Introduction

If you plan to invest in Airbnb properties, choosing the right property type can significantly impact your financial success. While there is no definitive answer to the “best” property type, certain options tend to offer exceptional potential for returns and long-term growth.

Whether you’re a newbie or a veteran in real estate investing, understanding the key characteristics and earning potential of the best property types can help you make informed decisions and maximize your investment opportunities. 

What are the different types of properties on Airbnb?

Here’s a breakdown of the different Airbnb property types that investors can choose from: 

1. Entire House

This refers to a standalone property or a separate unit within a building that is rented out in its entirety. You can provide guests exclusive access to all the rooms, amenities, and facilities within this type of property. 

This exclusivity allows guests to keep the space to themselves, without encountering the host or other guests, during their stay. An entire house on Airbnb provides complete privacy and is ideal for families or groups who prefer their own space.

Buying a house for Airbnb rental is also a wise investment since houses can build more equity compared to other property types. However, they have higher maintenance costs due to their size.

2. Apartment and Condo

An apartment is a self-contained living space within a larger building or complex. It typically includes a bedroom, living area, bathroom, and a kitchen or kitchenette. While guests have exclusive access to the apartment, there may be shared common areas such as the building entrance, hallways, or laundry facilities. Buying an apartment for Airbnb is not only relatively cheaper but also easier to maintain.

A condo typically works the same way as an apartment with its shared common areas. However, condos usually have individual owners and can offer a higher level of privacy to guests. Buying a condo for Airbnb can allow you to offer guests additional amenities such as swimming pools, parking spaces, and fitness centers. These amenities are, of course, shared with residents or other guests in the building.

3. Private Room

A private room refers to a bedroom within a host’s primary residence that is available for rent on Airbnb. Guests can enjoy privacy in their rented room, but they share common areas such as the living room, kitchen, dining area, and bathroom with the hosts and other guests. While still providing personal space, a private room allows guests to interact with and experience local hospitality from the hosts.

4. Shared Room

A shared room is a single bedroom shared by multiple guests at the same time.

This type has typically dormitory-style arrangements with multiple beds or bunk beds. Guests in a shared room may have access to shared bathrooms, kitchens, and other common areas. Shared rooms are the most affordable option, appealing most to budget and even solo travelers. 

What type of property is best for Airbnb?

There really isn’t one. Most people would point you to the property type that has the highest occupancy rate and gives the most income. While there is nothing wrong with this advice, investors seem to forget to consider gross rental yield when buying an Airbnb property. 

What does gross rental yield tell you?

Gross rental yield helps you assess the potential profitability of an Airbnb investment property. It is calculated by dividing the annual rental income (before expenses) by the property’s purchase price or market value. By comparing the yield to other investment opportunities or market averages, you can determine whether the property type you have in mind has the potential to generate a good return on investment.