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Total newbies here. We’ve bought a 1bed flat in Fulham, that’s decent size with a garden and we’re hoping to convert the basement at some point soon hopefully and make it a two bed.
Question - covering the mortgage. Monthly mortgage is relatively high. Does anyone have sort of a spreadsheet they use (during normal times) that is average nights occupancy they get monthly? Trying to see what the reality is to cover this mortgage in the short term… and start to make some money in the longer term.
If anyone has any financial tips for a newbie who bought just prior to the pandemic and could use some help/advice that would be great. Thanks so much in advance.
UK host here with some knowledge of the London market. In order to help you though, you really gotta be a bit more specific in your question. I would suggest that ‘covering the mortgage’ is not a legitimate aim. Instead I would aim for specific numbers like 70% occupancy at £100 a night average (based on competition analysis) or something like that.
Another thing, already mentioned, that you really need to be cautious about is the 90 day rule. If the basement can be converted into an ‘entire home’, I wouldn’t think it’s worth renting it out for only 90 out of 365 days. That’s an occupancy of less than 25%. The pricing would need to be astronomical to make it worthwhile. Difficult but not impossible. Being in Fulham you could of course target the place for things like Wimbledon and other major entertainment and sporting events. I would assume that an entire basement home that is available on short notice - even if its very expensive - could be attractive to high end visitors.
If, however, you are planning to live with your guests as a live-in host, I don’t believe that the 90 day rule applies. Your pricing would be A LOT cheaper, especially during COVID times etc. Very few people wish to share living spaces these days. Your pricing would need to reflect that.
At the moment your question is too vague to provide any meaningful support.
Sorry to say this but I’d never be inclined to take serious financial advice from people on a discussion forum. (Although you know that I love you all. )
If possible don’t make Airbnb income part of your essential monthly budget. Make it part of your discretionary spending. We initially budgeted for a specific number of nights of occupancy, but earmarked that money for our leisure activities, optional purchases, etc that we could curtail when reservations shrunk. You never know when rules, regulations and pandemics will put you out of business. Alternatively have a Plan B that you can roll out quickly, such as switching to long term rental if the short term rental market takes a hit.