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If you are looking to make some extra money or even a full-time income by investing in real estate then Airbnb should be on your radar. It is a very flexible investment as it can be used so you can rent out your house to be able to travel and make money, or you can buy a property specifically for short-term rentals.
There are a lot of ways to make money with Airbnb but there are also a lot of pitfalls to watch out for. There are some common mistakes that owners make that keep them from making money. In this article, we will go over several of the common mistakes to try to avoid before you think about Airbnb.
1 – Not updating the property
Although not many guests will be expecting luxury accommodations, they will be expecting a property that is well-maintained and comfortable. You should make sure that your property is not outdated and that it has all the modern conveniences that people are looking for.
For instance, have all the appliances upgraded before you rent it out so that it looks and feels like a new property. This will also do yourself a favor since there is less risk of a call in the middle of the night because the washing machine is not working.
You should have the carpets cleaned, or even add new ones including custom carpet runners for stairs to give the place a warm and updated look. A fresh coat of paint that matches the color of the carpets will seal the deal.
Make sure to retain the charm of the property when doing the renovations and upgrades so it looks like it is worth the money that people are willing to pay.
2 – Picking the wrong location
By now everybody understands the importance of the location of a property for investing. Buying in the wrong location is the biggest mistake investors make.
However, the criteria that make Airbnb a good investment are much different than other types of real estate.
For instance, you will need to make sure that you are buying in an area where there are going to be tourists. If you are in a residential area without much tourist infrastructure nearby then you won’t have many guests. If there are not many tourists then make sure to be where there will be some business travelers.
3 – Buying the wrong property type
The type of property you are offering should match what people are looking for in that area. Another common mistake is to buy a property that is not suited for the market.
For instance, if the area is popular with backpackers then buying a simple studio or one-bedroom apartment is the best bet since they are on a budget and looking for basic accommodations. If you buy a big house then single travelers will not rent it out. Likewise, if the area is attractive for families and you have a small studio for rent.