What Is an Airbnb Loan?

An Airbnb loan is financing given to purchase a rental home that you intend on converting into an Airbnb. There’s a lot of money to be made in Airbnb investment properties. For those of you with the gumption to get out there and grab your own little corner of this hot market, here are some tips on financing the venture.

These properties can bring in enormous revenues. Airbnb reported more than a hundred million stays in a single year. Figures like that have real-estate investors and savvy entrepreneurs salivating, and for good reason because there’s plenty of opportunity in Airbnb rental properties.

While the potential profits are undeniably exciting, there are a few things you should know about Airbnb loans. Before diving into your financing options for Airbnb properties, here’s an overview of the other expenses you should anticipate with these ventures

First, you’ll need to factor in taxes and insurance costs which will vary greatly from place to place. All you need to figure out is how much of the combined costs of taxes and insurance are going to take from your revenues.

Airbnb offers some insurance coverage, but it only extends to liability and property protection which may be insufficient depending on your preferences. 

While Airbnb takes a nominal 3% fee for payment processing as a commission, you’ll have other operating costs that must be considered. Expenses such as sheets, towels, etc. should be factored in as well as having the laundry done and having rooms cleaned.

You can save some money by doing these tasks yourself, and it can even help you qualify for a decent tax write-off. In the end, it comes down to how much you want to put into your property and how much labor you can afford to outsource.

When it comes to financing an Airbnb property, you can opt for a single loan for home renting or you can get a blanket loan to cover more than just the property. With the blanket loan, you can use the leftover money to help pay for the extra costs of taxes, insurance, necessities, furnishings, and cleaning.

Many banks offer different sized loans with a variety of rates for home rentals. The only thing they will be looking for is proof that you can pay back the money.

Loan mortgages for rental properties are also available to you. These come in single and blanketed loans. Again, with different prices and rates.

If your Airbnb is in a foreign country, you won't have to worry. Financing is still available for those, even if you choose to rent the property yourself before beginning your hosting. If you aren't a US citizen, you can still apply for a loan.

Receiving a renter, homeowner, or mortgage loan can facilitate any equity you have trapped within your current rentals or homes by refinancing. Doing so can help you, in the long run, keep your home/rental equity free.  To give you peace of mind, refinancing can amortize long term for 30 years.

Companies like Vacation Rental Property Loans offer a suite of lending options for real-estate investors like short term vacation home rental loans. These packages come as 30-year loans with a fixed rate and can cover up to 75% of the purchase price. With these packages, the short term vacation home rental loan is perfect for financing the purchase of Airbnb properties.

Have your heart set on multipleAirbnb investment properties? You could snatch them all up with a blanket loan. The advantage of blanket loans is that you can bundle loans for multiple rental properties in one neat package.

Not only does consolidating loans like this make them easier to manage, but you’ll also get a better deal. Blanket loans offer lower payments than you could get under several separate loans for each property.

There are other Airbnb related loans available as well, including home improvement loans. These loans offer financing to Airbnb owners to make improvements to the property. Airbnb itself extends this type of financing in hopes of making properties associated with the business model more comfortable to stay in for its customers.

Making your Airbnb look and feel more like a hotel can make vacationers feel more comfortable. Adding a few personal touches, like placing rolled towels on a shelf, or providing small soaps and shampoos in bathrooms, can make them more likely to want to stay again and leave a positive review.

For professional Airbnb owners, taking advantage of home improvement financing is essential. Like all rental properties, Airbnb homes require continuous upkeep. To maintain suitable conditions for guests, you’ll have to stay on top of improvements.

While Airbnb home improvement loans can be useful, you can only benefit from them if you already have one. For real-estate investors new to the game, a short term vacation home rental loans will be your best bet.

Once you’ve decided you want a piece of the action on Airbnb investment properties, you’re ready to seek out a lender. Not all financiers are created equal, however, and you’ll want one that you can trust. Respected industry leaders like Vacation Rental Property Loans have been making it easy for real-estate investors to get access to the capital for Airbnb property investments since 2014.

With short term vacation rental loans available, you can get a head start and jump straight into the Airbnb market.

Call Vacation Rental Property Loans and start profiting from the Airbnb market like a pro!