You’ve decided you want to start hosting vacation rentals. GREAT!!! There’s a lot to figure out, but Why NOT Me? Bnb is here to help!
Let’s start with one of the most basic questions: where do I get money to start my Airbnb? There are a few options.
- Cash- If your piggy bank is bursting at the seams, you can use your own capital to buy a property and get it up and running. While this would be great, it’s probably not available for everyone.
- Standard Mortgage- This is often best for first time Airbnb-ers. It functions just like a regular home mortgage. It usually entails putting 10-20% down and takes 60-120 days to close. This does get a little bit tricky, because often lenders don’t plan on you making income through your vacation rental, so it is treated simply as a second mortgage. Here are a few lenders that are very accommodating to vacation rental loans and even offer refinancing through vacation rental income.
- Quicken Loans- This is the biggest name in vacation rental-friendly loans. They have partnerships with Airbnb and Vrbo to allow refinancing through income recorded as part of the Airbnb/Vrbo process.
- Socotra Capital- This is the most enthusiastic lender I could find. If we can’t convince you to start an Airbnb, they will. They provide great information on the loan process and offer refinancing.
- Visio- Visio is the most highly recommended vacation rental loan service. They appear to specialize in only vacation rental loans and provide clear, succinct information on loans even if you don’t want to borrow from them.
- Portfolio Mortgage- These are similar to traditional mortgages, but are kept as part of a bank’s collection or portfolio of mortgages. They are smoother, and faster, but more expensive. This is best to consider if you own several Airbnbs and are looking to expand and buy more.
- Don’t Buy, Rent!- Buying a property and renting it out can be pricey and potentially high-risk, but it is possible to rent properties and then rent them out as Airbnbs. This is what works for us. Interested? Learn more and how to do it step by step in Why NOT Me? Bnb’s comprehensive online course!
However you decide to pay for your Airbnb, it is a great (and fun) investment!