Does anyone run and Airbnb?

[KnotsontheHighStreet]

And if so do you have any advice on pros and cons?

We are in a position where we need to invest come capital. A buy to let is one option but I'm wary of the pitfalls.

In my village there are 2 new Airbnbs that are doing really well.
I'd not compete with them, but would look within a radius.
We are semi-rural near a popular airport and also 30 mins by train from major city which people like to visit.
There is also a shortage of medium price hotels.

Do you need permission from the local council to run a property as holiday accommodation?

Is there likely to be a clause in the house deeds forbidding its use as a business? (As there is with our current home.) Would renting it out be classed as running a business from it?

I've only just started to consider this and would like some experiences.

run AN Airbnb of course :)

Lots of info online - there should be quite a few threads about it on here.

Tax breaks are very favourable for holiday lets.

We did Airbnb for a while with an empty London flat - it was lucrative and we had nice guests on the whole. The endless washing/cleaning was quite a lot of effort and we found we needed a good budget to replace towels/sheets regularly.

Look at your local council to see if they regulate holiday lets.

You will need to check individual leases/covenants to look at whether or not you can run a holiday let from a property.

We have let our own home as an Airbnb but don't have an Airbnb as a business investment.

The practical side of getting bookings, running our Airbnb account, dealing with customers was very easy. We only had two people who left the place dirty and even then it was just more cleaning than usual not anything actually broken.

In my experience of Airbnb as a renter and user I think places that are homes - which is in the spirit of Airbnb- get treated with more respect than something that is obviously just a business.

There are loads of holiday let companies who can do the management for you and value the property even before you make the offer so you can get an idea of its turnover and running costs. If it is purely an investment property I would speak to one of them as well as looking at Airbnb.

I had a property valued by Sykes and they said they aim for 6-7% return per annum on purchase price.

Is there likely to be a clause in the house deeds forbidding its use as a business? (As there is with our current home.) Would renting it out be classed as running a business from it?

Of course running an Airbnb would be classed as a business.

@NavigatingAdolescence

Is there likely to be a clause in the house deeds forbidding its use as a business? (As there is with our current home.) Would renting it out be classed as running a business from it?

Of course running an Airbnb would be classed as a business.

@NavigatingAdolescence I think there is a subtle difference between using your residence (main home) as a hairdressing business (for example) where clients come and go and owning a property which is run as a business. I'm not asking it Airbnb is a business per se.

My current home (deeds) say I can't run a business from it, but I am allowed to use a room in it for admin work connected with my business as long as the room is not solely for that purpose (that also impacts on capital gains tax) and I don't have clients turning up and holding meetings etc here.

Thanks @Nightmanagerfan and @IamwhoIsayIam.
Helpful.

An Airbnb is likely to be quite disruptive for neighbours. Whichever way you look at it it’s a business in which the public have access to the property. Completely different to an admin based business run from home.

@NavigatingAdolescence
I'm interested in why you say it would be disruptive to neighbours? I live next door and opposite an Airbnb and it doesn't affect me or my home at all?

Some flats say no short term let's in the head lease. If it's a freehold house I doubt they'd have that (unless in a covenant from a builder of relatively new). But my friend has such a restriction on her house and she does holiday lets there without issue.

You say you need to invest capital - do you mean that you would be a cash purchaser so don’t need a mortgage ?

Because If you do need a mortgage, remember that interest rates are higher. Remember to factor in insurance, business rates, managing agent fees and cleaning costs.

You will need a high standard of furnishings and fittings and they need to be replaced more often in serviced accommodation than in rented property.

[quote IamwhoIsayIam]@NavigatingAdolescence
I'm interested in why you say it would be disruptive to neighbours? I live next door and opposite an Airbnb and it doesn't affect me or my home at all?[/quote]
Depends on the set up.

My parents had a situation where someone wanted to buy the flat under their home (seafront property in popular area) to use as Airbnb. Luckily my parents hold the freehold and could prevent it. Downstairs property had no rights over the front garden or drive. Potential buyer lived 300 miles away. Had it been allowed how often do you think my parents would have had to explain that no, renters couldn’t use the drive, or have a BBQ in the garden, or borrow the patio furniture.

In the end my parents bought the property and have run it as a holiday let. The renters are vetted very carefully to minimise potential parties etc and they can make sure renters know what is and isn’t for their use. (They have rented it out permanently now for other reasons.)

They can be disruptive depending on the location and the type of people it attracts. One of DH’s best friends lives in a popular buzzy city and the flat next door to them was sold and turned into an Airbnb a few years ago.

Luckily they are pretty laid back couple with no children but the guests are on holiday after all and there’s often parties (or at the very least, music) and lots of drinking and talking on the balcony until the early hours, guests come home drunk and make noise in the corridor, parking in the wrong places, dumping rubbish or bins in the wrong place, etc.

It is essentially living next door to people who are on holiday constantly and they can come home drunk on a Wednesday evening and keep the party going, good for them but not so much fun for the regular people around them.

Not to say all Airbnbs are disruptive or even that all neighbours would mind but it’s something to keep in mind, I guess. Our friends have just sold their flat for unrelated reasons and who knows if the new people will be so keen on the situation!

@NavigatingAdolescence

An Airbnb is likely to be quite disruptive for neighbours. Whichever way you look at it it’s a business in which the public have access to the property. Completely different to an admin based business run from home.

Yes, I know that. The point is the difference between one type of business where you , the owner is resident full time, and owning a house which is rented out. (Respectfully, I think you aren't aware of the point I'm making.)

@IND1A

You say you need to invest capital - do you mean that you would be a cash purchaser so don’t need a mortgage ?

Because If you do need a mortgage, remember that interest rates are higher. Remember to factor in insurance, business rates, managing agent fees and cleaning costs.

You will need a high standard of furnishings and fittings and they need to be replaced more often in serviced accommodation than in rented property.

Cash purchaser.

It won't be a flat. It would be a house, in a rural-ish area.
It will be mortgage free.

I've looked into returns on investments etc before and we have dabbled with the idea of a holiday home (rented out) or renting a property out as landlords, but know friends who have had a lot of issues with tenants. So the idea of an Airbnb was something we're thinking about as the income can be quite good, although there is the downside of more cleaning/ bedding/ wear and tear, compared with a leasing a property.

You will get a far better return on a holiday let, particularly if you live in an area with year round appeal and can let in the shoulder seasons.

Agree with the point on decor and furnishings. People have a really high expectation of how their holiday home will look now. It's not just a base for days out, it is an experience in itself, so they want to be at least as good if not better than their own home.

Think about 'instagrammable' features that people can snap themselves in front of to say 'look how cool my holiday cottage is'.
Competition in popular areas is fierce and you need to stand out in pictures as people spend aaaaages browsing holiday lets.

We currently run 2, alongside full time jobs, but have decided to call it a day after this season. It started as a fun mission to try and make £1000 to pay a holiday balance - it's escalated and is becoming a proper business and that's not what we really want right now.

The money is fantastic - we can consistently make £200 a day, but it only takes a couple of poor guest experiences to make you lose your nerve, unfortunately. We're selling one property and the other space is in the family home and will turn back into our own guest suite. I might even move in now it's all kitted out.

We realised we weren't only letting out the rooms but also losing use of the driveway space, garden access, use of adjoining rooms to keep noise down etc. Not to mention the admin, waiting around for late guests and dealing with flakey people. One recent guest texted me at 10pm on a Friday night to request fresh mugs.

Everyone I know who's done it has given up after a final straw story. My neighbours were called in the middle of the night when their guests couldn't flush the loo they'd blocked..