The Rise of Airbnb – Why and How Does It Work? Real estate is known to be a fantastic investment because of its flexibility. In fact, you can buy and sell it for more profits or use it to earn continuous income through property rentals. When it comes to utilizing real estate through rentals, there are two major types: long-term spirit short-term.
Long-term rentals are ideal for people who want stable earnings month in and month out. But for people looking to make their money move fast, launching a short-term rental business on platforms like Airbnb is a great option.
First National Bank is an over 150-year-old award winning bank. The bank has convenient branches in Ohio, Pennsylvania, Maryland, West Virginia, North Carolina, South Carolina, Virginia and Washington, DC with 100s of ATMs.
- Online and mobile banking with Zelle®
- Free debit card with Card Guard
- eStyle Checking with no check writing and cannot be overdrawn
- Some accounts have no minimum balance
- Some accounts earn interest above a certain dollar value
First National offers multiple types of checking accounts suitable for almost all consumers.
Why and how does Airbnb work?
Airbnb, or “Air Bed and Breakfast,” is a popular platform where guests can rent other people’s properties over a short time for vacations and other purposes. But aside from using it to book your staycations, Airbnb can also be a good side hustle.
Here are the top three reasons why an Airbnb business is a good business:
- It’s a great passive income source
- It’s popular, and people prefer them over hotels
- It can be started even if you don’t own properties
Airbnb as a passive income source
Did you know that in 2021, the average American Airbnb host earned over $13,800 a month? These peaked during special holidays like Christmas and Thanksgiving and in vacation seasons like summer and spring. And although this number could not have been uniform for every host because of factors like location and amenities, it’s still an indication that Airbnb has good earning potential.
We cannot call a business passive if it does not earn independently, even without your daily efforts. And that is where Airbnb stands out. Because if automated properly, it will run and generate income for you even while you’re on vacation. You just have to delegate your tasks well.
Why do people prefer Airbnb over hotels?
The biggest business competitors of short-term rentals in any locality are hotels. In theory, people always go for high-rise buildings overlooking the city, and the local rentals don’t stand a chance. But this is not true for Airbnb hosts. In fact, people prefer Airbnbs for reasons like:
Airbnb allows people to be flexible with their space by allowing them to choose to stay in smaller spaces if they’re traveling alone or in bigger houses with multiple bedrooms with family and friends. All within a fraction of the cost.
Some hotels have pools that guests can use but may not want to for health and safety reasons. Airbnb gives them a chance to choose properties with special amenities like these, and they’ll enjoy it for themselves.
Imagine a family traveling to places together, staying under one roof, grilling by the poolside, and just enjoying their stay without having to share it with anybody else. These kinds of personalized experiences are precisely why people prefer Airbnb over hotels.
Launching an Airbnb business without owning
Let’s say you’re an employee who earns $6,000/month and want to replace it through your rental property business so you can quit for good and retire early. Suppose you own a single unit that gives you $1,000 per month; you’ll still need five more units to replace your income.
But there’s a strategy you can use to get faster return on investment (ROI) without needing to buy properties to get started. It’s called Rental Arbitrage. The Rental Arbitrage Model, also called Subleasingis where you rent properties from other landlords, get their permission in writing, and then launch their property as your own short-term rental.
With this, you can rent a couple of units, give them a nightly rate, and launch them to start getting bookings and recover your ROI faster. Yes, it’s perfectly legal, and Airbnb lets you do this on their platform.
Setting up a Sublease
The Subleasing strategy must have caught your eye if you’ve been reading this far and want to start an Airbnb business but don’t own properties. And that’s perfectly understandable because where else can you find a technique that allows you to launch a rental property business without owning properties?
However simple as it may sound, this strategy entails the right kind of knowledge to be set up successfully. Good thing we created a list of the four things you must have to make your Airbnb business work through Subleasing:
First of all, you must find properties to launch. But not any random space will do. For Subleasing, you need to go for properties in cities that allow short-term rentals, have amenities like heating and cooling, have a parking lot suitable for two vehicles, are away from noisy places, and are far from main streets. Importantly, it must also be within your budget.
Talking to landlords, getting their permission, and striking a deal with them are the foundation of your business. However, if you’re not a born negotiator, you might need to brush up on your pitching skills to get your sublease strategy on the road.
To avoid legal complications, you need to have an agreement with your landlord that says you can rent their property for some time and use it as a short-term rental on Airbnb. Your contract needs to show that they know this and will allow you to change the property locks for the whole period.
Owning an Airbnb business is not synonymous with passive income, especially if you get stressed out about managing the cleaning and maintenance systems for each unit. But don’t fret about it too much because you can make it more automated by learning how to organize and delegate your tasks.
The Final Verdict
Why and How Does Airbnb Work?
If you’re looking for another source of income, Airbnb is a great platform to explore and invest your time in. It has an innovative business model that will allow you to create positive cash flow because it is well-received by people worldwide. In fact, it even lets you get started even if you don’t own properties yet! This is truly a revolutionary business that’ll help you achieve the time, location, and financial freedom you have always dreamed of.
You can download our free ebook here to learn more about Subleasing and starting your Airbnb business from scratch.
Related Articles on Dividend Power
Here are my recommendations:
- Simply Investing Report & Analysis Platform or the Course can teach you how to invest in stocks. Try it free for 14 days.
- Sure Dividend Newsletter is an excellent resource for DIY dividend growth investors and retirees. Try it free for 7 days.
- Stock Rover is the leading investment research platform with all the fundamental metrics, screens, and analysis tools you need. Try it free for 14 days.
- Portfolio Insight is the newest and most complete portfolio management tool with built-in stock screeners. Try it free for 14 days.
Receive a free spreadsheet of the Dividend Kings! Join thousands of other readers!
*This post contains affiliate links meaning that I earn a commission for any purchases that you make at the Affiliates website through these links. This will not incur additional costs for you. Please read my disclosure for more information.
From poverty to a million-dollar business, Jorge Contreras is a real estate investor and coach. He started his real estate journey over 10 years ago, and he launched his Airbnb business 5 years ago. Before that, Jorge, like many others, was overworked and underpaid. He barely had time to spend with his family, and his business wasn’t exactly thriving. Once he got into the real estate industry, he realized the potential, especially with Airbnb and short-term rentals. When he became a millionaire, before the age of 30, he decided to share his knowledge with all the people who, like him, have the need to spend more time with their families and less time working. As of today, Jorge has already helped over 3000+ people reach their goals with Airbnb, and he wants to spread his message to anyone who wants to change their lives and achieve financial, time, and location freedom.