Running an Airbnb® can pay for house financing and provide a passive source of income. However, purchasing real estate to rent isn’t the same as choosing a home for your family. Here are four factors to consider while browsing possible locations.

What to Look for When Investing in a Rental House

1. Location

People often vacation or travel for work to larger cities. There, they seek out places that are centrally located. Consider houses close to conference centers, restaurants, and bars to attract more attention. Assess potential locations based on safety and proximity to public transit or rideshare options that will entice visitors. Once you've narrowed down your choices, test their zip codes on the Airbnb host earning calculator. This will give you an idea of your potential earnings based on the area.

2. Type of Rental

Houses for rent have higher profit potential than apartments because they offer more generous square footage. Thus, they can host more guests. However, apartments and condos may attract more frequent rentals because they are smaller and suit solo or pair travelers just stopping for a night.

Large residences have higher operating costs and cleaning commitments, while smaller homes come with fewer care requirements and are faster to clean after guests leave. Weigh these pros and cons before making a purchase.

3. Amenities 

Houses that have extra features stand out among Airbnb listings. Spectacular views, swimming pools, and impressive home gyms all attract visitors. You can ask for a higher nightly rate because of these amenities. However, you will also need to pay someone to maintain the pool and care for the gym equipment.

4. Owner Costs

Houses for rent should net enough profit that they cover owner financing. Owners will need to cover monthly dues, maintenance fees, insurance, landscaping, and repairs. Airbnb charges a flat fee for hosts, usually around three percent of renters' payments in exchange for access to their massive network of users. Factor these costs into the nightly rates to decide whether the rental is worth the financial risk and effort.

People interested in purchasing property to rent out should talk to an agent at SWE Homes in Houston, TX. The real estate company has been open since 1987 and offers in-house financing that is more accessible than traditional mortgages. Call the real estate experts at (713) 413-1000 with questions. Visit the website to learn about available listings.