Investing in Airbnb: A Guide for Investors Living 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.

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.

How to Select a Market

It will come down to making a list of markets you would like to own property in and running the numbers to determine if the market is a good financial fit as well.

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.

Airbnb Revenue

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.

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