Will Your House Actually Make Money on Airbnb?

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It's a question I get all the time: "Will my house (or the one I'm thinking about buying) actually make money on Airbnb?"

The short answer? No one knows for sure.

There's no magic answer or crystal ball. But that's what makes this business exciting - and risky. It's part of the game when it comes to investing in short-term rentals. But don't worry, there are plenty of things we can do to get a solid idea of your property's potential.

Start with the Data: Your First Step to Success

Whether you're turning your current house into a short-term rental or buying a new property, it's all about looking at the numbers. Don't make this a guessing game. You need to check out:

• Occupancy rates

• Average Daily Rate (ADR)

• Revenue Per Available Room (RevPAR)

This is where tools like AirDNA and Rabbu become your best friends. They let you dig into the metrics of different markets and even narrow it down to specific neighborhoods. The more granular you can get, the better you'll feel about your decision.

Pro Tip: Mindset is everything in this game. If you're going to do this, do it right.

Setting Your Property Up for Success

To give your property the best shot at making money, you need to:

1. Get your place ready and well-staged

2. Invest in professional decoration

3. Price strategically

4. List on all the major platforms (Airbnb, Vrbo, direct booking sites, Google)

Remember, presentation and visibility are key to attracting guests and maximizing your income.

The Surprising Truth About Profitable Locations

Here's something interesting I've seen time and time again: Some people are convinced certain areas will crush it on Airbnb, while others overlook sleepy little towns that turn out to be goldmines. Let's break it down:

Vacation Spots: The Double-Edged Sword

Popular vacation destinations can kill it during peak season, which sounds great. But what about the rest of the year? Often, it's dead or the rates plummet. You have to be prepared for these slower months, and many people aren't.

The Power of Diverse Guest Pools

Compare that to places with a more diverse guest pool, and you'll often find long-term consistency. These are spots like:

• Suburbs of bigger markets (think Englewood and Littleton outside Denver)

• Smaller cities near major hubs (like Round Rock and Georgetown outside Austin)

People often overlook these markets, but they can surprise you. Take Georgetown, where I am now. The diversity of guests is incredible, which makes it consistent. We're talking:

• Families visiting

• People moving in or out of the area

• Homeowners needing a place during renovations

• Contractors on remote work assignments

We might not pull in $500 or $1,000 a night, but we get consistent bookings. That's what drives RevPAR, and that's where you win.

Key Takeaway: Consistent bookings in a diverse market often outperform reliance on peak season tourism dollars.

Start with What You've Got

Sometimes the best place to start your short-term rental journey is right where you're at - literally, the home you live in. There's a reason you chose to live there, and odds are, those same reasons will attract others. It could be:

• Local events

• A cute downtown

• That homey, welcoming vibe

Before you start Googling "best short-term rental markets," take a look at your own backyard. It might just be the perfect spot.

Data Plus Intuition: The Winning Formula

While data is essential, don't forget about intuition. Sometimes the data may not be there, or there might not be many comparable short-term rentals in the area. But if everything looks right - proximity to attractions, new development, a growing guest pool - that's where you might want to listen to your gut.

It's risky, but I've seen off-the-beaten-path properties turn into some of the best performers. Why? Less competition means it doesn't take as much demand to do well.

Making Educated Decisions

In markets with plenty of data, the decision becomes easier. High demand and lots of bookings usually mean less risk. We do this all the time for clients - helping them make educated choices based on data and intuition.

There's always risk because nothing is guaranteed. If it was, everyone would be doing it. But outside of a couple months during the pandemic, we've done a great job of predicting our properties' performance with a lot of accuracy.

The Secret Sauce: Optimization

A lot of success comes down to optimization:

• Design

• Photos

• Guest experience

• Pricing

These little details add up to make a huge difference.

The Bottom Line

Will your short-term rental or the house you're thinking of buying make money? There are no guarantees, but if you:

1. Look at the data

2. Trust your intuition

3. Put in the work

You can give yourself a very solid shot at success.

If you've got questions about your specific property or you're curious about how we do things for our clients, reach out. I'd love to chat with you about the numbers, what we know, what we don't know yet, and see if it makes sense for you.

Remember, in the world of short-term rentals, knowledge is power. The more informed you are, the better decisions you'll make. So dive into the data, trust your gut, and get ready for an exciting journey in the world of Airbnb and short-term rentals.