What type of property should I invest in for an Airbnb? This is a question that the average investor wouldn't know how to answer. I am not saying I am an Airbnb guru by any means but when it comes to Nashville I know supply and demand for short term rentals. Nashville is a big city with a small town feel and a metropolis thirst for tourism. Nashville has become a top 5 destination in the world which is reflected by our hotel prices being higher than Manhattan. What does this mean for Airbnb? It means everyone is beginning to recognize Airbnb as real option when visiting the music city. Hotel prices being at all time highs with no inventory to support a historic demand has now turned normal very nice houses being built around the action of Nashville as now potential cash cows.
I will give you an example of what one of these cash cows looks like and set the scene to paint a more vivid image. A great neighborhood for an example would be Germantown. This trendy new pocket of contemporary to craftsman style homes just walking distance from downtown has all kinds of new construction reflecting what an ideal investment property for Airbnb will look like. Once you know where you want to invest it really comes down to knowing the ins and outs of Airbnb. When a guest is looking for a property the first and most important search criteria is the amount of guest accommodated. Having a property that sleeps more people means more money. It could be a big house with only 3 bedrooms but it sleeps ten people which is what you actually advertise to potential guest on Airbnb. How is this possible? Well Airbnb is smart and figured out that more guest allows the guest to split the total cost of the stay between more people which in turn makes it cheaper for each individual guest. So back to the accommodating the magic number of ten guest. The secret sauce that allows for ten guest is either in the form of air mattresses, futons, or pull out bed couches. Airbnb allows these forms of accommodation as real options for guest staying at an Airbnb house. Once you have the sleeping accommodations down it's all about the details that give your property that cozy feeling when your guest walk in the door. The guest are essentially staying in a mini hotel but if the house has some character added through art on the walls, plants, Nashville decor, or trendy furniture can really go a long way in setting your Airbnb invest apart from the other guys. One of the next priorities of a great Airbnb investment is having a home that has something out of the ordinary whether it be a 3rd story, terrace, over sized shower, basement, bonus room, wet bar, pool etc. that can be seen when guest are searching through properties. If you are fortunate enough to be able to invest in a property with higher end finishes it is another way to draw to higher clientele. My biggest word of advice would have to be it's all in the details when it comes to finding that great cash cow airbnb property.
Once you have found that great Airbnb property it's time to change your focus to making sure you know the permit situation thoroughly in whatever city your Airbnb is in. Nothing could be worse than spending all this money in what you thought was an amazing investment only to be stopped by Uncle Sam because you can't get a permit. Some cities around the USA are more Airbnb friendly than others. It is such a new model that most state and local governments have not been able to keep up with the growing pace of Airbnb. A good way to gauge how friendly your city may be to Airbnb would be to look at regulation of other profit sharing models already established in that area like UBER or Lyft. There seems to be a real correlation between governments attitudes toward these new resources that can give a good idea if the future looks grim or bright for your Airbnb investment. If your city is one of the non friendly I suggest you get involved and help push back to put the power back in the people's hands so everyone can benefit.