Investor Real Estate Accounts

For real estate investors to keep track of their properties rental performance and tax information in one place.

This blog covers the general topic of real estate markets.

AirBNB vs Conventional Rental

first posted: 2021-06-12 11:05:10.760628

In terms of business setup, AirBNB is a hybrid between active hotel management and passive rentals.

AirBNB rentals make sense in certain locations where tourists or traveling businessmen are looking for short-term accommodation.

  • AirBNB need on-site management and housekeeping, management benefits from scaling up to many rentals
  • There is a risk of regulation by the cities authorities

The AirDNA platform scraps AirBNB data and gives income and occupancy estimates for any city in the world. If one buys flats in a touristic area, one can check the data and decide whether to rent as AirBNB or conventional rental.

Mashvisor allows comparing AirBNB and long-term rentals in the US. There is no automated long-term rental available for general locations outside of the US.

The two drivers of AirBNB returns are (1) average daily rate (ADR) and (2) occupancy. - Successful AirBNB delivers good value (low daily rate) and have very high occupancy. - Less desirable areas still have a minimum ADR under which the landlord will switch to long-term rentals, and low occupancy is indicative that the rental mode chosen is less profitable.

AirBNB is about management, but also about attractiveness and correct fit of the location.

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