Tag: AirBnB

Categories
Shortterm Rentals

How to Find The Best Neighborhoods for Airbnb

To earn the biggest profits from your STR, you need to find the right neighborhood to invest in. Here, we look at some of the things to consider.
An STR in the woods
Photo by Karsten Winegeart

Investing in a short-term rental (STR) is a great way to make some additional income. In fact, according to 2021 figures, the average Airbnb host in North America can make $41,026 annually from a single rental.

But you need to be smart and focus on a lot of factors to earn that impressive amount. 

For example, just picking a neighborhood can make or break your investment. While the right neighborhood with all the right conditions will give you high occupancy and rental rates, the wrong neighborhood will only give you high turnover rates—or worse, complete vacancy.

So, what are the right conditions that make a neighborhood perfect for STR investments? 

Let’s discuss the conditions you need to consider when picking a neighborhood for your Airbnb.

What Makes a Good Neighborhood?

No one factor makes a good neighborhood. You have to consider several characteristics when choosing the area for your Airbnb. When you choose a neighborhood to invest in, look for: 

  • Airbnb occupancy rate
  • Airbnb rental income 
  • Airbnb rent averages
  • Cash-on-cash return

Each factor is as important as the next and they all have to come together seamlessly. For example, if you only take into account the Airbnb occupancy, you could see an 80% rate. But each tenant might be paying you a low amount—and that might not be worth the effort.

So, let’s define each factor and go through their details:

Airbnb Occupancy Rate

The occupancy rate measures the dates a property was booked versus the total number of days it is listed for rent. Factors like location, market saturation, and seasonality can affect a neighborhood’s occupancy rate. 

Now, the average occupancy rate in North America is about 44%, but you’ll want to find areas that give an even higher number. Instead, focus on locations that have the highest occupancy rates such as:

  • Seaside, CA: 71.3% 
  • Little Rock, AR: 75.0%
  • Phoenix, AZ: 64.1%
  • Los Angeles, CA: 55.6% 
  • Columbus, OH: 60.6%

A quick search on Google will give you these numbers. If you find another neighborhood with a good Airbnb occupancy rate, you can consider investing in property there. 

Airbnb Rental Income

The Airbnb rental income will determine how much income your property will generate over time. For you to determine the potential rental income you can earn in a neighborhood, you need to conduct a market analysis. Using market analysis, you can learn: 

  • The real estate appreciation rates of the neighborhood
  • The current and upcoming trends of the real estate market in an area
  • If the neighborhood you’re scouting is suitable for an STR
  • If long-term rentals are more popular in a particular area instead of an STR
  • The overall demand for rentals in the area

Take, for example, Mashvisor’s heatmap. With this tool, you can see the average occupancy rate in Detroit. You can also get a glimpse into the estimated rental income of an Airbnb.  After you perform a market analysis, you should have a good idea of what your Airbnb rental income should look like in that particular neighborhood. 

Airbnb Rent Averages

This is the simplest metric you need to find out. You basically need to look at the average rent STRs are going for in a neighborhood. If you skip this, you might invest in an expensive property that’ll take too long to generate a good return on investment.

You can use Mashvisor to get a good idea of how much people are charging for rent on their Airbnbs. In general, you want to look-out for properties with similar specifications to the property you’re looking to invest in. Watch for things like: 

  • The number of rooms
  • The number of beds and baths 
  • The kinds of amenities available
  • The location (e.g., if it’s near tourist attractions)

Once you have a general picture of how much people are charging for stays in their Airbnbs, you get an idea of how much you can charge. 

This will also help you estimate the maximum amount you should spend acquiring the property, as you’ll want to charge at least 1% of your total property price to recoup costs fast enough. For example, if a property costs $212,000, you’ll want to charge at least $2,120 for the monthly rent.

Cash-on-Cash Return 

Finding out the cash-on-cash returns for similar Airbnbs in a particular neighborhood will give you an idea of whether investing in a neighborhood is worth it. Again, Mashvisor gives you the cash-on-cash returns of Airbnbs in a neighborhood.

To calculate your cash-on-cash return, you just need to follow a simple formula:

Cash-on-cash return (CoCR) = (annual rental income – operating expenses)/total cash investment 

Let’s look at the potential CoCR of the listing we mentioned earlier, with an annual rental income of $25,440 ($2120 x 12) as an example. With a total cash investment of $200,000 and a safe estimate of operating expenses being 1/3rd of the annual rental income, it’ll look like this: 

CoCR = (25,440 – 8395.2)/200000 

CoCR = (17044.8)/200000

CoCR = 0.0852

For this particular example, the cash-on-cash return is 8.52% per year. This is within the benchmark for good CoCR, which is between 8-12%. If you find an area with a CoCR that measures within that range, it’s a good opportunity for your STR.

