Posted on Leave a comment

Why Investing in Airbnb Properties Is Worth It?

Investing in Airbnb Properties

Airbnb is an online platform for individuals interested in renting out their homes. This platform connects them with tourists and travellers who are searching for accommodation in the homeowners’ area.

Well, Airbnb real estate investing is undoubtedly a great way for investors to earn money from their investment property. Basically, it’s a strategy in which a real estate investor purchases a rental property, listing either the individual rooms on Airbnb or the entire house. Usually, a real estate investor does not live in the Airbnb investment property.

Since the platform was launched more than a decade ago, it has attained tremendous growth. If you’re interested in becoming an Airbnb host, you may be wondering whether it’ll be a profitable real estate investment. Well, generally, Airbnb real estate investment is perceived as one of the best real estate investments to make now, thanks to the plethora of opportunities it presents for investors.

However, the Airbnb rental strategy does not come without its pitfalls. How successful you’ll be in this business will depend on a number of factors. Before taking the dive, consider the benefits and drawbacks of Airbnb. This blog will help you get a better idea of whether Airbnb real estate investing will be a good fit for you. Here’s a list of the benefits that Airbnb offers:

Free Listings

You don’t need to pay expensive sign-up fees to list your rental property on Airbnb. What you need to do is create your profile with good paragraphs and a decent written description. This allows prospective guests to understand what you’re offering.

High Potential Returns

If your Airbnb property is located in a favorite tourist destination, is furnished well, properly listed, and offers top-notch customer service, you can net a high return on investment by attracting a steady stream of guests. It can even bring in more revenue than it would if you were the landlord of a long term rental.

You Can Set Your Own Price

As a host, Airbnb real estate investing gives you the flexibility to decide how to charge guests: monthly, weekly, or even per night. As an Airbnb real estate host or investor, you can also increase the rental price since it is fixed just for the term of the leases. Just make sure you add the change in your listing.

Host Protection

There are several risks associated with Airbnb hosting. However, in certain countries, the Airbnb Host Guarantee program protects hosts for up to $1,000 if a guest damages the rental property. Keep in mind that this doesn’t replace renters or homeowners insurance.

Cultural Experiences

Besides the money, Airbnb real estate investing often brings about cultural exchanges. This is because many travelers from across the planet and from every walk of life now use the platform. If  learning about new cultures is something that fascinates you, you can get a fair dose of it from the various travelers.

More Flexibility

Owning an Airbnb investment also offers flexibility. For example, if your property isn’t available on a certain date, you can choose to block off that particular date. This way, it won’t allow guests to book for the dates your property won’t be available. If you plan on being out of town or need to do a major repair, you can block this date off. However, no such option is granted to a typical landlord.

Control the Upkeep of Your Rental Property

After a landlord signs a lease with long-term tenants, it practically belongs to the tenants even though it’s the landlord that has to maintain the property. Usually, the landlord loses a fair bit of control over their property; sometimes, this leads to substantial damages to the home, repairing of which may be costly. However, with short-term rentals, you get to check the property regularly. You’ll be doing maintenance and cleaning it more often.

The Bottom Line Airbnb real estate investing can be quite lucrative. So, is investing in Airbnb an option you should be taking seriously? Well, that depends on you and your particular situation. Before deciding on becoming an Airbnb host, it’s a good idea to go through all the benefits we’ve discussed above. If you choose to invest in Airbnb properties, you can turn to the Republic Investment Group to find and analyze a profitable Airbnb investment property in the US.

Posted on Leave a comment

Single-Family or Multi-family Rental Properties: Which Is Superior?

Rental Properties

For those unable to withstand the stock market’s volatility, real estate can be an excellent alternative. It’s also a better investment for investors who’re looking to take on an active role in increasing their capital, instead of passively putting their money into a fund for someone else to manage. The fact that multiple strategies can be successfully used is one of the greatest advantages about investing in real estate.

For instance, real estate investing moguls – Zhang Xin and Donald Bren both built their billion-dollar fortunes by developing several residential and commercial properties. In contrast, Sam Zell, the founder of Equity Residential, built his wealth by slowly acquiring an income-producing portfolio of rental properties.

Other real estate investors have also earned a lot from purchasing properties or house flipping for cents on the dollar (buying houses in disrepair and renovating them to sell them at greater cost). One such form of investment is in multi-family properties; let’s see why it’s one of many investors’ best options.

A Lot Easier to Finance, But More Expensive

In many cases, purchasing an apartment building as an investment is substantially more expensive than the cost to buy a single-family home. While a single unit rental can cost an investor a few thousand dollars, a multi-family building can go up to millions.

Initially, it may seem as though securing a one-family property loan is simpler than trying to secure funds for a million-dollar complex. However, the fact is, a multi-family property has more chances of being approved by a bank for a loan than a typical home. The reason is that multi-family properties consistently generate strong cash flows on a monthly basis. This remains the case even if a property has many vacancies or some tenants who don’t pay rent on time.

If a tenant moves out of a one-family home, that whole property become vacant. In contrast, a property with ten units and a single vacancy is considered 10% vacant. Consequently, the chance of foreclosing on an apartment building isn’t as high as a one-family rental. All of this translates to a less risky investment for a lending institution; it can also result in a better interest rate for the landlord.

Growing a Portfolio Doesn’t Take Much Time

For property investors who intend to build a relatively big rental units portfolio, multi-family real estate is a great option. Acquiring an apartment building with 20 units is less time consuming and more efficient than buying 20 different one-family homes. With the latter option, an individual would need to work with 20 different sellers and perform inspections on 20 houses, with each of them a potentially at different locations. This route would also need an investor to open 20 separate loans for each property in certain cases. By simply buying one property with 20 units, this headache can simply be avoided.

You’re in a Situation Where Property Management Makes Financial Sense

Certain real estate investors don’t enjoy the hassles of property management and appoint a property management firm to take hold of their rentals’ day-to-day operations. Typically, a property manageris is paid a portion of the monthly income that a property produces. Their responsibilities may consist of screening and finding tenants, maintaining the property, handling evictions, and gathering rent payments.

Many investors who own one or two single-family homes don’t have the luxury of contracting a manager from outside since it’s not a financially sound decision considering their small portfolio. The amount of money that multi-family properties generate every month gives their owners room to leverage property management services without substantially cutting into their margins.

The Bottom Line

Like stocks, investing in real estate enables an individual to be successful using a variety of different strategies. Owning a collection of rental properties is one of the most popular ways to invest in real estate. One-family rentals are properties consisting of just one residential rental unit, while apartment complexes that have more than one rental unit are referred to as multi-family properties. There are a plethora of advantages to owning multi-family real estate. These comprise the ability to grow one’s rental property portfolio quickly, and access to better and easier financing opportunities. So go ahead and invest in multi-family properties. It’s worth it.