The Best Type of Property for Airbnb Investing

What’s up guys, in today’s video, I want to share with you the best types of properties to invest in for Airbnb. Now I see a lot of people making mistakes in this area. And what I see people doing a lot of the time is they try to find properties where and markets specifically where they’re not going to have a lot of competition. And they do that by looking for markets that have a very small number of short term rental properties in the area. And there’s a saying, you know, it goes, What if you actually look at where’s the best place to open an ice cream shop on an island, probably right next to the other ice cream shop or shops on the island. And what that means it’s actually, it’s actually a study that was done when you look at where’s the best place to open up an ice cream shop. And the reality is, it probably is right next to the other ice cream shop. Because if there was a better place than the ice cream shops probably would have opened up there. And so there’s something to be said, for markets where there is already a lot of short term rental properties, it’s probably because there’s a lot of demand, there’s a lot of people that actually want to go and stay there. And so if you go look at that market that only has 10, other short term rentals. Sure, you might look into an untapped market where there’s all this opportunity that nobody has ever realised before, but probably not, you’re probably just gonna go and buy a property in a market that nobody wants to buy property. And because nobody wants to book properties there, they’re just not good, you probably you’re just gonna get yourself into a bad market. And the challenging part is that it’s really tough to know which you’re going to do, right? There’s no data to base that decision on you can’t actually inform yourself and you kind of have to be taking a gamble. So even if it does pay off, it’s like, you know, what are you gonna do? Are you gonna replicate that by just keep on gambling? You know, when you put all your money on red at the casino, and then it pays out? Do you keep putting your money back in? Or do you walk away while you’re ahead? But we want to keep growing this, we don’t want to walk away, we want to grow a real portfolio of short term rentals and be able to replace your income, you know, be able to have a good retirement nest egg and just have really nice cashflow. So what is the best way to do it in a replicable way, so you can actually scale? Well, you need to be investing in markets where you know for sure it’s going to be a good investment. But you want to do it strategically so that you can still get that benefit that people are looking for avoiding the competition. So how do you do that? Well, you want to go into the right markets, for starters, and then you need to buy the right properties. So let’s talk about each and I want to share with you at the end of this video, the specific type of property I’m talking about within those markets. But before we do that, we have to talk about the right market first. Because if you buy the right property in the wrong market, then you’re not going to end up getting very good results at all.

The right market, in my opinion, should be a market that has at least a few 100, ideally, around 1000, or more short term rental listings already. The reason for this is pretty simple. Like I said before, we don’t want to be gambling, we don’t want to do that. Because even if it does pay off in the first time, it’s probably not going to be able to be something we can repeat time and time again. So I’m always looking for markets that have ideally somewhere around five to 700 listings or more the more the merrier, frankly, is it because I just love data, I love being able to have that confidence going into a market that I know it’s going to be a great investment. Because I’ve looked at the numbers. In order to have that confidence. We need the data in order for there to be data, there needs to be other listings in that market. So I’m looking for more listings is always better, right? So that means going into markets where you’ve got already some established demand. Now once you’ve done that, and there’s obviously nuance to it to figure out exactly which markets and which types of properties within those markets. But once you’ve done that, what’s the special sauce to get the properties that are going to perform way better than all the others and get these incredible ROI? Well, it’s going to be finding the properties that those properties specifically don’t have a lot of comps. Now that might seem really counterintuitive, based on what I just said, Boy you really want to focus on for this is looking for properties that don’t have good direct competition. So what I mean by that is if you go into any given market, then you’re going to find that one bedroom properties have the most competition. Why is that? Well, it’s because every other one bedroom property is a competitor. But so are the two bedroom properties, because you can still have a couple stay at a two bedroom property. I’m going to Austin, Texas in the new year, and I booked a two bedroom place for just me and my girlfriend because it was a sweet place with a really great location. And it was a great deal. So I booked a two bedroom place that we didn’t even need the second bedroom on. So that’s a perfect example of why a one bedroom place you know you’re gonna have more competition. It can also have three bedroom places. Now, not before you can also book a four bedroom place depending on how good the deal is. A couple people can book a four bedroom place that they want to so you’re competing with virtually every other unit of inventory out there, which means that your price is really going to be capped and your competition is gonna be very, very high. So you’re likely going to ended up with lower occupancy rates and lower total nightly rates, and just a overall lower ROI. Whereas if you go up to, let’s say, a five bedroom place, well, if you have a group of 10 people that’s looking to stay somewhere, a group family, a group of friends, are you going to be competing and considering that one bedroom place side by side with the five bedroom place? No, absolutely not. So that’s why buying larger properties automatically means that you have less competition in that market. Because you’re only competing with listings, they’re as large as yours and larger. So if you’re on the small side, it means that you’re competing with virtually everyone. If you’re on the higher side, it means that you’re competing with fewer and fewer listings as you go. So that’s one thing you can do to set yourself apart. But the other thing you can do is find unique properties that have unique elements that other properties don’t have. So for example, one thing I really did I did recently that I really liked doing, guys just want to take a quick break here to say that for those of you watching, who want to build cashflow, and long term wealth by purchasing Airbnb and short term rental properties, there’s a link in the description right down below for a free training that will walk you through my exact strategy for investing successfully in Airbnb. Now, if you’re not ready to actually buy properties, and you want to get started managing other people’s properties on Airbnb the same way I got started and build a