When you’re considering renting out a property on Airbnb, there are a lot of things to think about.
What’s the best type of property for an Airbnb rental? Is it better to rent a house or an apartment? Should you stick to downtown areas, or try suburban neighborhoods?
In general, the best properties for Airbnb are those that are centrally located, close to public transportation, and have a variety of home features that guests will find appealing. Depending on your goals and your budget, larger properties also tend to be more popular and generate higher profits.
In this article, we’ll outline everything you need to consider when choosing a property for Airbnb. By following our tips, you’ll be able to find the best type of property for your needs and maximize your profits.
What are all the different types of properties available?
The first step in choosing the best type of property for Airbnb is understanding all of the different types of properties that are available.
There are single-family homes, apartments, condos, townhomes, and more. Each type of property has its own set of pros and cons that you’ll need to consider.
- Apartments tend to be more affordable than single-family homes but they also come with a few more restrictions.
- Single-family homes are a popular choice for Airbnb but they can be more expensive and harder to find in desirable locations.
- Townhomes and condos are a happy medium between apartments and single-family homes, but they often have HOAs which presents restrictions for renting out on Airbnb.
- Tiny homes, Airstreams, and unique properties are a great choice for Airbnb and can be very profitable businesses but they may be more difficult to find and maintain.
Be sure to do your research and understand the different types of properties before making a decision. Once you know what types of properties are available, you can start narrowing down your search.
What is the best type of property for Airbnb?
Here are the main factors to consider when looking for a property to rent on Airbnb.
Location
The best Airbnb properties are going to be centrally located and close to popular tourist attractions.
This makes it easy for guests to get around and see all the sights that your city has to offer. It will also ensure that you have consistent demand for your property.
Something to keep in mind is the seasonality of your location. If your property is located in a popular ski town that will generate a lot of traffic in the winter but not so much in the summer, be sure to factor that into your decision.
For example, my Airbnb property is situated between Denver and the Rocky Mountains. This makes it an excellent location for guests who are looking to go skiing, attend a scenic wedding nearby, explore the city, or attend a graduation from one of the many nearby universities.
Luckily, demand is steady throughout the year and I feel confident that my property will continue to generate income no matter what season it is.
The property is not easily accessible with public transportation but is close to a major highway that makes it easy to get around.
In summary, the best type of property for Airbnb is going to be centrally located, easily accessible with public transportation or major highways, and in a desirable tourist location.
Size of the Property
The size of your property is going to be one of the main factors in determining how much income you can generate from Airbnb.
Larger properties can accommodate more guests and often come with a higher price tag. This means that you’ll be able to generate more income but you’ll also have higher expenses.
You’ll need to decide what size property is best for you based on your goals and budget.
For example, a small studio apartment is going to be more affordable than a large single-family home but it will also generate less income.
On the other hand, a large single-family home is going to be more expensive but can accommodate more guests which means more income.
It’s important to find a balance that works for you.
I recommend using AirDNA to research your area and see how much competitors are making with their properties. You’ll be able to see what type of property they have, how often their home is being rented out, and how much money they’re making. This is how I decided on buying a four bedroom, two bathroom house for my first Airbnb. I noticed this type of property provided the highest return for competitors in my area.
Local Regulations
Before you start looking for a property to rent on Airbnb, it’s important to check the local regulations in your area.
Some cities have strict laws against short-term rentals while others have very lenient regulations.
For example, the city of Denver requires all Airbnb hosts to register their property with the city and obtain a short-term rental license.
The city also requires that the property be the host’s primary residence and that they live on-site.
City’s may also have a few other regulations that you’ll need to follow, such as having a maximum occupancy of two people per bedroom and having a minimum liability insurance.
Be sure to check the regulations in your area before you start looking for a property to rent on Airbnb.
Home Features
The best type of property for Airbnb is going to have certain features that will make it attractive to guests.
Some of the features that you’ll want to look for are a private entrance, off-street parking, a private bathroom, a fully-equipped kitchen, and a comfortable living space.
You’ll also want to make sure that the property is clean, well-maintained, and in a safe neighborhood.
These are all features that guests are looking for when they’re searching for a place to stay on Airbnb.
If your property doesn’t have some of these features, you may want to consider making some improvements before you start renting it out.
Bottom Line
When you’re looking for a property to rent on Airbnb, there are a few things that you’ll want to keep in mind. You’ll want to find a property that is centrally located, easily accessible, and in a desirable tourist location. The size of the property is also going to be a factor in determining how much income you can generate. And finally, you’ll want to make sure that the property meets all of the local regulations and has the necessary home features that guests are looking for.
Keep these things in mind and you’ll be able to find the best type of property for Airbnb. Ultimately, every area is different and the type of property that will be best for renting out on Airbnb will depend on your location. I recommend using AirDNA or Mashvisor to narrow in on what properties are doing best in your area based on the competition’s numbers.
