A Step-by-Step Guide to Buying a Property for Airbnb

Editorial team
7 Min Read

Becoming an Airbnb host can be an excellent way to boost your income. Short-term rentals are the future of the industry, and the statistics indicate that more than 190 million people around the world use this particular platform. 

Once you get to learn the laws and regulations specific for your location, you’ll be thrilled to see that the platform is quite user friendly. You have the liberty to set some of your own terms and conditions for renting and you can easily get in touch with your potential guests.

Buying a property for Airbnb could be a profitable investment. However, if you want to maximize your earnings, it is important to pick wisely, so we’re here to help you make the best possible decisions. These crucial tips will guide you in finding the right Airbnb investment property in your area.

Pick an attractive location

square downtown buildings

In renting business, everything starts with offering an attractive location. The usual tempting locations include downtown or areas close to the place where a major event is held in your city. 

You can also use a heat map analysis tool when buying an investment property. It will provide insight into how potential visitors think and what are the most popular locations in your city. By choosing an Airbnb rental property in a desirable area, you can maximize the occupancy rate and boost income.

Get to know Airbnb laws and regulations

analyze regulations

Before buying a property for Airbnb, it is important to get to know local laws, as well as the regulations of this platform. Depending on your location, you might need a license before you can start a vacation rental business. If you fail to comply with the laws, you could pay huge fines, which can compromise your profit. 

Don’t forget to read the Airbnb regulations to learn the details of how the platform works. For example, all hosts are required to pay a small fee, which is something that you need to add to your expenses of running the business.

Determine your budget

budget piggy bank

Another thing to do before buying a property for Airbnb is to determine your budget. When setting a budget, it is crucial to consider that the listed price might not be the only expense. You might face hidden charges like closing fees, inspection, insurance, property tax, etc. Additionally, you will also have to consider expenses to optimize the accommodation for renting.

Your budget should correspond to your requirements, but without compromising your personal finance. If necessary, you can consider mortgage payments to avoid paying the entire cost at once. Or, you can consider applying for a title loan to help you acquire emergency cash for all of your property expenses.

Analyze available properties

Once you have your budget ready, it is time to hit the housing market. You can use a property finder tool, conduct an online search, or consult real estate agents in your area. 

It is important to establish specific criteria for picking rental properties. Apart from finding the best possible location you should also consider the following:

  • Size – do you want a large or small apartment? Are you looking for one or more bedrooms, and what kind of layout do you prefer?
  • Property condition – does the accommodation already have new furniture, or will you need to buy everything from scratch? What are other repairs required to turn it into a functioning vacation rental?
  • Age – while old houses and buildings have a specific charm, they might require additional investment in upgrades and repairs. 
  • Price – the cost of the property should meet your determined budget.

What are the expenses of your short-term rental?

Apart from the cost related to buying a property for Airbnb, what other expenses can you expect? These might be one-time or recurring expenses, including:

  • Purchasing new furniture to maximize guests’ comfort.
  • Buying appliances and devices like smart TVs and irons. 
  • Safety investments, such as security cameras or digital entry systems.
  • Ensuring there are enough toiletries, towels, pantry staples, etc.
  • Paying for Wi-Fi and other premium services.
  • Cost of cleaning services.
  • Utility bills for electricity, heating, etc.

Knowing your expenses as accurately as possible is crucial to optimizing your cash flow.

Use Airbnb profit calculator

money profit

If you want to run a profitable Airbnb, it is essential to set the right renting price. For example, rental properties located downtown are usually more expensive than those located in the suburbs.

Renting business newbies might benefit from using an Airbnb profit calculator. These tools take into account expenses, the occupancy rate in the neighborhood, and other variables to help you identify the right price and optimize earnings from your real estate investments. 

Listing your accommodation on other platforms can also help to maximize return on investment when buying a property. Airbnb and VRBO are the two most popular platforms out there, and they come with both similarities and differences.  


Property investors can earn a lot of money, but only if they make smart moves. When buying a property for Airbnb, you need to choose carefully. By keeping as many factors in mind as possible, you can pick wisely and maximize the earning potential of running a short-term rental business!

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