The Ultimate Guide to Airbnb Investment Property for High Returns

Scottsdale sees around 11 million visitors per year, bringing in over $3 billion in tourism revenue.

If you're looking to capitalize on Arizona's thriving tourism, one of the best ways to do it is to purchase an Airbnb investment property. The world of luxury rentals has been growing steadily over the past decade, so by purchasing a home to rent to tourists, you can bring in consistent rental income for years to come.

Turning a property into a successful Airbnb isn't exactly simple, however. It would help if you did your research into what kinds of properties attract renters, perform rental valuations, and fix the property up so it works as a short-term rental.

That's all before you start looking for renters. You'll need to do plenty more to attract guests and give them a quality Airbnb experience. Fortunately, you've got us to help.

Today, we will walk you through the entire process of buying and starting an Airbnb with high returns in Scottsdale. Keep reading and you'll have the vacation rental tips to turn to every step of the way.

Understand Scottsdale's Airbnb Laws

Every city has unique laws around vacation rentals and Scottdale is no different. Firstly, any property that is offered for rent for less than 30 days at a time requires a license to operate.

This license ensures that you comply with a variety of health and safety requirements. Each license costs $250 per year, per property. 

You must also register your Airbnb with the Maricopa County authorities and notify the neighborhood of your intention to run your Airbnb. Every Airbnb owner must have $500,000 worth of liability insurance should any injuries occur while the property is being rented.

Find the Perfect Investment Property

Once you've got a thorough understanding of the local laws, you can start searching for the perfect property to turn into an Airbnb. Finding a true money maker requires you to do a significant amount of research into the local real estate market.

It's not just about finding the best piece of real estate. It's as much about finding real estate that's situated in a desirable area of Scottsdale where guests can take advantage of their stay. For example, Oldtown and downtown Scottsdale are the two busiest areas for tourists in the city.

You'll want to perform a comprehensive rental valuation on a variety of different properties to figure out where your money is best spent. This involves looking at other Airbnb's of similar size and in similar locations. 

This involves looking at home prices in different areas of town, as well as Airbnb rates for similar types of homes. It can be tricky to evaluate homes as Airbnb's because you don't know how often they're booked up. Compare your mortgage payments to the potential monthly earnings and choose a property that has the biggest earning potential.

Turn It Into a Vacation Rental

Selecting your real estate investment should take time. Once you've closed on it, however, you can get to work turning it into the vacation rental you've always dreamed of. 

Start by assessing what major renovations the home needs. If there's potential to turn a single-family home into multiple rental units, that can greatly increase your ROI. If not, go through and give the home a deep clean, which will give you an idea of what needs upgrading.

Think long and hard about what you'd want to see when you show up to an Airbnb. Nice, comfortable furniture, entertainment, appliances, and as many other amenities as you can provide. Make sure the kitchen is fully stocked and everything is in working order.

You'll also want to secure the Airbnb, both for your and your guests' sake. Put padlocks on all of the doors and consider equipping the property with cameras for extra security. 

After you've finished converting the home into a luxurious vacation rental, you can start to find guests.

Get Set Up on Airbnb

"Airbnb" is the operative term for vacation rentals these days, but there are several platforms you can list your property on. Regardless of whether you prefer Airbnb, VRBO, or some other listing platform, the process will be the same. 

You need to create an enticing rental listing if your property is going to compete with the countless more established rentals already operating successfully in Scottsdale. It starts with your description of the property and the local area.

Be as thorough as you possibly can when describing the perks of booking your property. Leave no stone unturned when discussing the amenities in the home, as well as the property's proximity to all that Scottsdale has to offer.

You'll also need plenty of professional-quality real estate photos to go with the listing. Consider using drone footage of the property, both interior and exterior, to show it in the best light.

Market Your Rental 

When your listing is complete, post it on the platform of your choosing and start marketing. Airbnb marketing starts with a good listing, but there's plenty more you can do to put more eyes on the listing.

One popular tactic is to use search engine optimization (SEO) to push your listing higher up the rankings, both on listing platforms and Google. SEO involves numerous aspects, but one easy one to implement is keywords. 

By putting the right keywords in your listing, you can appeal to certain search terms to get your listing in front of the right people. Common search terms for vacation rentals are "modern", "luxury", and "private". Insert these seamlessly into your listing and see the view rate rise.

You can also try out paid ads. These will put your listing on social media, search engines, and relevant websites. It increases visibility and the likelihood that someone will click on and book your listing.

Set Competitive Prices and Offer Discounts

The other thing you need to think about with your rental listing is pricing. When you're just starting, you need to use competitive pricing to steal bookings from the more established Airbnb's in Scottsdale.

Lowering your nightly rates now will help you secure more bookings. The most important thing is to decrease vacancy rates so you're earning a steady Airbnb rental income.

Use seasonal pricing as well. Sliding scale pricing that lowers during slow seasons and goes back up when it's busy will help you maximize your ROI. Giving discounts for extended stays or repeat guests is another great way to get a few more bookings.

Provide an Optimal Guest Experience

If you don't provide an optimal guest experience, your vacation rental will fail. Good customer service starts as soon as the unit is booked.

The key to satisfying guests is being available without being overbearing. Make sure that your guests understand that they can contact you with any questions or concerns they have.

Give them all of the information they need to get to the property and check in with ease. Providing the right amenities will help ingratiate your guests with you, so consider offering complimentary goods from local shops. You can even provide local travel tips to make their stay more fruitful.

Ask for Positive Reviews

When your happy guests check out of your vacation rental, make sure to ask for positive reviews. The first thing people look at when they book an Airbnb is the reviews from former guests. This is the reason it's so difficult to stand out from more established rentals when you start your Airbnb.

Getting plenty of 5-star reviews and cheerful comments will make your rental stand out on the listing search. Having good reviews makes it much easier to secure future guests without having to invest more in marketing the unit.

Look at Airbnb Analytics

It's going to be crucial to monitor your Airbnb analytics. Look at important KPIs, such as occupancy rate, average daily rate, average length of stay, and net operating income. These numbers can help you make important decisions on pricing and marketing.

You can also use the aforementioned customer reviews to make positive changes to your Airbnb. Whether a customer leaves you a positive or negative review, there's almost always something you can glean from their comments. Use this to your advantage and constantly improve your short-term rental.

Hire a Property Manager

If you reside in Scottsdale, you can likely manage your vacation rental by yourself. When you live outside the city, you may be able to manage bookings, but you can't maintain the property or offer a quality guest experience.

Even some homeowners who do live near their Airbnb have trouble keeping up with their Airbnb owner duties. Whatever the case may be, hiring property management can make your life much easier running an Airbnb.

Luxury CashFlow for Your Airbnb Investment Property

At Luxury Cashflow, we can help you turn your Airbnb investment property into a luxury Airbnb experience. Where we differ from other property managers is that we give you a 1:1 property management experience. 

Our staff is adept at running successful Airbnbs, offering comprehensive property management services that include almost everything mentioned here and more. We'll help you market your rental, prioritize the guest experience, and crunch the numbers to maximize your ROI.

To learn more about what we do and how we can help give you high returns on your Airbnb, contact us today.