4 Tips for Thriving in the Airbnb Vacation Rental Market

Since its launch in 2008, Airbnb has transformed the US vacation rental industry, opening up a new world of affordable booking options for travelers.

It’s also led to striking returns for savvy investors. Today, an increasing amount of self-made millionaires have grown out of Airbnb’s lucrative vacation rental industry, buoyed by a wealth of tools to help them grow their businesses, such as Airbnb profit calculators, Airbnb property market analytics, and many other Airbnb-focused platforms.

Today, despite predictions of a pandemic-induced decline, demand for Airbnb bookings continues to grow.

In the United States, demand for short-term rentals was up to 71% in some areas, according to a recent report by Mashvisor, a rental property investment platform.

Average Daily Rates also continue to rise, despite economic pressure on consumers.

From an investor’s perspective, a rising number of Airbnb vacation rentals makes standing out from the crowd more important than ever.

Yet, doing so is tough in an industry marked by changing customer tastes and frequent regulatory updates.

It’s easy to see why an investor may feel that one slip could lead to them falling behind.

Like with most business ventures, though, a smart and strategic investment approach can make a big difference.

Leverage AI to conduct market research and analysis

Conducting surveys, analyzing data sets, reading reports – market research has long been a time-consuming activity and, dare we say it, slightly boring.

Yet many property investors are now deploying machine intelligence when it comes to scoping out a new market. AI-powered algorithms can now conduct months of research in a matter of minutes by scanning data from millions of properties.

Machine learning tools can quickly draw up a complete list of short-term rentals for sale in target areas, as well as property performance metrics to give a clear picture of how they measure up compared to the national average.

You’ll know their occupancy rates, average daily rates, and return on investment (ROI) – all in the time it takes to make a cup of coffee.

Having this wealth of information makes it much easier to identify lucrative investment opportunities compared to just a few years ago.

It also puts users at a distinct advantage over other investors who don’t have access to these cutting-edge tools.

Set the right rental figure

Getting Airbnb rental prices just right is a balancing act.

On the one hand, setting prices too high may deter potential guests and push them toward rivals. Yet, on the other hand, setting prices too low risks undervaluing the property and leaving money on the table.

The market analysis mentioned previously comes in handy here, as well as key information about a target market, including average income and holiday budget.

To save valuable time and effort, dedicated vacation rental analysis tools can take this matter out of investors’ hands.

By using comparative and predictive data, they’re able to produce a rental rate that hits the sweet spot of maximizing profitability while keeping guest interest high.

Broaden your potential investment market

While many investors prefer to live near their property in case of problems, there’s no set rule saying that they must do this. Indeed, in today’s vast Airbnb market, this thinking cuts buyers off from promising investment opportunities further afield.

Digital search tools are now key components of a top investment strategy for Airbnb entrepreneurs. Much more powerful than just a few years ago, they boast an array of useful search features, such as heatmaps and neighborhood metrics, that make finding ideal investments easy.

Users can also use detailed filters, based on factors like available budget, financing method, and rental income to pinpoint the best options.

Property searches that used to cover just local opportunities have now expanded to include hundreds of thousands of potential purchases, leaving no stone unturned in the quest for a perfect investment.

Use new proptech correctly

Effective property management is crucial for a smooth operation during short-term rentals.

Most investors now use property management tools and services to streamline guest communication, booking management, cleaning, and maintenance.

These solutions also include smart technology such as keyless entry systems and automated thermostats for remote access and control.

Sound property management leads to positive reviews, which attract more bookings.

When done well, investors should see high occupancy rates and increased profitability, regardless of their proximity to the property.

Embracing Innovation: A Blueprint for Airbnb Investment Success

The United States is the busiest Airbnb destination with over 2 million listings per year, so capturing guests’ attention requires doing something a little different to stand out.

Knowing how to make use of a new wave of smart tech tools – coupled with savvy property management – can provide a vital advantage in today’s rental market.

With just a few tweaks to their investment game, investors can easily build a blueprint for Airbnb success.

About Peter Abualzolof

Peter is the CEO and cofounder of Mashvisor, a real estate data analytics company that helps even beginners make profitable investments in minutes.