Are you looking for extra income, but idon’thave a lot of extra time? Being an airbnb host could potentially add thousands a month of extra revenue in your bank.
The average airbnb host earns close to $1,000 a month. You have to remember that is just the average. There are hosts out there making over $5,000 a month, as well. It all depends on what you are renting out. For example, a spare bedroom in your house may only make you three or four hundred a month. Some hosts rent out their guest house—that makes a little more money. The big money is in apartments and houses; and if you are in the right city that only adds to your profit.
However, before any of that money comes streaming into your pocket you have to find a loan. And, that is where the tricky part comes in. Banks are uneasy lending money for a rental home. It makes sense—if a borrower is going to default, it is going to be their vacation home before their primary residency. The problem with a rental is it can be vacant at times and the bank needs to feel confident that the borrower can pay two mortgages at one time—even without the extra income.
WHERE TO GET AN AIRBNB LOAN IN ARIZONA
Buying a property to rent out as an airbnb is more than just the property itself. There are various costs that are included when becoming an airbnb host. First, realize that if you rent out the home for more than 14 days you have to report it as extra income on your taxes. Secondly, there are supplies that you will need for your rental—such as cleaning supplies, bedding, dishes and furniture just to name a few. You will also need deep cleaning done after your guests leave. Many hosts tack a cleaning fee to cover a professional cleaning company to handle that. You will also need insurance. Airbnb offers insurance but it is only basic liability and property protection—you may need or want more coverage. Airbnb charges a flat 3% commission to cover the cost of processing payments. These are all things that need to be considered
Hard money lenders offer airbnb loans. These are short-term loans that a borrower can take out and can later transition into a conventional loan. These loan terms are typically six months to three years, but occasionally can be extended out for five years. The beauty of a hard money loan is the lender doesn’t base approval on your monthly income or your credit score—it is based on collateral. These loans are backed by the property. This gives the lender security. If the borrower defaults they can foreclose on the property. This gives the borrower sufficient time to make a consistent yearly income on the property, which is what will approve them for a conventional mortgage.
A lot goes into purchasing a vacation rental property.
It is important to sit down with your tax specialist to see how this will affect you. Look at other airbnbs in your area; how are they doing? Find a lender and discuss what a loan will look like for you. In the end, you will have a hefty profit as an airbnb host.
Level 4 Funding LLC
Hard Money Lender
Hard Money Loans
Hard Money Loan
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis Dahlberg Broker/RI/CEO
NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave | Austin | Texas | 78701
About the Author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 43 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.