Pick the Right Neighborhood For Your Investment 

Airbnbs can be a great investment opportunity. However, much like any investment, you need to invest wisely. Choosing the wrong neighborhood will put you at too much financial risk, and you might not see numbers anywhere close to the $41,026 average.

Do your due diligence, analyze your opportunities well, and maybe even consult with experts in the industry, and you can be confident in earning that $41,026—maybe even higher.

Do you think there are other factors to consider when choosing a location for an Airbnb? Let us know your insight in the comments below!

Categories
Shortterm Rentals

Feeling Invisible? Here’s How to Manage Multiple Airbnb Listings for Increased Visibility

Airbnb owner on her cell phone

As COVID-19 slowly loosens its grip on our society, Airbnb’s popularity is reemerging from the ashes. 

While the company saw a 72% drop in its services at the height of the pandemic, Airbnb is now seeing an increase in bookings once more, thanks to significant restructuring.

With this post-pandemic growth, short-term rental landlords are now looking at ways to optimize their vacation rental business to take advantage of the boom. And, more importantly, stand out from the competition. 

One of these techniques is using multiple Airbnb accounts for your various properties, as we’ll see in this article. Of course, there are a few things to keep in mind, but the strategy proves to be a great way to show up more in Airbnb’s search results, increase your property’s visibility, attract more guests, and secure more bookings.

Let’s take a closer look.

Can I Have Multiple Airbnb Accounts?

You may be thinking, “Is it even legal to list the same property on multiple Airbnb accounts?” After all, you don’t want to go against any of Airbnb’s rules and regulations and risk getting banned altogether. The company can track single IP addresses or cross-reference your contact information to prevent its users from having  multiple accounts

Since they do regularly crackdown on users trying to flood Airbnb listings with the same property, we advise against it. However, if you have multiple properties, then you can have a different account for each different property. 

While it is a lot more work, it can be alright if you are operating an Airbnb business with different properties in vastly different areas. We’ll explain why you might do that in a bit. 

Of course, if you don’t want to deal with multiple accounts for your listings, consider posting your properties on multiple platforms instead of just Airbnb. There are plenty of other options today like VRBO, Booking.com, and TripAdvisor. You can even try social media sites like Facebook and Instagram to expand your reach.

Next up, let’s explore the situations where you can have multiple Airbnb accounts. 

When Should I Have Multiple Airbnb Accounts?

As we said, Airbnb doesn’t allow users to manage multiple accounts for the same listings. Although, managing multiple accounts for other situations can be beneficial for your short-term rental properties. Keep in mind, this advice is for people with multiple properties.

Now, here are a few reasons why you might need multiple Airbnb accounts, you can:

  • Have separate accounts for the properties that are in different locations. They’ll have unique addresses that will help potential guests see that your rentals are in a specific area, rather than thinking you’re spread across multiple locations (and might not have expertise in the local area). Plus, if you have Superhost status and get a bad review on a different property, it won’t affect your status on your other accounts.
  • Have separate accounts if you’re running a property management company. This way, your team can oversee several properties across the Airbnb platform. You can have one account for guest bookings and another for hosting services, although this might complicate things for your team.

As you can see, there are some cases where you have multiple Airbnb accounts. But, make sure that you are always following the rules on the platform, so you don’t get banned and miss out on additional income. 

How Can I Manage Multiple Airbnb Accounts?

Now, managing multiple Airbnb accounts isn’t easy. You’ll have to figure out a way to do the following across different accounts, logging in and out of each profile to:

  • Stay on top of your messages and communication with guests
  • Update your calendar to avoid double-bookings
  • Change your prices, post new information, or pick new photos for your listings

It’s a lot to do, but you can use smart tools to streamline daily property management operations and control the many aspects of your short-term rental business. 

Here are a few ways to do so:

  • Hire a property management company to handle properties on your behalf. Get in touch with us if your short-term rental properties are in the Metro Detroit area!
  • Use a vacation rental software solution like AirGMS to automate operations.
  • Bring in a co-host to double your workforce and combine Airbnb techniques.

Follow these tips to help you take care of multiple Airbnb accounts and lessen your chances of going against Airbnb’s rules. Additionally, having a property management company or co-host means you’ll be logging in to Airbnb via different IP addresses, which helps your case.

Level Up Your Airbnb Strategy

Take the time to consider whether you can manage different Airbnb accounts and if it makes sense for your portfolio of short-term rentals. The better you plan for it, the greater the chances of your properties ranking higher in Airbnb’s search results—being more visible to potential guests.

