How to Invest in an Airbnb From Out of State

There are plenty of reasons to think about investing in a short-term rental property out of state. You may have just gone on a vacation and decided the people who own the place you are renting were making a killing. You may have been considering buying rental properties and then started seeing the comparison of long-term vs. short-term rentals.

Local Vs. Out of State When thinking about short-term rentals and Airbnb, people usually jump to thinking about great vacation destinations. While this is true, there is a huge demand for vacation destinations and excellent properties in those locations.

Airbnb Expenses

It is crucial to accurately estimate what your expenses will be to make a sound investment decision. However, what expenses and what proportion they will take on can vary wildly from market to market and by property style.

Here are the main expense categories: – Mortgage – Property Taxes – Utilities – Insurance – Cleaning – Maintainance – Furniture – Linens

Airbnb Revenue

Unlike expenses, it will be harder to project the revenue for a short-term rental. While you can get insurance quotes or calculate the property taxes after they reflect the new purchase price, you will not see a published number on what the revenue will be.

There is a rule of thumb that a good Airbnb should make 3x the long-term rental rate. You can find an estimate for the monthly rent on Zillow or Rentometer. If you find your estimates to be too far off of this metric, you better have a reasonable justification for it. Otherwise, you might need to re-do your calculations.

The challenge comes to determining what both of these are. First, you can scope out some competition by watching how their calendars fill up and how much they charge. Next, you can use Airbnb to see what other competitive units are getting. Finally, you can get an estimate from Airdna, Airbnb, and/or Mashvisor for the specific property you are looking at.

Main Tasks For Managing an Airbnb Listing

– Responding to inquiries – Cleaning – Maintainance Let’s look into each of these further to see what can be done to automate these tasks and achieve them from out of state.

Responding to inquiries is a no-brainer; all you need is a smartphone to achieve that from out of state. Cleaning is a bit more challenging. You can try to find local Facebook groups online and ask for recommendations, and you can try Angie’s list.

You will also want to communicate the schedule with the cleaners and confirm they will be there. You can do this as a simple text message. You could do it with calendar invites, or you could go as streamlined as using scheduling software to allow them to confirm, decline, and comment about any specific date that cleaning is required.

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