How to Invest in an Airbnb From Out of State

There are plenty of reasons to think about investing in a short-term rental property out of state.

You may have just gone on a vacation and decided the people who own the place you are renting were making a killing.

Local Vs. Out of State

A much better reason is for the economics of it. If you are in an area where housing is in high demand and prices are in high demand, but the short-term rental outlook is average, it will be hard to make money there. When investing out of state, you get to cherry-pick markets that fit your criteria.

How to Select a Market

From a purely financial perspective, you will want to choose a market with strong rental demand, low demand for property, and good prospects for property price and rental demand growth.

Airbnb Expenses

Here are the main expense categories: - Mortgage - Property Taxes - Utilities - Insurance - Cleaning - Maintenance - Furniture - Linens

Airbnb Revenue

There is a rule of thumb that a good Airbnb should make 3x the long-term rental rate. You can find an estimate for the monthly rent on Zillow or Rentometer. 

The Revenue Calculation

Short term revenue boils down to this equation: Revenue = ADR (Average Daily Rate) X Occupancy

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