full time income managing other people’s properties. There’s actually another free training linked in the description down below as well, there’ll be a really great fit for you. So whether you want to invest in short term rental properties and actually build amazing cash flow and long term wealth by acquiring the assets, buying the properties themselves, or you’re looking to earn a full time income managing other people’s properties on Airbnb, we’ve got some awesome trainings that are linked in the description down below, that will definitely help you out. When you sign up for the trainings, we’re also going to send you a few other tools and resources completely for free just to help you get started. Again, the links to sign up are in the description down below. And both trainings and all the tools are completely free. So make sure to register for the trainings, links in the description down below. So for example, one thing I really did I did recently that I really liked doing is I bought a property that was about a five to 10 minute drive away from a local ski hill. So it’s in this area where the ski hill isn’t this huge main attraction, it’s definitely a summer focused market. But this scale does help to smooth things out and get more bookings in the down season, I was able to have a $10,000 month in January when I was expecting and most properties in the area would only do about a $4,000 month, because I have this ski hill. Now that’s really great. Because there’s only so many properties within a radius of this ski hill. It’s not a massive ski hill, it’s not super popular, it’s a relatively small one. But there’s only so many properties nearby to it. And so naturally, there’s just going to be less and less competition, there’s not like they’re popping up more properties everywhere. And so if people want to go and see that scale, there’s fewer options. So you can use in a few different ways. You want to find things that are going to set your property apart and put it in a league of its own. Now, this ski hill proximity doesn’t put my property in a league of its own for the summertime, but it does in the wintertime. So that’s really helpful. The size of that property puts it into into league of its own. For the entire year of that property. I also had a nice big backyard. And in that big backyard, I added a geodesic dome. That’s a really cool unique feature, that property now has that no other property market has in that whole area. No other properties have that. So it really just sets it apart and puts it in a league of its own. We also added a hot tub and a sauna, we had a little movie theatre invasive, there’s these things that we can do to put the properties in A League of Their Own. So that’s really what you want to focus on is sure add the amenities like board games, yard games, you know, red kitchen amenities, things like that, they’re going to get the property good reviews that are going to make sure people are happy. But all of that stuff is relatively standard. And it’s pretty low barrier to entry for anyone else that wants to do that. So you’re not really setting yourself massively apart from the competition by doing those things. Again, not to say they’re not important to do. But that’s not a big differentiator for you. The big differentiators are the things that you’re going to look for when you’re buying that property that are going to set it apart in the league of its own. And I specifically love doing this in markets where there are a tonne of other comps because it gets me the best of both worlds. I can go and invest in a market where I can do my proper due diligence, do my analysis and know the numbers are going to be really good, but also get a property that’s going to outperform the numbers. So I know that because I ran the numbers on this property, it makes a lot of sense. But I also know that I should really be able to outperform these numbers. So my reasonable scenario, I almost always exceed it in terms of revenue. And I almost always get a better ROI than I anticipate because I’m being very conservative and buying properties that I know for sure will be good investments, but I’m almost positive will be great investments because I’m taking those steps to set it out apart from the competition and allow me to get those 30 plus percent ROIs that’s how you do it. It’s not by going and buying a five bedroom place in a market where there’s no other comparable five bedrooms to compare to. And now you have no data and you’re just taking a shot in the dark. It’s I bind that five bedroom in a market where there’s lots of other five bedrooms, and you can see the competition, you can see the market and see and make sure the numbers check out, but then doing things to make that five bedroom standout. So already, you’re not competing with all the four bedroom and lower properties. And also, you’re now doing things to make it stand out and beat out the competition. Now the five bedroom thing I think a lot of people get caught up on because I’ve noticed that I mentioned in a lot of my videos that I tend to like larger properties, cottage properties. And I want to be clear that that’s I’m not saying by any means that you have to go and buy a five bedroom property or you have to go and buy a cottage property. And if those are the only types of properties that were, that’s just an example I use, because one of the things that we do in the markets that we invest in is focused on those types of properties. But you can apply the same exact thinking the same framework to other markets and other types of properties. So don’t get too caught up and just thinking the five bedroom, that’s where I want to go. Because I’ve seen people do that. And I’ve talked to people who have watched my videos and think that way. And it doesn’t necessarily make sense in every single market. Right? You just want to focus on what’s best for your market. That’s why I started with the market. And this is just an example. But what you really want to do is buy a property that has good strong comps, but that also has unique features and factors about it that allow it to really stand out for the competition. So I think the probably the easiest way to communicate this now that I’m kind of putting this all together is really what you want to do is stand apart from the competition. I think a lot of people focus on going investing in markets where there’s no competition. And what you instead want to do is get the best of both worlds invest where there is competition. So you can do that due diligence, but do things to set your listing apart so you can beat the competition. So that’s my thoughts, let me know yours in the comment section down below. If you liked this video, if you have if you’ve just enjoyed it got value from it, then hit the like button. Make sure you give me some love on this video helps to get these videos in front of more people which obviously is a big goal of mine. I want to make sure that more people can learn about short term rental investing. So please take a half a second out of your day and just click that like button. I really do appreciate it. And if you’re new here you’re not subscribed, make sure you hit the subscribe button as well stay up to date with the two new videos we post every single week. All that being said, thanks so much for watching this video and I’ll see you in the next one.