How Hosts Obtain Multiple Airbnb Properties (and You Can Too)

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Updated: August 9, 2021

Author: Benjamin Harty

Hi, I'm Benjamin, Digital Media Strategist for Skyline STR. I have been involved in content creation for over a decade and love helping people develop strategies to grow their business. My wife and I are AirBnB photographers that are experienced in rental arbitrage and hosting on the platform.

Disclosure:
SkylineSTR.com is a participant in several affiliate programs and may be compensated for referring traffic and business to these companies at no additional cost to you.

Making extra money is one of the best ways to build your way up to an investment property, but you need to be able to purchase these properties in the first place. 

In this day and age, hotels are out, and Airbnb’s are in. Becoming an Airbnb host is simple, and it allows you to make a livable wage just from hosting guests. If you want to increase your Airbnb enterprise and accrue more properties, there are several simple ways you can use to fund your portfolio. 

Four ways many hosts like you can own more Airbnb properties quickly:

  1. Qualify for investment properties.
  2. Conventional residential mortgage loans.
  3. Use Heloc for down payments.
  4. Use private money lenders.

In this article, I’ll tell you about some of the most beneficial ways that professional Airbnb hosts can get more properties and help you decide which one is the best for you and your business. 

Qualify for Investment Properties

Best For:

  • People who have enough money for a 20% down payment.
  • People who want to start renting their property out right away.
  • People who live in areas with high demand for Airbnbs. 

Investment properties are properties that you won’t use as your primary residence. Instead, you will use them to make money. This income is taxed as self-employment income.  

As an Airbnb host, your property would qualify as a residential investment property since your guests would use it as a residence, but you would still profit from it. You can apply for financing using FHA Loans, VA loans, or conventional loans. 

However, securing investment property loans can sometimes be challenging, especially if you don’t have much to put down on your home. Since investment properties are considered riskier than primary residences, traditional banks will often require 20% of the property’s value as a down payment before they’ll lend you any money. This is because most lenders have stringent requirements you need to meet first. 

To qualify for an investment property loan, most lenders require: 

  • A 20% loan-to-value ratio. 
  • A credit score higher than 740.
  • Six months of loan payments in your savings or liquid assets.
  • A 15% to 20% down payment.
  • An appraisal and a rental schedule to indicate the income that you will make from hosting.

Investment property loans also generally have higher interest rates and additional fees than traditional mortgage loans. So, you might pay extra for this specialty property loan. 

In cases like these, hosts with multiple short term rentals often work with a professional rental arbitrage host who can agree to “pre-lease” the property in question for the first year to help secure funding on a new investment property.

Conventional Residential Mortgage Loans

Best For: 

  • People who want to live in their Airbnb property.
  • People who can wait at least a year before they start renting the entire residence.
  • People who cannot secure an investment property loan.
  • People who want to use their current home as an Airbnb rental property.

So, if you’re looking to Airbnb multiple properties but don’t want to pay extra for an investment property loan or can’t find someone to finance your next property, you might want to consider applying for a conventional mortgage loan. 

However, you will have to meet some particular criteria to get this method to work for your Airbnb property, legally. 

To apply for a conventional residential mortgage loan, you will have to use your Airbnb as a primary residence for at least a year. 

This method is usually best for people with duplexes, apartments, or triplexes since you can live in the property for a year while you get everything set up, then move out when the required time is up.  Conventional mortgage loans are also an excellent choice if you want to move into a new home and rent your old one out. 

If you’re genuinely invested in getting many Airbnb properties, you can live in the property for a year or more, then move and rent your old one out and keep moving every year or two. That way, you can keep accruing properties while only paying for low-interest loans. 

However, it is crucial to note that you should never lie about using your Airbnb as a primary residence when you apply for a loan. 

That’s because lying counts as occupancy fraud, and it can get you a 30-year prison sentence and a $1 million fine. Usually, if you live in the property for a year, you will be fine renting it out later, but you should always check the terms of your loan before using it as an Airbnb. 

Residential mortgages are cheaper and easier to qualify for than investment property loans, making it easy for you to find a low-interest way to finance your rental house. 

To qualify for a mortgage loan, most lenders require: 

  • 3% down payment.
  • A minimum credit score of 620. 
  • Private mortgage insurance (if down payment is less than 20%).
  • Proof of employment, not including the income you will make on your new Airbnb property.
  • Mortgage reserves, usually enough assets to pay 4 – 6 months of your mortgage payment.

Generally, using a conventional mortgage loan is favorable for many property owners because it is significantly easier to get one than the other methods. 

Still, the only major downside is that you will have to live in the property for a while before starting to rent the whole house out on Airbnb. 

Use HELOC for Down Payments

Best For: 

  • People who already have a home or Airbnb property or whose home equity is balanced.
  • People who have steady income and assets to pay off the loan quickly.
  • People whose mortgage loans have small down payments.

HELOC, or home equity lines of credit, are a flexible way to use your home’s value as collateral for a credit line. HELOCs work like credit cards connected to your bank account, and they allow you only to take out as much money as you need at any time. 

The equity on your home, your credit score, and the assets you already have will determine how much money you can access on your HELOC. So, even if you only need a bit of cash to fund a conventional down payment, a HELOC is a great idea. 

Still, since your primary residence is usually used as collateral for the loan, you could get into big trouble if you do not repay it. If you miss your payments, your lender could foreclose your home, forcing you to move out and lose all of the money you already paid on your first mortgage. 

The interest rate on HELOCs is also usually much lower than other credit lines, although the interest rate usually fluctuates with the economy. However, if you can, you might want to look for a fixed-interest HELOC so that there are no surprises for you in the future. 

Another benefit of using a HELOC is that it will significantly improve your credit score if you pay it off on time. That means that the better you do on your repayment, the more opportunities you will have to invest in more properties in the future. 

Use Private Money Lenders

Best For: 

  • People who can’t qualify for a conventional mortgage loan or investment property loan.
  • People with enough assets to pay a sizeable down payment.
  • People with low credit scores or who are self-employed.

Private loans, also called hard money loans, usually have fewer requirements than other loans. However, the interest rates and down payments for these loans can be pretty costly. 

Most private loan down payments can run at 20% to 30%, so you will need to save up before you can afford one of these loans if you buy a large property. The average personal loan interest rate is 10%, too, so you might not be able to pay off a private loan as quickly as others. 

When it comes to private money loans, the name of the game is to get your property generating revenue and refinance your loan ASAP. 

If you can take care of these requirements, however, then private lenders are one of the best options to finance your Airbnb investment without having to pay as much upfront or get a credit score check.

Can I list multiple properties on Airbnb?

Airbnb’s system is specifically set up to allow multiple listings and does not impose any limitations for the number of listings on a single account. Airbnb also does not limit the number of rooms or properties that are listed, so you could advertise 4 – 6 Airbnb properties and as many individual rooms.

How many Airbnb hosts have multiple properties?

While this number changes over time, many hosts with multiple properties on their account continues to rise. It is currently estimated that, in major cities like New Orleans, hosts with multiple listings account for 42% of the market share. In Miami, that number is closer to 57%. 

Final Thoughts

There are plenty of loans and credit options that will allow you to turn your Airbnb business into a profitable enterprise. 

So, whether you’re just starting as a host or renting your Airbnb on the regular, you can always find a mortgage loan or a HELOC that will work for you and your budget to expand your profits. 

And once you build yourself a nice portfolio of properties, you’ll want to check out our article on property management companies you can hire to help ease the burden of running multiple listings.

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