Owning an Airbnb

Airbnb has gained a lot of traction lately and some people deem it good to make an Airbnb investment. It’s popularity if on the rise and tourists are attracted to such places. Airbnb are online vacation rental sites and people think that it is good to buy a real estate for short-term housing.
It is said that Airbnb property investment is to be decided on the key point of location. If you are located in a place where there is more demand for year-round renting, then you must never use your property as a vocational rental. On the contrary, if you have bought a place in the outer banks of a city or places that are closer to landmarks or special sights, then it is a really good thought to convert your rental property into an Airbnb.
So, before making a move, the investors need to take into account several factors. These factors are listed as follows:

Keep an eye of the laws:

Every business is subjected to laws and regulations. These laws tend to change really quickly and businesses are affected. Many major cities are enforcing certain limitations on the short-term renting. They now want to make the rental property land lords to go in for the long haul and rent these places to families and other potential customer.
In places that tend to attract high number of tourists, like Charleston and South Carolina, buying a rental property for the sake of an Airbnb would be great as there will be more margins. But unfortunately, the vacation rental is not legal and it is required by the landowner to stay at the property in order to cash-in on the rental money. While in some cities, an Airbnb place would require to pay some fees or extra accommodation taxes.

Make sure the property can be used as a long-term rental:

Placing your rentals at the vocational rental sites can increase your chances of earning more money.  But, we suggest you to think long-term and buy a property that can also be listed as a year-round rental. This will help you stay safe and rent it out for a longer period just in case things don’t work out as a short-term rental. You can also allocate your place to student accommodations and strike a long term deal with them to increase your margins.

Keep the tax rules in check: 

The IRS lets you have tax immunity if you rent the real estate for less than 15 days a year. But who would do that? If just in case you were not able to attract tourist then you can claim a tax relief, it is suggested that you switch to year-long rents before considering any other option. Some states have strict tax policies regarding short term rentals, while others are flexible. For example in Connecticut, before just renting out for 15 days, IRS tax code provides that rentals at less than fair market value disqualify the owner from taking into account expenses. That means you can’t keep it for personal use and still get the tax write-offs, and you have to be careful about where you set your rates

Consider the expenses of running an Airbnb:

Owning an Airbnb can be expensive and profitable at the same time. Because of people moving in and out at a paced rate, this calls for more call for maintenance. Keeping in check with the gas, water, cable, and ads, you need to spend a lot. It is said that not having enough customers flowing in will let you into a net loss.