How to Buy Your First Airbnb-Style Investment Property

Airbnb-style investment properties have become exceedingly popular with real estate investors in recent years because of their flexibility, control, and income potential. In March of 2019, Airbnb hit the six million listings milestone. Traveler demand for Airbnb-style accommodations in popular destinations continues to push that number higher.

Isn’t it time for you to claim your piece of the Airbnb pie? In this post, we’ll show you how to buy your first Airbnb-style investment property. And how to make sure you’re getting the best deal possible.    

Step 1. Search Smart

Smart real estate investors know that one of the best ways to ensure the success of a real estate investment is to purchase the property below market value. Distressed properties (properties burdened by issues like involuntary liens, preforeclosure, bankruptcy, or divorce) are your ticket to getting a discount on your Airbnb-style investment property. But these properties aren’t always easy to find.

PropStream is the next-level real estate software that enables you to find distressed properties to purchase below market. Set up notifications so you’ll be among the first to learn of new properties that meet your specific investment criteria.

Step 2. Project Your ROI

Before you make an offer on your first Airbnb-style investment property, you need to analyze the financials to project Return on Investment (ROI). Having the proper tools to analyze your potential deals, estimate your rehab costs, and project your ROI sets you up for success.

PropStream’s Step-by-Step Analysis Wizard helps you calculate your mortgage expense, rental income, and rehab costs, as well as ongoing insurance, taxes, and maintenance, so you can be confident in your ROI projection. And if your distressed property will need a fair bit of rehab, use the PropStream Rehab Estimator to get information on local labor and material costs for the most accurate ROI projection possible.

Step 3. Negotiate the Best Possible Terms

The success of your first Airbnb-style investment property heavily depends on your ability to negotiate a good deal. Before you contact the owner of your target investment property, build a case for your below-market offer using comparable properties. With PropStream’s easy-to-use comp tools, you can show the property owner how much other distressed properties sold for to validate the amount of your offer. Or show the owner the consequences of ignoring your offer by running comps that have been on the market for months and seen multiple drops in the listing price.

And don’t forget to negotiate your rehab terms if you need to put some work into the property. Armed with the data from your rehab research, you may be able to talk a contractor down on the price when you can back up your negotiation with evidence of lower costs from competing vendors.

Airbnb-style investment properties are more popular than ever. And smart real estate investors are taking full advantage of the comparatively high nightly rates Airbnb rentals command. If you're ready to buy your first Airbnb-style investment property, Propstream is here to help you through every step of the process.