Airbnb rentals are rising, especially before this pandemic, when there were no travel restrictions yet. But some countries are already starting to open up their borders, allowing entries to tourists and travelers. As soon as tourism reverts, Airbnb will also regain its place as one of the options for short-term property rentals. Airbnb rentals serve as a substitute for hotels. Many prefer Airbnb accommodation because of its homey feel, living in a place away from home.
Others may think that starting an Airbnb rental is an easy feat. Or it can be if you are renting a few rooms. However, if you are serious about earning and even make Airbnb a full-time business, you have a lot to consider. All your actions will translate to sales or expenses, which makes it necessary to assess the financial feasibility of your proposed Airbnb business.
We will discuss below the significant factors to consider when starting your Airbnb business.
Finding a Suitable Location
Location is one of the primary considerations when starting an Airbnb rental. Buying properties in a touristy area with a lot to offer in the surrounding places will give you an advantage and increase the occupancy rate for your properties. Find a city with an influx of tourists and make sure that it is situated in a good neighborhood. Also, consider the available rental spaces in the area and how you can compete with them.
Selecting a property
The property would depend on what you have in mind as rental spaces. Would you be offering a room or a whole house? Find what fits your budget, but at the same time, can provide an attractive return. You may need to hire an experienced real estate agent to guide you along the process. It will eliminate unnecessary mistakes, especially if you are new to real estate investing.
Renovations and Improvements
You may still need to renovate or improve some parts of the property to suit the vibe you want for your Airbnb rentals. Prepare the basic furnishings such as beddings, bedside tables, chairs, kitchen utensils, and even a laundry service.
Setting the Rental Rates for your Airbnb
Rentals may vary according to the furnishings available in the room or house, the time of check-in, day of the week, and season of the year. As possible, offer various options for your customers to accommodate solo travelers, couples, groups of friends, or family. You can also offer off-season discount rates to help boost your revenue in this lean season.
Listing your Property in Airbnb
Once you set up everything, you can now create an Airbnb listing. Ensure that you have an appealing profile, excellent images, and exude the feel they will have when they stay in your place. Follow all rules set by the platform to avoid compliance issues. Promote your place on different social media platforms and other marketing channels to reach your target customers.
Hiring a Property Manager
Running an Airbnb rental will require a lot of your time. To assure that you can always provide excellent customer service to your customers, hiring a property manager can be an option. With a property manager running the place, you can use your time to improve your business and be more profitable in the coming years.
Identifying Operating Expenses and Keeping them in Control
The day-to-day operation will require cleaning services, supplies, consumables such as coffee, soap, shampoo, toothbrush, etc., and utilities. Keep them always in check to ensure that they are within the healthy ratio of your revenue.
Assessing the Financial Feasibility of your Airbnb Rentals
After identifying all the significant considerations presented above, you can now assess how they will translate to the financial viability of your property rental.
Airbnb financial model templates are available online and include key metrics when assessing your business. It will provide an analysis and metrics of your projected business financials, allowing you to improve processes and strategies to boost revenues and cut costs. You can visit eFinancialModels for their templates for Airbnb financial models prepared by industry experts.