Is Airbnb a good investment?
Ever thought about listing your property on Airbnb? Whether you have multiple properties to rent out, or you’re thinking of acquiring a new listing, there are many appeals for becoming an Airbnb host.
Some of the immediate benefits are clear – having an investment property is highly profitable and can provide a fair amount of passive income. However, does that make Airbnb a good investment, especially compared to the profit you’d receive from a standard letting?
How does Airbnb investment work?
To own an Airbnb investment, all you have to do is rent your property out on a property hosting platform – whether that’s Airbnb directly, or a property management service, like SevenLiving, who manage your Airbnb listing for you.
The majority of rental stays are short term, and you will most likely host many guests throughout the year. However, there is also an option to provide long stays on your Airbnb, which is where you can host your Airbnb tenants for a month or longer.
Is Airbnb hosting more profitable than standard letting?
The profitability of your rental property can depend on various factors – for instance, amenities, size and location of property all play an important role in whether your rental has appeal. The biggest appeal of using a platform such as Airbnb is that you can rent a property anywhere – whether a person desires a retreat in the countryside or the buzz of the big city, they can find such thrills on Airbnb!
Usually, Airbnb hosting is generally a more lucrative business than standard letting – especially in the short term. This is because you are able to charge more on a nightly basis than you would a long-term tenancy. You can also use dynamic pricing to increase prices based on demand, or events happening in your local area, like the global sporting event being hosted in Birmingham in 2022. However, with short-term renting, your income is likely to be more uncertain. It isn’t recommended to have Airbnb hosting as your sole source of income if you own a second property or properties, as another factor to consider is needing to maximise the occupancy rate in order to fulfil the profit potential.
Long term renting often allows you to have guaranteed rent coming in each month from tenants, but in the long run you may be able to make more money short term letting if the prices are set right, and strong guest ratings and reviews are built up over time. On average, short-term letting can earn you around 50% more than long term letting if done right.
Pros of owning an Airbnb property:
- Less reliance on long-term tenants
- Advertising is easier, meaning it’s easier to find guests
- Higher profits
- Ability to increase prices based on local and seasonal demand
Where is the best location to have an Airbnb property?
In the UK, the Airbnb hotspots tend to be in and around city centres, such as London – this includes commutable areas, for example, Kent, East Sussex, Surrey, Berkshire, Buckinghamshire, Hertfordshire and Essex. Properties on the coast are also a good investment due to holidaymakers and tourists (especially during periods where international travel is restricted!)
Many people use Airbnb for business as well as leisure – so, if you are looking for a prime location to purchase your rental, you can browse local listings to roughly estimate the amount of money your Airbnb could make.
How much does the average Airbnb host make per month?
How much an Airbnb property can make per month mainly depends on location and occupancy – one study suggests that those with homes in London can expect to make on average around £1011 per month, whereas other locations average around £700 per month. It should be noted that the amount you earn mainly depends on your occupancy rate.
What percentage does Airbnb take?
Airbnb charge most hosts a flat service fee of 3% of the booking subtotal – which is a small amount of the profit you could potentially make. This subtotal is made up of the property’s nightly rate plus your cleaning fee and additional guest fee, if applicable.
How can SevenLiving help you make a living?
Interested in hosting your property on Airbnb, but worried you may not have the time to manage it? That’s where we can help.
Here at SevenLiving, we can make your Airbnb hosting experience hassle-free. Our property management services take care of all the admin for you – all you have to do is reap the rewards of your Airbnb income without any added stress. We deal with all enquiries, save you time and manage all your short-term rental properties from application to completion. We help with aspects such as 24-hour check-in and providing a 100% turn-key experience. Our services also include hotel-level cleaning and changeover between guests, while also taking care of the whole maintenance for your property. If you are interested in our Airbnb management services, enquire online to find out more. Our helpful team are always here to help you with any Airbnb hosting queries you may have.