Once everything is running smoothly, you can sit back, relax, and watch your bookings increase alongside Airbnb’s post-pandemic revival. 

Got any thoughts on this listing strategy? Comment down below, and let’s get a conversation going.

Image courtesy of Andrea Piacquadio

Categories
Shortterm Rentals

Best Practices to Optimize Your Airbnb Listing

Wondering why your short-term rental on Airbnb isn’t performing as well as you hoped? 

You might think real estate knowledge is all you need to run a successful Airbnb, but there’s a lot more to it than that. The secret to having a highly-ranked listing and generating traffic on Airbnb is to use marketing skills, rather than real estate know-how.

But it’s not just about creating impressive listings with all the best features and amenities—you need to know how to rank well in search results. By doing so, more potential guests see your listing, and it’ll land you more bookings. And we all know more bookings mean higher profits.

So, to help you in this daunting task, we’ve listed the top ways to optimize your vacation rentals on Airbnb below. Use these ranking optimization techniques to get more people to choose your short-term rental units and see real results.

Tips for Higher Airbnb Ranking

In general, Airbnb recognizes good listings and rewards them with a higher search ranking. Airbnb does this because it wants the users (i.e. your guests) to have the best customer experience on their platform. After all, if they saw a dark basement suite with 2 stars review first, it wouldn’t reflect well on their own brand image.

As a host, your goal is to check off as much of these things as possible to have Airbnb rank your listing higher:

  • Ask for Positive Reviews: According to Airbnb host Nick Child’s data experiment, the average Guest Satisfaction score that shows up on the first page of search is a whopping 83.7%. This means that the more positive reviews you get, the more visible your rental will be.

So, provide your guests with the best experience and encourage them to leave a review after their stay. You want to have as many 5-star ratings as possible to appear on top.

  • Use Instant Book: Instant Book is a feature Airbnb has been pushing to make booking faster and easier for guests. More importantly, Airbnb confirmed that Instant Book is part of their search algorithm, and 50% of its bookings are via this channel.

Additionally, the Instant Book filter might be turned on by default for most guests. With the filter activated, guests will only see the listings that have Instant Book turned on. In other words, your rental might not show up if guests don’t turn off their Instant Book filter.

  • Respond Quickly: You’ll need to have a 90% or higher response rate to use Instant Book. This means that responding within 24 hours or less will boost your search ranking on the platform.
  • Hasten the Booking Process: Since Airbnb prioritizes ease and speed of booking, you should also gain their favor. The faster it is for a guest to finalize a booking with you, the more priority you’ll get on Airbnb’s search algorithm.

If you’re not sure how efficient your process is, evaluate how long it takes for you to finalize booking with a prospect. If they ask a lot of questions and can’t complete the booking within 24 hours, you need to improve your listing and hasten the process.

Improving your listing by adding all features and amenities offered (e.g., wifi, Netflix, cable, water heaters, etc.). That way you’ll reduce the time spent answering potential client clarifications.

  • Keep Booking Commitments: Because Airbnb prioritizes reliable hosts, you should only accept bookings you can commit to.b Every time you cancel or reject guests, Airbnb will see you as an unreliable host, decreasing your visibility on search pages.

One important thing is to ensure that your listing has all the details and considerations listed. That way, the only guests who’ll book with you are the one who agrees to your terms. It’ll be easier for you to accept them since expectations are all met.

  • Update Your Calendar Regularly: Airbnb checks if you’re updating your calendar regularly because they want guests to have an easy time booking a place. Don’t miss bookings when your unit is available, and remember to update it right away when a booking is confirmed.
  • Post Shareable Photos: We all know that good photos attract guests, but what you might not know is how important shareable images are—the types that guests can send to their friends before booking. The more they share your photos, the higher traffic you’ll get, which results in Airbnb prioritizing your listing on search.

Post photos that highlight the features of your listing, photos that aptly describe the place, and ultimately, have the highest chance of being added to the Wishlist feature or shared on social media.

Issues that Lower Your Airbnb Ranking

In contrast, Airbnb also sees “bad listings” and tries their best not to show these to their audience. Moreover, Airbnb also has some features that, when ignored, will lower your search visibility.

Make sure that you don’t do these things, or else you’re jeopardizing your ranking and preventing yourself from attracting guests:

  • Booking Cancellations & Rejections: As we said already, Airbnb wants to prioritize reliable hosts. This is the reason why they’re constantly pushing hosts to achieve the Superhost designation, and will deprioritize any hosts who have a high cancellation rate.

It’s difficult to stop guests from canceling. However, by updating your calendar and including all important details in your listing upfront, you can significantly reduce the chances of guests canceling a booking due to a myriad of reasons.

