Most people know someone who either owns an Airbnb or has stayed in one while traveling for work or vacation. While they’re a popular alternative to hotels, most investors get caught up in other people’s success stories without realizing it may not be the same for them. In the video below, we’ll be reviewing the flaws of Airbnb and why some people are quitting Airbnb altogether this year. Read along to learn why this investment strategy isn’t always the best choice for investors.
Contents of This Article:
- Is Airbnb Still a Good Investment Choice?
- Why Are People Quitting Airbnb?
- How to Remain Profitable With an Airbnb Rental
- Hire Top-Notch Management for Your Airbnb
Is Airbnb Still a Good Investment Choice?
Investing in Airbnb rentals has been a popular strategy, gaining even more recognition over the past few years. With so many people working from home or traveling for work, they’ve become excellent resources for those who want a more at-home experience compared to a hotel. However, while increased demand is great for some Airbnb hosts, it creates problems for others.
Additionally, some investors have been forced out of the industry due to a lack of quality control and increased liability for owners. Unless you hire Washington DC property managers, Airbnb owners are responsible for furnishing, cleaning, managing, and marketing their properties, which adds up to a lot of work. Not to mention, you’re responsible for all the bills, regardless of whether you’re making money back by hosting tenants.
Ultimately, while Airbnb rentals can still be profitable for well-established owners, there are several aspects that some investors overlook. Next, we will discuss some of the main reasons people are quitting Airbnb and how you can avoid these issues and remain profitable.
Why Are People Quitting Airbnb?
Investing in Airbnb properties sounds like an excellent strategy for those who want to make rental income as a side job. However, one issue is that the workload can be much more daunting than it originally seems. Read along as we go over why so many are quitting Airbnb this year.
- It’s Not As Easy As It Looks
- Lack of Quality Control
- Not Budgeting Properly
- Investing in the Wrong Areas
- Less Certainty of Income
It’s Not As Easy As It Looks
Many people share a common misconception that investing in Airbnb properties is an easy way to make a side income. This may come from experienced investors with highly profitable properties or those who don’t personally manage them. However, buying and managing a vacation rental is a lot of work–especially if you do it alone.
If you think that you’ll be able to start off making money right away, you may want to rethink your decision. While some people who do the research and budget properly can profit fairly quickly, others don’t profit from their Airbnb for several months. The truth is it takes a lot of time and dedication to make a desirable, profitable rental property.
Lack of Quality Control
You can find Airbnb almost anywhere, but there is no standard of quality control. This can create several issues, including a lack of cleanliness and comfort for guests.
After all, when guests don’t comply with Airbnb guidelines, the host has more to lose than the guest does. So, it’s important to remember that when you rent your property to Airbnb guests, you essentially allow strangers to stay there, which can sometimes be problematic.
Another major risk of hosting Airbnb guests is increased liability for owners. If a guest gets injured or damages your property somehow, it’s generally your responsibility to handle these issues. To mitigate any issues like these, it’s crucial to have the proper Airbnb liability insurance coverage. Unfortunately, some guests purposely set out to destroy an owner’s property or leave them bad reviews for no reason, which can force some people out of the Airbnb industry.
Not Budgeting Properly
Way too many investors overlook their budget while furnishing their Airbnb properties. Many Airbnb owners are so excited to furnish their properties that they forget to stay within the budget they’ve set. In turn, it causes them to miscalculate their “break-even” point. The break-even point is the point where your total costs equal your total revenue. Unfortunately, it takes some investors longer to get to this point, so they end up quitting Airbnb after a series of losses.
Investing in the Wrong Areas
Some investors fail to properly research how much they can make in a certain city or area. After all, not all areas are equally as profitable. So, it’s crucial to look at where you will invest and figure out how much you can make in that area. Several resources help you calculate how much you can make, and it’s crucial to do this research before investing in a new property.
Unfortunately, some investors end up investing in an area that limits the amount you can make from Airbnb properties. Additionally, some investors get caught up in popular areas and end up in an oversaturated market, leaving them with fewer guests than they anticipated. This can drive some people to quit Airbnb, especially if they didn’t research properly beforehand.
Less Certainty of Income
There’s no guarantee of income with any type of rental property. However, Airbnb rentals are even harder to predict than long-term rental properties. One of the benefits of being a landlord is knowing how much you have coming in each month, assuming the tenant pays.
On the other hand, with Airbnb, your income is sporadic and less predictable, which is another reason many people quit. After all, it’s hard to budget and plan for expenses when you’re unsure of what your income will be for a certain month.
How to Remain Profitable With an Airbnb Rental
Now, you may be wondering–is Airbnb still profitable? Yes, they can be, with the right research and resources. For instance, an excellent strategy to estimate your income is using Airdna.co.
Using this site, you can look up different zip codes and calculate the average daily and occupancy rates. To calculate how much you can make, take the average daily rate, multiply it by the occupancy rate, and then multiply it by how many days there are in a month. Here’s an example.
Average Daily Rate ($150) x Occupancy Rate (52%) x Days in a Month (30) = $2,340
Using this formula, you can look at different zip codes and find an area that aligns with your budget and investment goals.
Hire Top-Notch Management for Your Properties
Another aspect of owning Airbnb rentals that several owners overlook is maintenance and management. It takes a lot of time and effort to clean in-between each guest, tend to regular maintenance issues, and repair anything that needs fixing. If you own properties that you don’t live near, it’s even more challenging.
learn how bmg can help your business today!
That’s why many investors enlist the help of professional property management for their rentals. A comprehensive management company, like Bay Property Management Group, can help ensure your properties are well-maintained and managed properly. So, if you’re looking for rental management near Baltimore, Philadelphia, Northern Virginia, or Washington, DC, contact BMG today!
