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I am completely new to the idea of Airbnb with no experience whatsover but I have read a few things and found out that that it may be profitable if done right.
I am about to purchase a property in Wolverhampton as buy to let but will like to try it out with Airbnb with an exit strategy of single let.
my first of series of questions is: How can I establish if this property will work well with Airbnb i.e will i get bookings etc.
it’s a very beautiful and clean 2 bed semi detached house in a cule de sac just to mention .
Hi and welcome to the forum, I’m glad you found this resource. It has been and continues to be a great resource on all sorts of matters.
Having an Airbnb can be wonderful or it can be a nightmare - a lot depends on the hosts’ prep and expectations.
First, I would check your community (HOA?), local (city), county and state regulations to be sure you can legally do Short Tern Rentals (STR). Just because you may find some in the area does not mean they are doing it legally.
Next, check the competition. How many are there? What do they offer?
Read, Read, Read - read everything on the Airbnb site. Know what you can and cannot do. Know what they will and won’t cover.
Check insurance coverage for non-owner occupied STR (not just rentals - STR is covered differently)
Read, Read, Read much on this site but keep in mind it is an international forum and as they say “your results may vary”. That is true even state to state in the US. Also, people tend to bring up issues on a forum not praises so remember that as much as we may complain, we are still doing it so the good outweighs the bad!
Last from me - I’m sure others will weigh in…stay in a few before you go “live”. Find put what you like/dislike. Then stay in your place as a guest to test run the place. Bring only what you would as a traveler.
Profit is only one factor - it should also be fun!
In addition to the good advice above, also conduct a break-even analysis. If you’re priced competitive to others in your area, what % occupancy do you need to break even on your mortgage/payments? Check that break-even point against what you’d make with a long-term tenant, after factoring the cleaning, furnishing, and ongoing costs. In some areas there is so much saturation of the STR market that the profit is gone.
See if there are fellow hosts on Facebook. Find out about their rates, occupancy, and seasonality. (In my area we can charge almost $300/night in high season, but can’t give rooms away in the winter).
Look at your competition and see what you can offer that they aren’t. Can you be the place for high design? For families? For people with pets? Building a niche means you’re less susceptible to price wars, like you’d find if you’re one of 50 cookie-cutter listings.
Keep in mind that people who own property often don’t make a ton of money. Rather, the payoff is in the equity built on another’s dime.
As the others are saying – read, read, read – and HEED what you read. Don’t think you can cut corners, or fly below any local radars.
Don’t even THINK that you’ll make much money. That kind of mercenary attitude can be your downfall. Instead, THINK about providing a service to visitors to your area. This is the Hospitality industry, not a get rich quick scheme.
Don’t just stay in your own listing once you think it is ready. Go now – spend numerous weekends at a variety of AirBnbs near you and near where you’re considering buying. Look at what they have and don’t have, what they offer and don’t think about. Figure out what you would do differently in each situation.
Given #2 figure out what your niche will be that distinguishes you from all other AirBnbs within 50 miles. Then figure out how you can accomplish this most readily.
Personally I would never consider buying a property to turn into an Airbnb. My personal belief is that will make a 1000% better host if you ‘live where you work’ so to speak.
Location is key when it comes to choosing somewhere for STRs.
You will need to carry out your market research.
What type of visitor do you plan to attract
how large is the tourism market in your area for the type of visitors you want to target (Airdna and your tourist board will have market research you can buy
what can you charge - look at how those with comparable properties in your location are pricing on Airbnb and other listing companies
Put together a profit and loss budget with all your set up costs and on-going costs (including your time) and an estimate of how many days you can rent it out each month. This will tell you whether it might be worth doing STR
I do Airbnb and LTRs and found for my flat by the time I took into account my time, insurance for STRs and utilities there wasn’t much in it, so put it on LTR. You may find it is not worth putting it on STR once you do your research and put together your budget.
Airbnb Help Centre and Airbnb Community Centre (tips and tutorials forum) for all the basics around how Airbnb works, as well of course as using the search function on this great forum.
Many thanks for the responses. It’s indeed invaluable!
I have now started my journey with Airdna, etc to look at how properties are doing in the area and this will make me decide if I should move forward with other checks to use the property for Airbnb or if I should just go for my exit strategy ( single let) even right before entering the market :-).
If I have any further questions, iI will surely be back. Many thanks
I know Wolverhampton, not what you would call a holiday destination!
Can I strongly suggest you also contact the Grand Theatre, they have almost NO accommodations listed on their “digs list” and they get large shows now at the Grand.
To build on her comments, I recently converted my Airbnb rental in my hometown to long term rental due to market saturation. I couldn’t compete at the low rates offered by others as the number of rentals in my area increased.
The goal for my beach condo is for the rentals to cover the bills. However the real estate market had large gains over the past years. The 2 Br condo value is 155% of the cost of purchase and renovation 5 years ago.
Like @Allison_H pointed out the financial benefit is in the equity gain.
