The Best Type of Property for Airbnb Investing

What’s up guys? In today’s video, we’re going to be talking about property types. Specifically, we’re going to break down which types of properties make the most sense for short term rental investing, which ones make the best investments, whether it’s a beachfront property, a mountain property, and a large vacation home or a small property that caters more towards business travel or travelling nurses? Should it be in a downtown metro area? Or more rural location? Should it be international should be domestic? I get these questions all the time? Should it be a single family or multifamily people are always asking you which types of properties perform the best at short term rentals. And so I wanted to put this video together to shed some light on that as someone who has owned manage on consultant on 1000s of properties all over the world that are short term rentals, successful and not, I think I have some pretty unique insights to share on this that I want to share with you guys in this video. So let’s dive right in. And let’s start broad and work our way more narrow. Probably the easiest question here is should I invest internationally? Or should I invest domestically? And my answer is that it really depends on your goals. from a lifestyle perspective. If you have an area or a country or a city that you’re particularly interested in from a lifestyle perspective, meaning that you want to own a vacation home there, then that can be a really great reason to buy a property in that location. One of the best things about short term rental investing is that lifestyle asset component, where you can actually own a property that you enjoy going to and vacationing with your family. That being said, if lifestyle isn’t the main priority for you, if you’re more just focused on return on investment, buying the best assets, then I do recommend, in most cases to invest domestically, because international investing is just going to add a little bit more complexity, it’s something you can graduate to later on down the road. But it’s probably going to be a little more challenging when you’re first getting started. Never impossible. It’s always very feasible, but it is just going to have different tax withholding components to it, different lending elements you’re going to need to become aware of. So it just adds a bit of complexity. So I don’t generally recommend as a first option, unless there’s some reason that it actually makes the most sense. So generally speaking, the answer there is going to be to invest domestically. Now let’s look at should you invest in a major metro area? Or should you invest in a more rural area? And the answer again, is it depends, I can clarify exactly what I mean by that. So really, what it depends on is your overall investing goals and your risk tolerance profile. For me, I really like investing in vacation homes that are in more rural areas. But I wouldn’t want to build an really sizable portfolio that only consists of those types of properties. Because the reality is with those types of properties, they generally aren’t going to cashflow as well as midterm or long term rentals if you need to use that as a backup plan. So I would highly recommend that if you are investing in vacation homes, that you consider what your worst case scenario is and your backup plan for the property. If you’re not able to use it as a short term rental or things just don’t go as planned as a short term rental. That’s why one of the most important things that we always focus on with our investing and with the members that we work with helping them to invest is the downside, we want to make sure that we’re protecting and mitigating against the downside, which you need to have different strategies for depending on the type of property you buy. Now, the downside of investing in a more urban area is going to be that you’re generally speaking going to let go some of the upside. The reason for that is that you’re almost always going to be buying a smaller property. That’s not always the case. But obviously we all know that it takes a higher budget to be able to afford a large property in a major metro area. So if you are going to bind that smaller property, which is what I see a lot of people doing when they do invest in metro areas. The nice thing about that is that oftentimes they will cashflow well still as a long term or mid term rental if you need to use that as a backup plan. So you get that nice protection and kind of balance to your portfolio. The downside though is that with smaller properties, there’s not as much elasticity on the price. Because you’re you have a lot more competition with hotels and other units that are as big as or bigger than yours. You just don’t get to really set the price for the market the same way that you do with a five or six bedroom property, or even a four bedroom property and a lot of markets where there’s just way fewer options for people to choose from and way less competition for you. So I’ve seen both strategies work. I personally really liked vacation rentals, but my business partner Raleigh also owns a triplex in a major metro area and not performed really, really well for him. And he’s got the added protection of having that long term rental as a backup plan. So it can work out really well. And if you operate as a midterm rental, it can also be more hands off. So there’s pros and cons to each and then it comes to you know, should you buy a property on the beach in the mountains? Should you buy a more seasonal property a less seasonal area? And again, the answer is really this time honestly, it’s not even It depends. It’s more so just that it doesn’t really matter. It really just comes down to your personal preference and what you’re optimising for so If you want a property in the mountains, then that’s great. If you want property in the beaches, that’s also great. Now with more rural, if you’re really up in the mountains, there are going to be some kind of issues that come along with that finding good cleaners finding good reliable maintenance people, perhaps getting guests actually to the property. If it’s on a on a harder to access part of a mountain, that can be some of the challenges come along with it. That being said, generally speaking, I don’t see any real advantage or disadvantage to investing in one different locale versus the other, it really depends on the specific location, the specific city that you’re investing in, more so than the general setting that the property is in seasonality is something that we always factor into our investing. But I always remind people that it’s not a good reason to not invest in an area, in my opinion, versus to invest there. Because if you’re investing in air, you want to be thinking long term, not short term. So I see a lot of people that are thinking, well, if I’m investing in a seasonal market than the only time to buy is right before high season because I want to make sure that I get good cash flow. The reality is it’s more a planning situation, it’s more planning question than it is a yes or no, should I invest in this market question? Because the reality is, we’re always looking at the investment, a long term time horizon. And we want to know what the overall return on investment is going to be in a given year, not just in a particular isolated six month period out of the year. So if you have a high season that makes up for the low of the down season, that’s great, that can be a really good investment opportunity. And if you’re buying and launching the property right before the low season, you just need to take into consideration that, hey, I’ve got to plan out my cash flows accordingly. Maybe you need to have some money set aside if the property is not going to make quite enough to cover its expenses through the low season. But the other thing that I always remind people is that you really want to actually run the numbers, a lot of people are unnecessarily afraid of the low season and they think that the the property will not not really just cashflow negative in low season, when in a lot of markets, the property is going to cashflow positive, every single month of the year, it’s just going to cash flow a lot more positive in some months of the year versus others. So it’s really important to run your numbers and make sure you do your planning for your cash flow. So you’re not in a tight spot. But generally speaking, I don’t shy away from seasonality, I think it’s great. I think it’s, it adds a bit of complexity to how you run your pricing. Sure. But it also lends itself to a lot of opportunity. I really like investing in seasonal markets. And oftentimes, there’s some really, really good deals to be had when you are going into low season because other investors and vacationers aren’t necessarily buying at that particular time of the year, for example, a mountain property where it’s really, really popular in the winter time, right at the end of winter going into into spring. That’s when things are going to really slow down in that market, because people that are buying homes in that area aren’t going to be buying it that time of year. So usually you can pick up some really good deals, then you just have to plan accordingly from a cash flow perspective. 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, that’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’ll 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 that’s my thoughts. Really, it comes down to a lot just your personal preference. Larger is generally a little bit nicer because of the price elasticity. But there’s downsides to that as well. As with anything you want to look at both the pros and the cons. There’s no one size fits all answer to this. And ultimately, it just comes down to understanding what your specific goals are for investing and what’s going to map the best to your goals and your overall portfolio. The nice thing about short term rentals is that if you build a portfolio of 5678 of them, you don’t need them to be all in one place. You can spread it out diversify and de risk your portfolio that way while also adding some really nice lifestyle advantages. So that’s my thoughts on it. Let me know your thoughts in the comment section down below. If you liked this video if you found it valuable or helpful in any way please do me a quick favour and hit that like button it really does help me with growing this channel and reaching more people With these videos also if you are watching this video and you’re not yet subscribed, make sure you hit that subscribe button. I’m posting new videos every single week on this channel helping you to learn more about short term rental investing. So I hope you found this valuable. And if you did, stay tuned, make sure you subscribe, hit the like button and I’ll see you in the next video.