Airbnb/SA
CALCULATOR
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Estimate monthly profit
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Number of days to cover the monthly expenses
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Number of months to cove initial investment
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Annual profits
Airbnb Calculator, the strategy everything you need to know to get started and make a serious cash flow!
What is it?
This is a strategy that is also referred to as serviced accommodation or short stay lets. This property money making strategy relies on property or a room in a property being rented on a daily basis/short stay.
In this situation the people who stay are guest and not tenants.
Usually, breakfast is provided, the property is well furnished and has cooking utensils, toilet paper, bathing and washing soaps and other sundries.
Features
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Potential profit may be 3+ times more than a normal rental property
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Could be time-consuming
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Could lead to stress (Bad guests that throw parties and trash the place)
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May not be as profitable in some locations
What is the step-by-step process?
STEP 1.
Research- Before committing to anything we need to research. The first thing would be finding out how much our room or property could rent for on a daily basis, the demand and what is the average occupancy per month for the area where our room or property is.
This can be done very easily using airbnb's tool called airdna.
This website has a lot of information and plans are currently not free, but you can find all the information you need to get started there.
Other factors to consider is the management, the cleaning and supplies, maintenance and repairs and booking. If you are not going to do all these yourself then you need to find reputable service providers covering that area that could help you with that.
Another thing to consider is whether this business will be run as a sole trader or if you would register a limited company.
Just because everyone's circumstances are different, to get advice please speak to an accountant.
I personally would prefer setting up a business like this in a limited company (£12 to register a limited company) just so it is a separate legal entity from me and my personal life.
Estimating the profitability-- Just as any property has expenses, so will an airbnb/serviced accommodation. It is very important to do the numbers and estimate as close as possible what the expenses and the monthly profit would be. In the airbnb calculator below I have included all the most common expenses.
To use the airbnb calculator below for your research fill in the fields and click update.
STEP 2.
Once the research is complete, and you have decided on the particular area with the highest daily rates and monthly occupancy, then if we do not have a property we own in that area, we need to secure one.
In this situation I could either buy one or lease a property from a landlord on a monthly rental contract with a 3 months break clause and rent it out to airbnb guests on a daily basis.
If things do not go as planned within 3 months then I could give the property back to the landlord and walk away.
STEP 3.
Once the research is done and the property is secured then you need to find guests to use your airbnb/serviced accommodation and pay you so that you could start making the money.
I would start advertising a property/room for rent at least a month in advance and put the availability date from when I would start accepting bookings.
The easiest way to find guests is via airbnb and booking.com.
There are many other websites you could use. Some people also use facebook, instagram or their own website if they have one.
STEP 4.
Securing your investment- If you have had some experience with airbnb or serviced accommodation then you know that some time things do not go according to plan and some guests are not well behaved. With experience people tend to know or get a vibe of the guest they would not want to have in their property or room.
Some accommodation owners ask for security cash deposits of a few hundred £££ just in case the guest damages something due to a party being held or something similar.
It is for you to decide what you prefer but securing your investment ifs a vital step.
STEP5.
Compliance- When running a serviced accommodation or an airbnb business, make sure you stay compliant and follow the rules and regulations all the time. Especially now that there is an outbreak of the virus you need to safeguard your self and your team.
This was the short version of how to airbnb/ serviced accommodation.
For further questions you can contact me via HERE.