You also need to make sure you’re not rejecting guests because it will also make your rank go down. Every action you take on Airbnb factors is tracked and being factored into your performance.

  • Extra Charges: Extra service fees and additional security deposits will affect the amount of traffic your listing receives—especially if you’re charging more than other hosts. Once your booking rates drop, your search ranking will fall with it.
  • Too Strict: Flexibility is another factor to consider. While you might want to limit a guest’s stay to just a few days, like the weekend or weekdays, that excludes a lot of people. If you’re more flexible, you’ll appear in more searches. 

Summary

Use all our tips and tricks to optimize your short-term rental listing on Airbnb and help you generate more profits. When you’re a stellar host, your guests will thank you and appreciate it. While some see Airbnb as a means to make money, it’s also a way to provide others a lovely place to stay and create lasting memories when they visit.

Remember that it all boils down to providing a great experience for your guests. Impress them, and you’ll have plenty of people hoping to stay with you. 

Any other tips we’ve missed? Drop us a comment below on what’s worked for you with your Airbnb listing! 

Image courtesy of Andrea Davis

Categories
Shortterm Rentals

Overview of Metro Detroit’s Short Term Rental Market

Property investors are attracted to short-term rental properties because they offer an opportunity to make more than long-term leasing, but the short term rental industry has taken a huge hit during the coronavirus pandemic. In Michigan, STRs were banned from operating during the height of the lockdown, and even now that they’ve been allowed to reopen to guests, vacancy rates are still sky-high – hitting as much as 85% in some areas. 

Furthermore, the great “Airbnb debate” has been raging in many areas of Metro Detroit for years now, with local city councils seeking heightened regulation and a limit to the number of short term rentals permitted within a given area. 

The new proposed ordinance in the City of Detroit, for example, will supposedly eliminate 85% of the nearly 1,000 listings currently active there – something short term rental owners in the area are keen to prevent. This is because, in addition to a rule limiting the number of Airbnbs to roughly 1 per city block, the new regulations would make it so that only owner-occupied properties could be used as a short term rentals. 

Yet “private rooms” in a host’s house account for less than 50% of all the short-term rentals currently on Airbnb in the Metro Detroit area. The rest are whole-place stays, where guests have exclusive use of an entire house or apartment, and these types of properties are where most of the demand will lie as we enter the age of the new normal. 

This could be an opportunity for STR owners outside the City of Detroit to take advantage of the area’s growing tourism industry in the coming years. If the new ordinance is passed, guests may look further afield to Metro Detroit’s Ring Cities as an alternative to staying in hotels or shared STRs in the city center. 

So, if your property is located near to good transport links or local amenities, you should highlight these points in your listing. In places like Hazel Park, Dearborn, and Dearborn Heights, where there are several conference centers catering to private and corporate events, expect a healthy demand from business travelers and out-of-town visitors once we return to normalcy. Whereas, in the shorter term, cities like the Pointes and St Clair Shores might see demand rise as people search for an escape from the more densely-populated metropolitan areas. 

Whether you want to target tourists, businesspeople, or city-dwellers looking for a more remote getaway, the way you present your STR should be in line with what your ideal customer wants. For example: 

Budget Stays – These could be just a simple, private room in the owner’s house, with basic furnishings, or a no-frills apartment. The target market for these types of stays are budget travelers and businesspeople, looking for an alternative to a 2 or 3-star hotel. This means you won’t need to splash out on fancy interiors or extra amenities, but you will need to make sure the property is in a good location, since budget guests will value convenience and affordable travel costs above all else. 

Luxury Stays – These include high-end apartments and lofts or nicely-decorated houses, and should ideally be located in safer, trendier areas with a walkable downtown. Your target market will be the bigger spending guests, looking for an alternative to a 4 or 5-star hotel. This means that you’ll likely have fewer issues regarding the security of your rental, but will almost certainly have to work harder to accommodate guests’ high expectations. Expect to get detailed reviews listing any small thing that your visitors found unsatisfactory, like clutter, dust hiding in corners, or noise from outside the property. 

The short-term rental market in Metro Detroit is still not as developed as it is in other cities, like Chicago, but the industry was growing prior to the coronavirus outbreak, and will likely continue to do so once regular travel resumes. If you operate an STR, keep an eye out for new proposed ordinances in your area, voice your opinions to your local city council, and make sure you adjust your strategy accordingly if nearby cities impose their own Airbnb bans – this could be an opportunity for you to capture guests from those markets. 

Image Courtesy of Monica Silvestre

x Logo: Shield Security
This Site Is Protected By
Shield Security →