How profitable is Airbnb?

Investing in real estate through Airbnb can actually be very profitable. Many successful real estate investors made their fortune from renting out on Airbnb. However, this depends on few factors that real estate investors should keep in mind.

The first factor is the location of your investment property. The location of the investment property plays a major role in how profitable the investment is, as you’ve probably already heard the saying “location, location, location”. This is especially true when investing in an Airbnb rental property.

Some locations yield a higher return on investment and are better suited for an Airbnb investment than others. It all comes down to the demand for short-term rentals in the real estate market. For example, if you’re a real estate investor in a market known for a strong tourism industry, such as Orlando real estate market, then demand for Airbnb rentals would be high, meaning investing in Airbnb would be very profitable. On the other hand, investing in Airbnb wouldn’t be as profitable in a real estate market that offers job opportunities and is attractive to students and employees, like the Austin real estate market, because demand for traditional investment properties would be higher than for Airbnb rentals.

The next factor that determines how profitable Airbnb is the type of your investment property. In the world of real estate investing, property investors are offered many types of residential investment properties to choose from. There are single-family homes, multi-family homes that range from duplexes to entire complex buildings, condos and townhouses, etc.

Some investment property types yield higher profits as traditional investment properties and others as Airbnb rentals. For example, a beach house would be very profitable as an Airbnb rental, while single-family homes are better suited as traditional rentals.