This was pretty eye opening when I realized this because I am a home owner living in Redondo Beach, CA near the beach in a very popular area for visitors.
- Homes in equivalent size/standards are most likely being rented out in a traditional way near you.
- The rent for these homes ranges from 20-40% higher than your mortgage (most likely).
- AirBNB allows you to rent out your home in a very temporary manner per night which drives the price per day to ~600% or 6 times.
- If you can manage to rent half the time out of the year on AirBNB while living in your rental, you'll be making a nice profit.
Here's some example numbers.
- Your home is $3000/month mortgage
- A nearby home equivalent can be rented at $4200/month traditionally.
- You can rent out your home nightly for $600 on AirBNB
- This would come out to about $18,000 if you could do this every day but let's say you just rented it half the time, it would be $9,000 per month.
- $9000 - $3000 - $4200 = $1800 profit per month which comes to $21,600 per year.
You end up making money even if you are pretty conservative in a busy area. Interesting.