Top 5 Things Every Savvy Property Investor Should Consider

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Top 5 Things Every Savvy Property Investor Should Consider


You have probably heard prominent somebodies speak favourably about the concept of Airbnb over the last couple of years or so, and this has gotten you thinking a lot on whether you should traverse down this relatively new path, on which so many have reaped tremendous gains. Not to spoil your party, but before you do, keep in mind that the rise and demise of BITCOIN too had people sharing experiences of two very different extremes which were of the same coin. Nevertheless, we have strung together some facts that would hopefully help you make a more informed decision.

1) PICK A RENTAL STRATEGY THAT WORKS FOR YOU

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Firstly, it would be wise for you to explore the local housing market and choose a rental strategy that best suits your property’s vicinity, by simply researching the demand for rentals in your designated area. An area with a higher concentration of tourist would be more likely to favour short-term Airbnb rentals, therefore it is possible that the demand for Airbnb rentals would be higher than the ones for traditional rentals. In contrast, if your area is one that is amidst a town which offers stable job opportunities or has universities or colleges nearby, it might be more suited for traditional rental as potential tenants would be looking to secure more long-term rental contracts. Rule of thumb; if the demand for rental is low, you would want to go with something more permanent like traditional rental (long-term) to safeguard and lock in your monthly rental returns, whereas if the demand is high, you probably could be earning more out of an Airbnb (short-term) arrangement.

2) IDENTIFY LOCAL LAWS & REGULATIONS.

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Traditional rental usually adheres to a strict set of rules that are governed by laws which protects both property owners and tenants impartially. Airbnb rentals usually don’t stick to such rigid sets of rules. This is also because laws and regulations for Airbnb rental arrangements vary from place to place as different cities will have different regulations for these sorts of renting arrangements. Some locations may have very clear cut rules when it comes to Airbnb arrangements while others may be a little laxer. Always do your research and identify which rules apply at the location of your choice and if they suit your intended strategy to avoid unintentionally violating any local rental policies. If you own a unit in a high-rise, it would be wise to check with the management committee of the building to ensure an Airbnb type of arrangement does not infringe any newly agreed upon regulation.

3) CONSIDER THE MAINTENANCE WHICH WILL BE REQUIRED.

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Yes, Airbnb yields higher rental income per day compared to traditional renting, nevertheless this does not necessarily mean you pick it as an option base on this fact alone. Remember though the rental yields are more, Airbnb properties will require more maintenance. Hosts of Airbnb units will need to clean the place and make sure it is well prepared for the next tenant. This means fresh towels, bedsheets, necessary supplies such as water and light snacks plus essentials such as toiletries. Not to mention the decoration and general presentation of the property should meet the demands of the most seasoned traveller as well as justify the cost per night. Considering all these little details will take place very frequently each month, be prepared not only to make the time if you opt for an Airbnb arrangement, but also to roll up your sleeves and go the extra mile if you want to ensure you have a steady flow of happy campers.

4) FIND OUT A LITTLE MORE ABOUT POTENTIAL TENANTS.

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This is an important consideration when it comes to make an ideal choice; tenants. Airbnb probably gives you a better insight as to the type of person that is going to occupy your property, as background checks on tenants can be easily carried out. This also inadvertently decreases the risk of you getting bad tenants. Keep in mind though that this translates to much more frequent interactions with potential renters online and the added hassle of screening through varies different characters as part of your pre-screening routine each time. With traditional rental, this part is taken care of by your real estate agent, so you would probably want to give an Airbnb type arrangement serious consideration before committing, especially if time is of the essence to you.

5) RECOGNISE THE COMPETITION YOU WILL BE UP AGAINST

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Finally, when contemplating between Airbnb and traditional renting, it is vital that you keep in mind the potential competition each choice entails. The demands of tenants from both these avenues can be quite different from each other. Airbnb tenants basically need a comfortable place to stay, while the traditional renting tenants might have a wider scope of things on their checklist such as accessibility to their workplace, healthcare, day care, schools, groceries, public transport etc. Keep in mind that competition for traditional renting might only come from similar properties that are up for rent, while for Airbnb, it would be the same plus also include hostels, dormitories, hotels, chalets, camping sites and the alike- all of which offer a choice for a different kind of experience compared to yours.

We hope that some of this pointers shared above would help you when you are deciding on which renting option works best for you. Don’t forget to join the PropAdvisor community to find honest and unbiased reviews of tenants from other landlords/users & property managers.

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