Recently one of my listings in Atlantic City was bombarded by multiple showings and multiple cash offers. It ended up going under contract over the asking price. The interesting thing was that 3 out of the 4 offers we had were investors looking to purchase the property as an Airbnb rental.
The benefit of an Airbnb is that you can use the property while it’s not being rented. It helps offset the cost of buying a second home while getting income at the same time. At the Jersey shore there are some great potential areas for Airbnb. I’ll go over that in a minute. First lets look at 5 tips buying an Airbnb at the Jersey Shore.
1. Check Local Ordinances And Rules
Many municipalities and associations don’t allow short term rentals. This is really important to know up front before being a home. It may be best to avoid condos and home owners associations.
2. Don’t count on Airbnb to carry the house expenses.
Short term rentals like Airbnb and VRBO can fluctuate as seasonal changes and buyer demands change. A good rule to consider is will the property work as a long term rental. If so it’s a great investment regardless or what may happen with the short term rental market.
3. Check with your accountant
IRS tax code may not allow you to use the property for personal use and still get tax write offs. Check with your accountant before jumping in to any real estate investment.
4. Calculate the expenses of a short-term rental
Vacation and short term rental property are more expensive to operate and painting. They need frequent cleaning and repairs. Also all utilities need to be on and ready for a potential tenant. If you own a property out of the area you may need to hire a property manager or have a maintenance contract in place.
5. Work with an expert to pick the right location
Location is a key factor in buying any property and especially when choosing an Airbnb or short term rental. Some things to consider: Is the are safe? Is it close to restaurants, activities, transportation? Is it close to the beach or a short drive to the beach? It helps to work with an expert who knows the area. For example in Atlantic City there are some great location for short term rental properties and then a block or two away areas that are undesirable. You may also consider areas on the mainland like Galloway or Egg Harbor Township. You can get more house for your money to accommodate larger groups of people. Plus your still a short drive to the beach and attractions.
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