For many investors, a great strategy is to buy a fixer-upper, put in the work, and then rent the property out as a short-term rental using a service such as Airbnb. But could that be a good plan for you? This guide explains.
Should You Buy a Fixer-Upper and Turn it Into an Airbnb?
Buying a fixer-upper is a great idea, especially if you have:
- the time to put into fixing it up
- the money for repairs and renovations
- the patience to see the project through from start to finish
If you do buy a fixer-upper and get it ready for the market, it may be a good idea to use it as an Airbnb. However, if you choose to do so, check out the following sections; they explain what to expect.
Tip #1 for Buying a Fixer-Upper and Renting it Out as an Airbnb: It Takes Time to Build a Reputation as a Good Owner
When you first start out, it’ll take some time to build a good reputation as an Airbnb owner. It’s important to:
- respond to messages quickly
- have a clean and well-maintained rental
- be attentive to your guests’ needs
The better you are at these things, the more likely you are to get good reviews, which will in turn attract more guests.
Tip #2 for Buying a Fixer-Upper and Renting it Out as an Airbnb: You Have to Provide Furnishings
If you’re going to rent out your fixer-upper as an Airbnb, you’ll need to provide furnishings. This includes items like:
- beds and bedding
- towels and linens
- dishes and silverware
- artwork and decor
You may be able to find some of these items second-hand, but it’s important to make sure they’re in good condition. Your guests should feel like they’re staying in a comfortable, homey space.
Tip #3 for Buying a Fixer-Upper and Renting it Out as an Airbnb: You Have to Have the Rental Cleaned
When guests stay at an Airbnb, they expect the rental to be clean. This means you’ll need to:
- vacuum regularly
- dust all surfaces
- clean the bathrooms
- do laundry between guests
If you don’t have time to do all of this yourself, you may need to hire someone to help. This is an additional cost to consider when you’re budgeting for your fixer-upper.
Tip #4 for Buying a Fixer-Upper and Renting it Out as an Airbnb: You Have to Pay Utilities
When you rent out your property as an Airbnb, you’ll be responsible for paying the utilities. This includes things like:
If you live in an area with high utility costs, this could eat into your profits. Make sure you factor this into your budget before you buy a fixer-upper.
Tip #5 for Buying a Fixer-Upper and Renting it Out as an Airbnb: It May Be a While Before You Start Earning
If you’re relying on rental income to help pay the mortgage on your fixer-upper, be aware that it may take a while before you start earning anything. It takes time to:
- find guests
- get good reviews
- attract repeat business
So don’t expect to start making money right away. It’s important to have a cushion in your budget for those first few months.
Tip #6 for Buying a Fixer-Upper and Renting it Out as an Airbnb: Your Monthly Income Will Most Likely Vary
Another thing to keep in mind is that your monthly rental income will probably vary. This is due to things like:
- the length of stay
No matter how well you manage your property, there will always be some month-to-month variation in your income.
Now that you know what to expect, you can decide if buying a fixer-upper and turning it into an Airbnb is the right move for you. If you do go ahead with it, remember to take your time, be patient, and budget carefully. With a little hard work, you can be a successful Airbnb owner.
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