If you ask multiple people what their thoughts are on investment properties, you’re likely to receive many different answers. Some people believe that investment properties are inherently risky because there is quite a bit that can go wrong with them. For example, if the foundation has a crack in it, you’re liable to fix it! Other people consider these types of properties to be relatively safe, as homes appreciate most of the time. Plus, it’s an investment that you can almost always count on for a stable income.
At Ayvio, our view is that Airbnbs are relatively safe investments. Although it is true that any venture, whether it’s a rental property, or putting all your money in the stock market, carries with it the risk of loss, Airbnbs tend to be a safer alternative. Here are three reasons why Airbnbs are better than traditional rental properties.
It Has A Diversified Income Stream
With traditional property rental routes, you have one tenant that lives in your home for a specific time (maybe the lease is one year). That tenant pays a fixed rate per month. If anything goes wrong – the tenant loses their job – then your income stream goes away. Furthermore, in some jurisdictions, like New York City, for example, it can be incredibly costly to evict tenants. When you need income, that is when it can also cost you the most to oust the current tenant and find someone new.
Airbnbs have diversified income. You rent it out to someone new each day or week. As long as you pick your home in a good location, there will always be different people that want to rent it.