Running an Airbnb property is it worth trying?

[Fox111]

I have a question to anyone who has some experience in running an airbnb property.

I have purchased a house next door as a buy to let property.
The rental rate would be around £1600-£1800 for the house. However judging by the airbnb rates there are £160-£200 per night for the similar properties.

My question is: how can you predict the occupancy rate? Is it worth extra investment into furniture and decoration?

I think that’s really hard to answer because it depends on the area and how much choice there is locally. Also if it’s next door do you really want to live next door to people having regular parties?

You can look at the advance bookings calendar on other similar listings to get an idea of how many days per month for each month are booked.

Don't forget to do a business plan and forecasts of all the other costs you're going to incur by running a holiday let rather than a residential letting, i.e. contents insurance, electric & gas, business rates, water rates, landline and broadband, TV licence and Sky subscription, costs of furniture, fixtures and fittings, soft furnishings, fully equipped kitchen, cutlery & crockery and utensils, cleaning between guests (time and consumables), welcome packs, gardening, general property wear & tear and upkeep (holiday lets need regular maintenance, decoration etc), plus the Air BNB fees, bank charges for card processing, etc etc.

I suggest you join the Airbnb VRBO Booking group on Facebook and read through some of the issues on there. I know people only really post negative experiences but it makes you think if you are the kind of person who can handle it when you get horrendous guests.

I holiday let a house via Airbnb in a location that's popular for holidays. Before we set it up we asked a couple of holiday cottage companies to quote for managing it and asked them to estimate the income and occupancy levels. We ended up managing it ourselves but it's quite a lot of work - probably around 10 hours/week which we do on top of working full-time.

Thank you @WaitingForSunnyDays I will have a close look at the Facebook group.
@SendMeHomeNow Yes constant parties is a huge downside.

Have you ever analyzed the airbnb vs normal let. Does it make a big financial sense in getting into it?
I have a number of normal rental properties so have a good experience in running a rental property but not airbnb.

Holiday letting is a completely different prospect from longer term rental. I have 4 holiday lets and the cleaning, laundry, repairs and maintenance and responding to guests is very time consuming - even with an agent. It’s expensive as well - energy costs, cleaning and laundry costs have gone through the roof. Some guests are awful and getting any £££ for significant damages is difficult. Booking your own holidays is difficult because you need to be around for any issues - and they can be quite intrusive - for example Christmas and New Years Eve and guests want them dealt with immediately.

Booking levels were down recently so I’m changing three back to long term rentals but keeping the smaller one that is next door to me as an Airbnb and is easier to manage and turns a much better rate of profit.

I’ve never had any parties at the place I let through Airbnb 😂 Even with the larger units, I’ve had one complaint from the neighbours about a party in 8 years 🤷‍♀️

Thank you @TheOnlyAletheia
I think I will stay with the normal rental.

@Fox111 the income we make from holiday letting far outstrips what we would make from a residential let. We can't afford to let it as a residential let. It would be tar less work though.

Watch out as some councils are imposing minimum number of days let periods in a year without which the council tax rates are doubled. I know in Wales they are seen as fairly impossible unless you have an extremely attractive property that lets all year around as an Air B&B

The market is oversaturated at the moment.
Check out the number available in your area first. Look at availability and price.

We changed our business model to air BA and b we are making double what we took in letting it. The government has made it impossible to continue with rentals and getting worse give it a go why not ? It’s a ball ache to get set up but then it’s ok I do the changeovers with a daily and it’s better than expected. I’ve got three then I’m helping friends do theirs

You would need to factor in your time, insurance as well as replacing broken and stolen items as well as figure out what occupancy you need for this all to be viable. Personally I don't think I would bother unless I had a very high end property going spare, but if I did, I wouldn't need the money

We rent out a small studio space via air bnb which is small but easy to clean. No air BnB fees as the guest pays those. For us, we make double than if it was a long term let. Have had some guests who are a bit demanding but in general - no issues.
If you have an awful long term tenant that can be bad - at least with air BnB anyone who is tricky won't be staying long!

Hi @Indiaplain do you mind if I pm you as I am currently exploring the option of letting an annexe/studio and want to know how to work out if it’s actually worth it. Thank you!

Have a look at AIRDNA, join for one month which I think is the minimum and it will analyse the potential and occupancy for your proposed property.

Try to contact another Airbnb owner and ask them their occupancy rate if they will tell?

I’d say it depends on the area, what’s there, what else is available, and the standard of the house. It’s impossible to say without local comparisons.

I work for a business which has both residential rental properties and a couple of holiday lets. The holiday let’s definitely have higher turnover, but there is a lot more work required and much higher costs. The houses have to be up to standard, if the cleaner calls in sick that morning then the owner has to either find a new cleaner with zero notice or do it themselves. Or have a company manage the whole thing and pay them a big percentage. Furniture, bedding, appliances etc have to be nice and regularly checked and updated. The other week guests locked themselves out at 11pm on a Friday night so the owner had to go and let them back in. Some guests are horrible, trash the place and leave awful reviews. (To be fair most are nice)

So yes overall more income generally, but a lot more work required!