The time has come! For the next five weeks, I will share the process I used to identify, submit offers, and buy my first Airbnb property. I will go try staying high level on my IG post and then go into more detail on my blog. Looking forward to sharing the steps I used! I am by no means saying this is the exact way to do it, but I learned a lot during this month long process. Here we go!
Step 1: Identify Target Area to Purchase In
Step 1 in this journey was identifying an area to buy a property in! You will always hear from top real estate investors that you make your money when you buy! A key component of this is buying in the right area. Buying in an area that is attractive for what you are trying to use the property for.
The first thing you need to understand what areas are good for the type of investment you are trying to make. My goal was to buy a property that would work well for short term rentals (STR) through Airbnb/HomeAway/vrbo. A key thing you need to understand are the laws in your area. In Orlando, the Airbnb laws are pretty strict. There are many cities and HOA communities that don’t allow Airbnb. Period. Could you imagine if you spent time identifying a property to later realize you can’t use it as an Airbnb?! That would be a buzzkill.
So first, know the laws. After I understood the laws for each city, it was time to narrow down a more specific area. There are many programs you can use to assist you with this, but I found the best program to use to be Mashvisor.
What Is Mashvisor?
Here is the description used by Mashvisor on their website header
“Use analytics to ﬁnd lucrative traditional or Airbnb properties in a matter of minutes. No more spreadsheets, no more searching.”
The program has a monthly or yearly subscription model and I ended up paying $350 to use the program for a year.
Different Maps Mashvisor Provides
There are many views provided by Mashvisor that are really incredible. Below shows a snapshot of what you see when you search for a market.
The feature I like the most is the heat map Mashvisor creates. You have the ability to toggle between Airbnb Rental Income, Airbnb Occupancy Rate, and Airbnb Cash on Cash Return. Once you have selected a toggle, you can see heat maps showing more and less desired areas.
How I Used This Information
Having the information is only half the battle. Having a program to merge data from many resources is beneficial to reduce down time I had to research. I leveraged the ability to toggle between different heat maps to identify an area. When staying on the same part of the map, I would look at which areas had the most green. Once I identified an area having a decent amount of green, I would zoom in more to the area and do the same thing. I would continue doing this until I finally identified an area that was roughly 2 square miles.
Step 1 complete!!! I had identified the specific market I wanted to buy a property in!
- First understand how you plan to use the property. I planned to use the property for Short Term Rentals. I needed to ensure I narrowed my search down to only areas allowing STR.
- Leverage platforms that take data from sources. This will help to reduce the amount of time it takes to research an area.
- Continue drilling down into the map further until you have a very targeted market. Doing this allowed me to find a very specific area I wanted to target for purchasing a STR.