An increasing number of investors are purchasing property that they then turn around and rent via Airbnb. Find an Arizona Airbnb Loan in order to get into this lucrative investment strategy.
By 2017, the leisure industry had expanded with 25% of leisure travelers booking at least one stay at an Airbnb property. Since 2016, stays at Airbnb properties increased 19% according to a research report from Morgan Stanley. Airbnb has over 4 million listings in 191 countries. Leisure travelers prefer to book a stay at an Airbnb property than a motel.
Entrepreneurs seeking additional income will seek to rent out a house, apartment, or some other space by listing their property on Airbnb. Estimates are that some 650,000 people list to rent their property out on Airbnb and revenues for Airbnb have topped $2.6 billion with a typical host realizing, on average, $924 a month. Some hosts are realizing enough revenue that they are able to quit their jobs. Any Airbnb host must realize that there are costs associated with hosting, some of these are the costs associated with acquiring the property you want to rent, increased taxes, paying a commission, local regulations, property insurance, and the obvious cleaning and keeping your property well stocked.
You will need capital to get started and involved with Airbnb property. The costs associated to become an Airbnb host can be varied. One of the most obvious is the property itself. If you rent your property on Airbnb for more than 14 days per year, then you will need to report the money earned. Your best bet is to talk to a tax professional before you begin to rent a property on Airbnb to realize how this will affect your personal tax situation.
Considerations Before Becoming an Airbnb Host
Take into account these considerations before becoming an Airbnb host:
· Calculate the three percent charge Airbnb places on any payment and how this fee is going to affect your profit margin.
· Calculate the supplies needed for your listing, such as sheets, towels, and other household items. Do not forget that you may have to purchase additional electronics and furniture in order to make your house “Airbnb worthy.”
· You will need to be the housekeeper for the property or hire a service to clean. This is an added expense that your will need to calculate into your profit margin.
· Lastly, you will need to research insurance. For American hosts, Airbnb provides insurance such as basic liability and property protection. This may not be sufficient to protect your property. Call your insurance agent to discuss the proper coverage for this type of situation.
You are now spending thousands of dollars before you ever book a guest. It’s best to look for Arizona Airbnb Loans with a private money lender before you spend more money than you originally anticipated.
There also are challenges for an Airbnb rental by local laws or city ordinances. Banks will not lend on properties listed on Airbnb since localities restrict the listing of your property. Banks are reluctant to lend to a business that is “illegal” due to local ordinances that prohibit the listing. Although obtaining Arizona Airbnb Loans can be challenging, you may be able to find great options to get your foot in the door. At Setabay, we work with hundreds of private investors, some of which specialize in Arizona Airbnb Loans. We may very well be able to find the right loan for your first Airbnb property.
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About the Author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 43 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.