In the past, travelers were limited to booking a stay at a local hotel or, in some cases, renting a vacation home/condo. Today, however, the tides are changing: an increasing number of travelers have begun utilizing Airbnb for their accommodation needs.
What Is Airbnb and How Does It Work?
Simply put, Airbnb is an online marketplace that offers accommodation in people’s homes across the globe. Unlike other rental platforms, Airbnb connects renters to just about any type of property imaginable. Whether you’re looking to rent an apartment within walking distance from the Eiffel Tower or even a houseboat on your favorite lake, you can typically find it on Airbnb. Rentals can be as short as a one-night stay or fall into a more extended time frame.
Essentially, this is how it works: A property owner lists the property (or portion of the property, like individual rooms or apartments) for free on the Airbnb website. From there, they can upload photos, write descriptions, decide how much they want to charge per night, and include other information. Once the listing is published, it’s visible to registered users, who can reserve and pay for their stay through the secure Airbnb platform. Travelers pay a service fee of 6-12% when booking, and property owners pay a 3% transaction fee.
How Does Airbnb Affect Cities?
The Airbnb platform has really changed the way people travel across the globe. In major cities especially, Airbnb has made it easier for travelers to find the accommodations they need at reasonable prices. Many travelers also enjoy the fact that staying in an Airbnb allows them to experience a city in a more authentic way than if they were to stay at a typical hotel chain.
One study of Airbnb in San Francisco found that the number of listings on the platform in this city alone grew by nearly 14% in 2015. Moreover, overall rental prices in the city also increased by 10.9% in that year, which was welcome news for property owners interested in renting out their real estate. Of course, the effects of Airbnb can vary from one city to the next, but it is worth noting the overall trends in larger cities such as San Francisco.
What Does That Mean for Investors?
So what does all of that information mean for the average real estate investor? Despite some investors’ concerns that the presence of Airbnb would have a negative impact on the world of property rentals, that hasn’t been the case at all. The only industry that has been affected by Airbnb is the hospitality industry, since fewer people turn to hotels and motels now that they have access to other rental options. Still, even the effect Airbnb has had on the hospitality industry has been relatively minimal.
In fact, many real estate investors can stand to benefit from the presence of the Airbnb platform. Owners of Dallas investment properties who haven’t yet explored Airbnb as an option for renting out their real estate may want to consider doing so to increase exposure and bring in more income. After all, the number of users turning to this service for their accommodation needs is only expected to increase in the future.
Overall, there’s no denying that the Airbnb platform has increased the opportunities for savvy property owners in terms of Dallas real estate investment. If you’re interested in finding the perfect DFW investment property, contact us here.