Recently, Airbnb came out with a study saying they contribute $420 million dollars to the local economy here in San Diego each year. That’s a big number, and we have a lot of clients asking us whether they should consider buying an Airbnb property or converting a property they already own into one.
If you’re asking yourself the same thing, the answer depends on a few different factors.
For example, the city of Del Mar recently changed the restrictions on how you can rent out your property—they limited the rental period to fewer than 30 days and lessened the number of times you can rent out your property to four times per year.
For decades, coastal cities have thrived off residents renting out their homes during the summer while they vacationed or traveled elsewhere. This means people visiting these coastal cities who couldn’t necessarily afford a hotel or were looking to bring their whole family along are getting squeezed out of the local market.
So, is it still worthwhile to buy an Airbnb property?
Our investor clients are still making lots of money off these properties, they’re super happy with them, and they’re calling us daily looking for more properties to use for this purpose.
To find a good Airbnb property, the first thing you want to examine is whether there is demand for hotel stays in your area. If your community doesn’t have a lot of hotel options and many people travel to it, look into those demographics.
Next, consider your budget and whether it’s even worth buying an Airbnb property in your area. Also, weigh your time commitment. The biggest management issue we’ve seen with clients is deciding whether they should do it themselves or hire a management company.
When advising our clients on these matters, we break it down to the very basics of buying a rental property—does the rent in the area cover the cost of owning that property and does it makes sense?
There are a lot of reasons people buy property for Airbnb or VRBO purposes, but when we sell a client a property, we figure out if the property makes sense from an investment perspective. Once we align with our client’s goals for that perspective, then we talk about whether they should consider renting it out as an Airbnb property.
If you’re looking for a property you’d like to rent out as an Airbnb or you already own a property you want to transfer into an Airbnb property, don’t hesitate to give us a call or send us an email. We’d be happy to help.