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Tony Sergi

Loan Officer
Movement Mortgage
NMLS ID # 369734

How can I buy an Airbnb rental property?

By: Movement Team
November 8, 2023
How many times do you go on vacation each year? Many people go on at least one trip, if not more. But no matter how many you take, you’re going to need a place to stay when you travel. Nowadays, many people are choosing fun and unique Airbnb spaces over boring hotels.

Airbnb owners have the opportunity to profit from this increasing interest in renting/staying at an Airbnb property. If this is something you might be interested in, too, we’re going to give you the inside scoop so you can see if it’s the right investment for you!

What is an Airbnb?

You may have heard this term many times, but what exactly is an Airbnb? It’s basically a short term rental property, often in popular locations, listed on Airbnb. Once posted, guests can book and stay on this property throughout the year.

By doing this, the rental income could potentially pay for the cost of financing and maybe even produce some profit for yourself. This allows you to have the rental income take care of the financing while you still get to build equity in your property as the owner.

Is this the right investment for me?

If the idea of possibly profiting from owning an Airbnb piqued your interest, it’s time to look at the details and figure out if this is the right option for you. Having one could be profitable, but you need to make sure it’s right for your personal situation, so here are some things to consider:

  • Location: Airbnbs tend to do well in popular areas, especially with tourists and attractions. Having a place near Disney World would probably be more successful than a property at least 30 minutes from your nearest Target. So, be smart about where you choose to buy your property.
  • Maintenance: As with owning any kind of property, there will be some maintenance involved. You may need to clean up after guests, deal with repairs or answer questions for your guests. It’s important to be aware of the time commitment before starting on your Airbnb journey.
    • Inconsistency: Although owning a short term rental might be profitable, the income may be inconsistent. Some months will be better than others, especially since people tend to travel more at different times of the year. However, by planning ahead, you can see if you’ll be able to cover your expenses during the bad months.

Owning an Airbnb rental property may help you gain some profit and equity.


Mortgage for short term rentals vs. a primary residence

There is, in fact, a difference between the kind of mortgage you get with a short term rental versus the kind for a primary residence.

When trying to get a mortgage for a short term rental, like an Airbnb, you’ll most likely need a significant amount of income or assets. There also is really no such thing as an “Airbnb mortgage.” However, before you get discouraged, there are financing options for rental/investment properties.

With this information in mind, here are some main differences you should know:

  1. There can be higher interest rates for a rental property.
  2. There’s a possibility of having higher down payment requirements.
  3. You may have to show evidence of past rental income (which, if you’re a first-time Airbnb owner, could be difficult).

More ways to finance!

Still interested in an Airbnb but don’t want to try and get a mortgage for a short term rental? No worries because there are other ways to finance this property.

When choosing your Airbnb, try a multi-unit property with space to move in yourself. By living on-site, you might even be able to list this as a primary residence, which could make it easier to get a mortgage on this property.

If you have a home of your own, you could consider leveraging your equity to finance your Airbnb. By doing a cash out refinance on your home or a Home Equity Line of Credit, you could gain some cash* to help with financing this property. (And who doesn’t love some extra cash?)

*By refinancing your existing loan, your total finance charges may be higher over the life of the loan.

Have some extra room in your current home? You can also decide to rent out those rooms instead, which could bring in some extra money to help finance your Airbnb.

Are you ready to take on an Airbnb?

An Airbnb can be a great way to make some profit and equity for yourself; however, getting one may be a little more challenging than expected. But if you’re ready to take on the challenge and learn more about your financing options, reach out to a loan officer today!

Find a Movement loan officer near you to get started.

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Author: Movement Team

About Movement Mortgage
Movement Mortgage exists to love and value people by leading a Movement of Change in its industry, corporate culture, and communities. Funding approximately $30 billion in residential mortgages annually, Movement is the sixth-largest retail mortgage lender in the U.S. Movement is best known for its innovative mortgage process and referable experience, which begins with Upfront Underwriting and a seven-day loan processing goal. The company employs more than 4,000 people, has more than 650 branches in the U.S. and is licensed in 50 states. After funding its balance sheet and investing in future growth, Movement's profits are paid to its primary shareholder, the nonprofit Movement Foundation. To date, Movement Foundation has received more than $360 million of Movement profit to invest in schools, affordable housing, communities, and global outreach. For more information, visit www.movement.com.

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Tony Sergi
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