134 – AirBNB Math Matters

AirBNB Math Matters

Too many people skip doing the math before they jump on the short term AirBNB rental properties and the numbers are critical. If you don’t do the math before you buy you could end up with a property that only costs you money. Do not base your buying decision on what you can supposedly rent it out at with AirBNB.

If you’re going to buy an AirBNB property, don’t use the AirBNB rent to make your calculations. Instead, think of it as a regular rental property, because there are a lot of factors that could cause you problems if you rely on AirBNB to make that property profitable. You especially have to know the area, not all cities make sense for the short term rental market.

The trouble is AirBNB’s are hot right now and people have stars in their eyes about how much money they are going to make. Never listen to the dreams, do the math and find out for yourself what the realistic numbers are going to be. Each rental property is a business unto itself, so make sure you run it like a business. If it can’t pay for itself, don’t buy it.

You also have to consider that no property is rented 100% of the time. The tenant will always move on eventually, and with short term rentals you have even more turnover and less guarantee that it will be rented at any given time. Combined with possible noise complaints, property damage, and cleanup issues, short term rentals are more involved than most people think. Just like a regular rental property, you should screen your tenants and make sure that you always follow the laws in your area.

Sometimes you also have to manage your property manager. Just like your tenants, you have to do your homework on potential managers to make sure that you find someone that will take care of your property right and not take advantage of you.

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