Updated : Feb 9, 2025
What comes to mind when you think of how to buy Airbnb property? Happy vacations, cozy condos, road trips, or perhaps your own unforgettable Airbnb experience? While these images often define the platform, there’s another side to Airbnb—one that’s about building wealth.
“Between 2017 and 2021, our rental income averaged $1,200 to $1,500 monthly, taking into account money set aside for mortgage payments.” – says Matt Krueger to Business Insider.
In this guide, we’ll cover how to buy Airbnb property, from selecting the best location to understanding both the perks and challenges of hosting.
Choosing the right property is crucial—great management can’t compensate for a low-demand spot. We’ll also share essential steps on how to buy Airbnb property to help you maximize your investment. Ready? Let’s dive in!
How to Buy Airbnb Property: Let’s Find If It Is Worth It?
According to research from Earnest, hosts typically earn around $924 per month on average. However, this figure can vary significantly based on location, marketing strategy, and property quality.
Additionally, you have the potential to increase your earnings by scaling your Airbnb business and adding more properties over time.
What does this look like for Los Angeles?
If you’re renting out a one-bedroom apartment in Los Angeles, where the average monthly rent is around $2,155, you could earn roughly $25,860 over a year with a 12-month lease.
However, with short-term bookings, you could charge a higher nightly rate, earning even more annually.
Let’s say your property is in the 50th percentile; you would charge $109 per night.
For an occupancy rate of 41%, your Monthly Revenue Per Available Night would be (Occupancy rate x ADR)
= 41 x 109 = $ 4469
Annual revenue could be: 4469 x 12 = $ 53,628
With short-term rentals, you can make up to $20,000 more! For me, this makes it worth it!
Let’s find out how to buy Airbnb property.
How To Buy Airbnb Property?
If you’ve been eyeing Airbnb to boost your income, you’re not alone—many are jumping on the short-term rental bandwagon. But as with any business, there’s no guarantee of success. You might even use your Airbnb earnings to grow your real estate empire.
- Secure Financing: You’ll need solid financing to buy that perfect Airbnb property. Options like conforming, portfolio, and short-term loans exist, but qualifying depends on your credit score. Be ready for a larger down payment—at least 15%—and brace yourself for higher interest rates since banks consider Airbnb properties riskier. If you’re going full-on business mode, consider creating an LLC to separate your personal and business finances.
- Assess Location: Location is everything in Airbnb investing. You need to assess both the occupancy rate and the average daily rate in your area. Popular travel spots like Florida, Nevada, and Texas are good bets if you need help figuring out where to start. Pro tip: pick a location close to home if you’re a hands-on host.
- Check Local Airbnb Rules: Before you get your hopes up, make sure Airbnb is even legal in your chosen city. Cities like Los Angeles have strict regulations, such as a 120-day limit on short-term rentals.
- Choose the Right Property Type: There’s no one-size-fits-all when it comes to Airbnb properties. City centers may demand a condo or small apartment to attract business travelers, while resorts could be better suited for single-family homes to cater to families or groups. Think about your target guest and pick a property type that fits.
- Analyze ROI Potential: Analyzing your Airbnb investment can be tricky since income varies with seasons, events, and travel trends. Start by doing a comparative market analysis to compare property prices in your area. Then, make a list of all the expenses—from mortgage payments to furniture and cleaning services—and ensure you can still make a profit.
How to Find the Best City for Airbnb Properties?
The right location plays a massive role in short-term rental investment. You should target hot markets with high profit margins. You should use tools like PriceLabs Market Dashboard to analyze market data and make informed, data-driven decisions.
PriceLabs’ Market Dashboard offers a comprehensive overview of the short-term rental market in your area.
- Stay on top of competitor pricing: After launching your vacation rental, use the Market Dashboard to track competitor pricing and local trends. This will help you adjust your Airbnb pricing strategy as needed.
- Make data-driven decisions: Base your pricing on accurate data, such as average daily rates (ADR) and occupancy rates for similar properties nearby. This ensures you stay competitive and maximize your earnings.
- Spot booking patterns: Analyze booking trends, such as length of stay and booking window, to fine-tune your pricing strategy. For example, you can adjust last-minute prices based on demand.
- Monitor industry trends: Track seasonal changes and special events that could impact booking rates. Adjust your pricing to take advantage of these demand spikes.
- Monitor your competitors: Understand what your competitors charge and how their occupancy rates are performing. This will help you find opportunities to adjust your pricing.
- Refine custom comparisons: Create custom comparison sets based on property type, size, and amenities. This helps you compare more accurately with competitors in your market.
During market research, finding out what amenities and add-ons your guests are searching for when booking a property at your chosen location is important. If you decide to buy a property in midtown Chicago, a workstation, high-speed internet, transportation services, laundry facilities, or wake-up call services might be helpful.
Build intelligent, data-driven revenue strategies
Create a Market Dashboard for your market and deep-dive into data-driven insights to make data-driven investment decisions
Create your dashboard now!Revenue Estimator Pro is designed for hosts in the short-term rental industry. It helps estimate the potential income a new property can generate before making a significant decision. Revenue Estimator Pro gives you an idea of the revenue of similar properties in the area and lets you compare similar properties in your locality with our compset.
It also provides instant reports that include:
- Monthly projected revenue: This helps you understand how much income the property can bring in throughout the year, considering seasonal fluctuations.
- Average daily rate (ADR): This metric reveals the average price guests are willing to pay per night, allowing you to set competitive base prices.
- Occupancy rate: This shows how often the property is expected to be booked, giving you insights into potential demand.
This can be a game-changer, helping you set the right price from the start and maximize your potential revenue. This will also help you set expectations about your property’s performance.
How to Find The Best Airbnb Properties: Easily and Efficiently
The short-term rental game has taken off in recent years, and it’s easy to see why—it can be super profitable. But to get to the success other Airbnb hosts enjoy, you’ll need to pick the right city and neighborhood, make sure everything is legal, stay within your budget, and find the best property deals.
Traditionally, finding the perfect listings to buy and rent on Airbnb would take around three months of research, data gathering, and a lot of number crunching—lots of chances for human error, especially when you’re doing it all on an Excel spreadsheet.
But here’s the good news: using the right tools on the right platform is smarter. PriceLabs can help you speed up the process, optimize your strategy, and get accurate data on actual Airbnb listings in the area. It’s a much easier way to set yourself up for success!
Frequently Asked Questions
1. How To Calculate Airbnb Profit?
To calculate your Airbnb profit, start by determining your total income. Multiply your nightly rate by the number of nights your property is booked. Then, subtract Airbnb’s service fee (typically around 3%) from this amount. Next, account for additional costs like cleaning fees, utilities, maintenance, property taxes, and insurance. These expenses can vary, so make sure to include both fixed and variable costs. Finally, subtract these expenses from your total income to find your net profit. For a more accurate estimate, consider occupancy rates and seasonality, as these will influence your overall earnings. Tracking your expenses and income regularly will help you optimize your pricing and maximize profits over time.
2. Are Airbnb fees expensive?
Airbnb fees can add up, but they are generally reasonable when considering the platform’s services. For guests, the service fee typically ranges up to 14.2% of the booking subtotal, which includes the nightly rate and any additional host fees but excludes taxes. The exact fee varies depending on factors like booking length, location, and total price. For hosts, Airbnb charges a service fee of around 3% for most bookings, though this may be higher for hosts offering Airbnb Experiences or using certain booking features. While these fees might seem steep, they cover Airbnb’s marketing, payment processing, and customer support, which helps hosts reach a global audience and manage bookings seamlessly.
