In recent years Airbnb has presented a new income stream to many property owners, could it be for you? Find out more.
In recent years, Airbnb has presented a new income stream to many property owners and can be a very profitable venture for those who own a period home, city dwelling or unusual place to stay. Airbnb launched in 2008 and offered up the ability for homeowners to list their properties for homestay vacations for others from all around the world. In the first few years of the site’s operation we saw those who owned and/or managed more than one property let out their second or third, but now there is an increasing trend of homeowners turning their primary residence into an Airbnb rental. Those with large homes let out spare rooms or those who don’t stay at home often rent the entire house and instead stay elsewhere during it. With 6 million listings all over the world now on the site, it’s clear that more people than ever are seeing the financial benefits of getting involved.
But turning your main or first home into an Airbnb can be a daunting prospect, and there’s lots to consider before you take the plunge. We always recommend thinking through the following first – and then making an informed decision on how and when to let your property out.
When using Airbnb or a similar short-term rental facility to let out a property other than the one you usually live in, you can market the rental heavily and ensure it is booked up as much as possible to bring in income. However, if you’re letting out your primary residence, you’re less likely to be losing money while the property isn’t being let out to others. The need between relying on the income and needing to leave the home must be balanced against staying home and not allowing it to have a vast financial impact. It is mainly for this reason that if Airbnb users need the rental income from their properties, they don’t let out their main home.
Although you don’t have to remove all of your personal items, it may not be appropriate to keep photos and/or other things out on display when someone else is living in the house. Most Airbnb hosts either take a minimalist approach to interior design or pack away their personal belongings in boxes and cupboards before leaving. The latter is time-consuming but can be necessary in protecting valuables. If you don’t have somewhere safe to lock articles away at home, you’ll need to invest in a storage unit – and the cost of this should be factored into the rental prices.
Tax laws vary between countries and territories, but in the UK, many Airbnb hosts are entitled to a tax-free allowance for certain related purchases. If your property meets the criteria to legally qualify as a ‘Furnished Holiday Let’, the cost of fixtures and fittings can be claimed back.
Tax-free allowances aside, if you earn over a set amount each year from your Airbnb listing, you’ll need to register for VAT. This will increase your costs and so likely will require you to increase your property’s rental rates to continue to make a profit.
The rules on holiday lets vary from place to place, but some small towns and villages don’t allow for properties in their area to be let out on Airbnb. Similarly, Airbnb themselves have set some rules including that no property in the Greater London area can be let out on the site for more than 90-days/nights a year. It is critical, therefore, that you read through and understand any relevant regulations or restrictions before you list your property – as in some cases, homeowners will not find Airbnb to be the right listings provider for them.
Guests are usually supplied with the phone number of their Airbnb host so that should something go wrong with the property, they’re able to notify them. What’s more, clean sheets, fresh towels and a spotless property will need to greet each new batch of guests when they arrive – no matter what time of the day or night that may be. Although hosts do not necessarily ever need to meet their guests face-to-face, if they’re not able to be committed to being available or at least contactable in the case of an emergency, it’s advised to hire a specialist Airbnb management agency.
Not all Airbnb rentals are empty – many are just a spare room or space in an already occupied property. It must be made clear on the listing whether the host will be in the house when guests are, and this will affect the rental price. Staying home and meeting guests is great for those who wish to meet new and interesting people but may not suit those who prefer their home life to stay quiet, relaxing and alone. If children live in the home, inviting guests in at all (whether or not they are home throughout their stay) should be heavily considered for security purposes.
While wackily-decorated homes often do well on Airbnb, for the most part, neutrally decorated houses are most likely to photograph well and be popular with those looking for somewhere to stay. What’s more, soft furnishings that are prone or staining or that need regular deep cleaning may not be suitable for a high turnover of guests. Décor and design choices will often need to cater for those choosing to book and stay in the property, rather than those who live within it.
Letting out a home on Airbnb can be hugely profitable but must be carefully considered and curated first. Where will you begin?
Renovating your place to become an Airbnb? Why not get in touch to have a chat with our renovation specialists who can talk through your options with you.
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If you would like to find out how Refresh Renovations can support you with a high quality, efficient home renovation, get in touch today. Your local Refresh consultant will be happy to meet with you for a free, no obligations consultation.