There are several ways you can try to create your own Airbnb. Financing an Airbnb property may be easier than many investors think. The opportunity may already be there in a bedroom, RV, moored boat or pool house you currently own. If you are looking to buy, it may require less initial capital to finance than you think. With the trip home in full swing and people ready to explore, starting your own Airbnb is an investment idea with a lot of potential.
How to finance an Airbnb property
Investment properties can be difficult to obtain conventional financing. Many home loans require higher down payments and higher interest rates. While there are some options such as a home equity loan or buying a multi-family home and living in it, lenders like LoanBud have great alternative financing.
Unlike many banks, LoanBud allows investors to qualify based on the rental property’s projected income. No tax return is required and the down payment can be as low as 15%. Even better – if starting an Airbnb is really right for you, LoanBud doesn’t set a limit on the number of investment property mortgages you can have.
Airbnb is a great way to generate passive income. Go ahead and invest, knowing that getting started is easy and there is an opportunity to progress through multiple investment properties.
How to start your own Airbnb – A step by step guide
Step 1: Decide what type of property to use as Airbnb
Looking for a beachfront condo, a lakefront bungalow, or a loft in town? Specify in which area it would be best to invest and in what type of housing you want to invest. Something with low maintenance is ideal, and knowledge of the area is helpful in determining whether an Airbnb would be successful there.
Remember that an Airbnb must be rented consistently to maintain cash flow, and the lender will need to see that Airbnb’s income potential makes sense to qualify the loan.
Step 2: Obtain funding
Once you’ve narrowed down your area and found a potential investment property, work with a lender and research the best plan to finance your Airbnb. Make sure your FICO score is at least 620 or higher and you have at least 15% down on the property – the down payment can be a freebie.
LoanBud is a great lending option for investment properties, with many investor-focused loan programs available. It understands real estate investors and offers a variety of options to get your loan approved and closed quickly so you can start earning rental income fast.
Step 3: Arrange and decorate
Now that you’ve secured financing for your Airbnb rental property and closed the iy, the fun part can begin. An Airbnb is a home away from home – you’ll do better with rentals if you can capture that quality. Repair the property if necessary, choose a theme to decorate and buy the furniture.
In addition to common necessities like furniture, make sure you have towels, linens, dishes, pots and pans, dish soap, and a coffee maker available for your guests. Make it a place people are happy to book – your investment depends on it.
Step 4: Determine logistics
After each stay, will you clean or hire a company? How much will you charge for bank holiday weekends? Weeks you want to block off for yourself? Will you have a property manager or will you do it all?
Train your team before your listing goes live, or be prepared to handle it yourself, as many Airbnb hosts do. Have a clear plan to achieve the most success.
Step 5: Market your Airbnb
Register on the Airbnb site and create your listing. Hire a photographer or take the photos yourself, but be sure to impress your potential tenants.
What made you want to invest in this property? Is it the view of the lake, the access to the beach or the proximity to a national monument? Either way, talk about it in the listing and get great photos to excite travelers.
Share your ad on social networks, with your friends, on your blog and on vacation rental forums. The more you market your property, the more bookings you will get and the more money you will find in your pocket.
How much money does it take to invest in an Airbnb?
If you use a mortgage lender that caters to real estate investors like LoanBud, you can start investing with as little as 15% down. Depending on your budget and your region, this will determine the actual amount of this 15%.
Don’t be afraid to start small. Get experience with your first Airbnb, earn money and use it for the down payment on your next investment. There is no limit to the number of investment property mortgages you can have with LoanBud.
Just keep in mind that you will incur other start-up costs for a successful Airbnb. These properties are usually offered fully furnished and nicely decorated. If you decide on a budget and stick to it, even this can be done minimally while maintaining style and functionality. You can do yard sales for furniture and decor or use things you may already have.
Strangers will use these items, so spending less on larger items is ideal, as visitors may not handle your furniture the same way you would and things break.
Frequently Asked Questions
Can I start an Airbnb without money?
Can I start an Airbnb without money?
It is possible to start an AirBnb without money. Think about what you currently have at your disposal. Can you rent a room at your place? Do you have a camper sitting in a campsite that you never get the chance to access? If you have a vacant property or a summer residence, turn it into an Airbnb and start making money from it immediately.