buy a 2 bedroom apartment rental to rent out for short-term lets on Airbnb.
Although it is a great way to make money, many people make some common mistakes that result in them leaving money on the table or even operating at a loss. The mistakes range from minor that can easily be remedied to disastrous and usually requires selling and starting over. In this article, we will go over some of the common mistakes so that you can avoid them.
1 – Wrong location
It is very important to always remember that Airbnbs are short-term rentals. The location where you buy needs to attract many people that need to stay for a few days at a time before moving on. On the other hand, if you’re in need of a furnished room for rent in NYC, there are a few different options to consider. One option is temporary housing, which can be found through companies like Airbnb and VRBO. Another option is coliving, which is a type of housing arrangement where residents share common living spaces. Coliving companies like SharedEasy offer furnished rooms for rent in NYC.
The mistake many owners make is purchasing a property where they find a bargain or where they live already. The problem is that these areas may or may not have people looking to stay there for the short term. You have to research the area well to understand if there will be enough visitors to be able to have your property booked for most of the month and year. The Botany at Dairy Farm has easy access to public transportation via bus and train stations.
If you’re looking at Texas real estate, for instance, then you need to research a bit to find the areas where there are enough tourists visiting or business travelers that need a place to stay for only a little while. If you make this common mistake of not doing so, you run the risk of an empty property that you are better off selling since you won’t make what you are paying for a mortgage.
2 – Wrong type of property
The location is not the only mistake that many landlords make. The type of property is also a very big factor, it is important to understand the needs of the people that are looking for a short-term rental.
For instance, if you expect business travelers to be the majority of the renters then you need to make sure that you buy the type of property they need. It’s likely they will only need a small apartment with some space to use as an office for work.
A family traveling to the Disney area will probably want a house so they have enough room for everybody and can do their cooking at home to save money.
3 – You didn’t screen the renters
One of the biggest benefits of using Airbnb as a way to rent out the property is that people have a rating so you can see if they are going to be the right people for you. Take the time to look through the reviews that owners have left about the renter and look out for any negatives. These indicate if a person is responsible or not and if they may create some problems.
Some people break things and don’t pay for them while others may be loud and bother the neighbors.