If you already host visitors at an Airbnb, you may have thought about other ways to make money with this venture. Airbnb syndication is one way to generate more income with property investments. Buying an apartment or condo building as part of a syndication plan can help you achieve a higher return with little risk. These are some of the benefits of Airbnb syndication for people who already host short-term renters.

Key Takeaways

• Real estate syndication allows multiple investors to fund the buying of a property, and one party acts as a property manager or host.
• Syndication lowers barriers to entry for buying Airbnb properties.
• Syndication allows for more earnings and fewer expenses.
• Airbnb syndication can diversify your portfolio in a low-risk way.

What Is Airbnb Syndication?

Before you learn more about the benefits of an Airbnb syndication, you should understand real estate syndication. Real estate syndication occurs when multiple investors come together to pool funds and acquire a property. Essentially, Airbnb syndication is a form of crowdfunding the capital to finance a property investment. The investors passively provide money for the property, and one party takes a more active role in managing the property. In the case of Airbnb syndication, this party may act as the host for the visitors.

You Can Choose Your Role

One of the biggest benefits of starting an Airbnb syndication business is that there are several investment models. For instance, the investors can be general partners, meaning they invest more money and take on more risk, or they can participate in a limited partnership. In a limited partnership, the investment is more passive, and the risks are limited. As an investor, you can find a syndicate offering the type of partnership you’re interested in. You can also choose the size and scope of the syndicate.

Next, you can choose whether you’ll be an active or passive participant. If you’re already an Airbnb host, you may find that acting as the syndicate is simple. When other people invest their funds in buying the property, you can continue to host guests and manage the property. You can get a larger share of the returns as a result, and you will put less money into the investment to start.

You can also sell other investors on the fact that they can take a step back and enjoy the passive investment. Investors don’t have to spend time overseeing rental units and communicating with tenants. They have more freedom than with other rentals they may invest in.

You Have a Lower Cost of Entry

The barriers to entry for Airbnb syndication are lower than for other real estate investments. While you may not afford an apartment building on your own, you may be able to afford it when you join forces with other investors. If you intend to act as the host for short-term renters, you can keep your investment costs low and your return on investment higher. You’ll still invest some cash, but most of your investment may be in time.

At the same time, you’ll also be able to help other investors get on board by sharing the risk. You’ll be offering passive income to investors, especially if you’re the one who is willing to take on the Airbnb hosting duties.

Upkeep Costs Are Lower

If you choose to buy a building you can use for Airbnb rentals, syndication may be a better option than buying several single-family homes for this purpose. You can invest in a single property rather than in many, which may also reduce property taxes as well.