Real estate expert Samantha DeBianchi, founder of DeBianchi Real Estate in South Florida and the first woman to star on Bravo’s ‘Million Dollar Listing Miami,’ says yes, there is money to be made, but agents have to know what they’re are doing.
“We’ve had many people come into our firm looking to buy properties for no other reason than to list them on Airbnb,” she says. “But there are things that potential Airbnb investors need to know.”
Here’s what DeBianchi says your investor clients need to know:
The rules vary – Unfortunately, it’s not as easy as buying a property, listing it on Airbnb and welcoming guests. You have to check city regulations. Before your clients sink any money into a purchase, ask yourself these questions:
- How long can the property be rented out?
- Is the owner required to occupy the home while an Airbnb guest is in the home?
- How long will it be taxed?
- If there is a homeowner’s association, what are its rules?
- Does your client’s mortgage company allow the person to sublet the property?
- What’s the impact on homeowner’s insurance and property taxes?
An unknown future – Buying a property as an Airbnb investment might seem full of potential, but how, or will it be regulated in the future? It’s all very new and very much up in the air at this point. Your investor clients have to be comfortable with the uncertainty factor knowing that what may be seen as a thriving income stream right now might not be so reliable down the road.
Other costs – Profit is determined by what your client rents the property for minus what they spend on the upkeep. The more properties they own, the greater their expenses. They’ll need to factor in costs like cleaning services, utility bills, landscaping, pool service, repairs, etc. They’ll need to know if they can handle a slow period of vacancies. Also, what happens if home values decline, thereby driving down the asking price on their rental? Can they afford that?
Standout from the competition – With so many properties listed on Airbnb, how will your client differentiate their listing? Remember, much of the success of an Airbnb is based on reviews from people who have stayed in the respective home. Clients will need to spend extra money to really wow them over. This includes items like quality bedding and bath accessories; professional photos and staging the property; welcome gift baskets; serving as a good concierge and providing a list of local vendors, attractions and other hot spots. Most agents will have extensive experience in this area and should be a great resource for investor clients in this regard.
This is serious business – Playing the Airbnb game isn’t for the faint of heart. This isn’t a hobby or something a person should take lightly. Make sure your clients know the risks before they jump in. They have to be okay knowing it might not work out. When in doubt, start slow. Maybe have them rent a room out in their current home and see how it goes. They can get a feel for it before jumping into it in a big way.