Becoming an Airbnb Host

Understanding How to Source Rentals

Searching for a property to list as a vacation rental can take time. Understanding your local market as well as your overall target market will help make the searching process much easier. Utilizing a local relator may also speed up the search, as they are the most familiar with what’s offered in your area.

by Rabbu

Taking a Bird’s Eye View of a Market in Flux

Low volatility and high returns have traditionally characterized the real estate asset class, making it a great way to diversify a portfolio and achieve safe but significant gains. 

In some ways, the vacation rental market offers an even better equation. Short-term rentals have higher average daily rental rates than traditional accommodations, as well as long-term rentals, and payment events occur more frequently, bringing some liquidity into the investment.

But the recent market disruption of the COVID-19 pandemic has complicated the volatility in the market, and home prices have risen to new heights faster than they normally would move. As purchase prices continue to change along with consumer preference and traveler demand, it’s important to take a big-picture view of the short-term rental market at the sourcing stage.

The Digital Starting Line

A pandemic-era article named browsing homes on Zillow one of the more popular pandemic pastimes. For an aspiring host, this first browse is more than just escapism. It’s important to be thorough in the first digital search, using standard real estate listing sites like Zillow, realtor.com, and others to start to get a sense of the market as it stands.

Using the locational considerations reviewed above, hosts can begin their own online audit, understanding the purchase prices in those areas and what kinds of properties remain on the market. Crossing those findings with a basic revenue predictor analysis, also covered above, can help to give hosts a sense of their potential bottom line. 

This aspect of the purchase process is another place that the COVID-hand of innovation has left fundamentally changed. 

Today, more artificial reality (AR) empowered open houses, 3D video tours, and automation software can make it easy for hosts to get a real sense of the properties they’re assessing without spending too much time playing phone tag with property representatives or traveling on a whim to see a property that might disappoint. 

Hosts can use this new look behind the scenes to their advantage for a fast and effective first phase.

Time to Go Local

When a host has a sense of the market as it’s represented through digital listing sites, it’s time for them to get in touch with a realtor in the surrounding area. 

As the ascent of short-term rentals has become more pronounced, many realtors have a strong sense of the Airbnb market in their areas. With their experience and immersion in the dynamics of the specific market a host is targeting, realtors are invaluable at this stage of the property search.

If a host is approaching the property less for personal use and more for portfolio optimization, they might need to further explore the asset independent of locational considerations. Once they’ve narrowed down their interest, they might then need to be in conversation with multiple realtors in the different market segments they’re considering.

Don’t Re-Invent the Data Wheel

Airbnb investing isn’t rocket science, but it is increasingly data-intensive, and as is often the case for fail-proof investing, more data is better. But this shouldn’t deter hosts who might not find their calling in the facts and figures side of things. Partnerships at this stage are absolutely crucial to sourcing a property that has the right potential for each individual host. 

Hosts can use the Rabbu platform to set individual and personalized investment criteria, then browse a “Zillow-like” experience (but with specific STR stats) to find properties that match it, or view all sourced properties across the U.S. These on- and off-market deals come accompanied by rich data projections to allow for efficient sourcing and analysis. 

With a pulse on how property values and rental demand are changing in real-time, this strategy helps to make sure that investors don’t have to be chained to their desks to have access to a time-sensitive deal. It also reduces the mental fatigue that can set in at this stage of property sourcing, when the numbers blur and all of the properties start to resemble one another. 

By leading with specific data inputs, the host will only be alerted to the properties that fit the terms of their interest and correspond with what they’ve prioritized for their acquisition. 

Find Your Community, Early

Tech, experts, and data — all of these things are great to have on your side. But there’s nothing like connecting with a community of like-minded people who have walked the same path. 

New-to-market companies have online communities in which hosts and experts can connect in casual conversation. Further, the ever-present corners of Reddit, LinkedIn, Discord, Clubhouse, and Quora are full of experienced hosts who would love to help. 

It’s always beneficial to survey frequent travelers and guests at the acquisition stage as well. Understand what guests have loved in their own Airbnb experience.

Think of the trips your family has taken that will stay in your memory for the many years ahead. What made those experiences special? What makes people want to come back? Those insights can help guide the sourcing process just as much as a balance sheet can.

Find Calm in the Property Search Storm

A thorough property search takes time. But there’s no reason for hosts to go through the process alone. 

Digital searches now have enhanced property viewing capacities, allowing hosts to get a strong sense of the market without leaving the comfort of their homes. Having spent some time on Zillow or other listing platforms, engaging a local realtor will be the best next step. 

From there, turning to market partners that have made the data easy to leverage will be crucial. Rabbu’s short-term rental investing platform takes a lot of the stress out of the search and allows relevant listings to find investors, rather than the other way around.

Through it all, keeping in close conversation with an experienced and forward-thinking community will help the property search process feel exciting, engaging, and full of potential.