1. Laws: Home sharing and short-term home rentals soared when the economy slumped. It gave homeowners the opportunity to earn some cash and vacationers a way to pick up a cheap rental. Since then, it has morphed into real businesses, and hotels are not happy about that. The good news is, letting a home is legal in most places, but there are some, such as certain parts of California and New York City where regulations are tight. Check your local codes to make sure you’re in the clear before you take out an Arizona Airbnb Loan and get started.
2. Competition: The average person is now netting $21,000 per year by renting out a second home. The opportunity for profit is big enough that competition can be a concern in certain areas. If you find an area or property you like, check how many homes within a 5 or 10-mile radius are already available and whether they’re fully booked or not.
3. Location: Demand soars in specific areas. Beaches and other types of vacation destinations have high demand. You can also target locations by airports, business centers, hospitals, and other places out-of-towners may frequent.
4. Distinction: Although short-term rentals became popular because people were simply renting out unused space, today’s market is a bit different. Your rental will need to have distinguishing features or amenities. Some people craft their places around a theme, such as a beach or local attraction. Others focus on luxury, perhaps by using premium linens and offering concierge services. Some focus on making homes family-friendly. Identify a niche and run with it. Not only will you rent out your space more, but you can command more for it.
As you map out the potential profitability of any given location, keep in mind that the average renter is looking for at least a couple of bedrooms and wants to spend under $1,000 per week. Add up what your expenses will be as well. Things like making payments toward your Airbnb loan, covering repairs, cleaning between guests, and stocking household necessities should all be part of your budget. If the anticipated earnings don’t leave much profit for you, move on to a different location.
More than half of all people purchasing a second home are doing so with some form of financing, and bank loans are one way to do it for sure. However, if your credit is rotten or you don’t have other criteria the banks look for, getting an Arizona Airbnb Loan from a private hard money lender may be your best option. These are based off the value of the property you select and the home is used as collateral, so you don’t have to meet rigid requirements. Best of all, most are set up as interest-only loans, which will give you the option to begin renting your place out and generating cash without making monthly principal payments—just be sure you’re prepared to pay off the balance of the loan in its entirety when it’s due. With these things in mind, it’s easy to begin a lucrative rental business and create new streams of cash.
Level 4 Funding LLC
Hard Money Lender
Hard Money Loans
Hard Money Loan
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis Dahlberg Broker/RI/CEO
NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave | Austin | Texas | 78701
About the Author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 43 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.