maximising profit Archives

Transforming Your Home into a Profitable Rental

Posted on 18 October 2023 - 12:03 pm

Interested in turning your house into an Airbnb rental? Homeowners opt for this route for various reasons. For instance, when their children move out, they often find themselves with a spacious house and several unused rooms. Alternatively, some individuals own apartments they rarely occupy due to frequent work-related travel or extended stays at their partner’s place.

What’s certain is that there’s ample profit to be gained by participating in the sharing economy. With over 6 million listings worldwide, Airbnb spans major cities such as London, Paris, Dubai, and Kuala Lumpur. Homeowners of all ages recognize the financial benefits of listing spare rooms or renting out their entire space while they embark on vacation.

Before transforming your primary residence into an Airbnb for additional rental income, it’s essential to consider the potential advantages and disadvantages that can impact your daily life. In this guide, we’ll walk you through the intricacies of renting out your primary residence on Airbnb.

Pro: Reduced Booking Pressure

Renting out your primary residence comes with the advantage of experiencing less pressure to secure bookings. In many instances, the absence of guests in your spare room doesn’t result in financial losses. Unlike investment properties that can suffer when vacant, the occasional unbooked weeks in your short-term rental are far less financially burdensome. Moreover, if you’re looking to earn extra income while you’re away for a month by listing your place on Airbnb, the absence of renters during that period isn’t a catastrophic setback.

Con: Necessity to Remove Personal Belongings

Consider Emily, a frequent traveler for work, who routinely rents out her primary residence on Airbnb during her three-week overseas trips. Each time she prepares her home for Airbnb guests, she undergoes the laborious process of removing her personal belongings and securely storing them in safes and cupboards.

This task can be quite unenjoyable for Airbnb hosts, as it requires considerable time and effort. Consequently, many hosts opt to keep their living spaces devoid of personal items. However, this approach can make it feel like you’re residing in someone else’s home, making it challenging to strike a balance between enjoying your own space and safeguarding your valuables.

Pro: Tax-Free Allowances

It’s crucial to engage in discussions with your accountant or tax advisor before embarking on the journey of renting out your home on Airbnb, as tax laws vary significantly from one country to another. In the UK, for instance, homeowners who rent out a room within their primary residence may be eligible for a tax-free allowance. Moreover, if your property qualifies as a Furnished Holiday Let in the UK, you can take advantage of claiming expenses related to fixtures and furniture during tax season.

Con: Registering for VAT

In the event that your Airbnb rental of your primary residence becomes highly lucrative and generates a substantial income, residents in the UK might find themselves obligated to register for VAT. This, in turn, could lead to bearing additional costs personally or necessitate an increase in your nightly rental rates. Furthermore, property owners in London should be mindful of the 90-day rule, which has the potential to impose limitations on their Airbnb earnings.

Pro: Hosting Fascinating Travelers

Airbnb draws in travelers from every corner of the world, offering a delightful opportunity to connect with individuals from diverse cultures. It serves as a wonderful avenue for sharing valuable insights about your neighborhood, ensuring that guests make the most of their stay. Whether it’s recommending your favorite wine bar or suggesting the best spots for kids to play, you become a local guide. Welcoming guests into your family home can even lead to the development of enduring friendships.

Con: Constant Availability for Guests

One of the drawbacks of converting your primary residence into an Airbnb is the potential transformation of your tranquil family abode into a working space. Welcoming new guests often entails providing clean sheets, fresh towels, a warm reception, and possibly even a welcome gift.

As an Airbnb host, you must be ready to manage it as a business, which includes responding to emails round the clock, assisting guests who may have lost their keys, and handling various other concerns. This continuous involvement can significantly affect your overall enjoyment of your home.

Pro: Generating a Reliable Passive Income

Having an apartment or family home in a sought-after location presents an opportunity to earn substantial income by listing it on Airbnb. Some individuals are able to finance their own travels by renting out their property on the platform while they are away. If you are unfazed by the constant influx of new guests, Airbnb can become the passive income stream you’ve been envisioning. After all, the space is available, so why not capitalize on it?

Con: Decorating Dilemmas

One crucial consideration is how you want your property to be perceived on Airbnb. Attracting guests involves more than just listing a spare room; interior design and decor play a significant role. Colors you might prefer for your family home’s walls may not be appealing to potential guests.

Similarly, a sofa that you personally find exceedingly comfortable might be prone to staining, making it a less than ideal choice for an Airbnb property. If your aim is to maximize earnings through Airbnb, your decor choices should cater to travelers rather than solely reflecting your personal tastes.

Unlock the potential of making money from your primary residence on Airbnb, all while bypassing the challenges of guest relations and marketing. Keey, a seasoned Airbnb management company, boasts a team of skilled professionals dedicated to transforming your home into a thriving holiday rental.

Discover the breadth of our services or engage in a conversation with one of our hosting experts today to explore the possibilities.

Are Business or Leisure Guests More Profitable For My Airbnb?

Posted on 21 June 2021 - 1:30 pm

When setting up your Airbnb or short-term rental, you want an idea of what kind of guests to expect.

While there’s a lot of different types of guests, like: families, workers, pets and couples, they can be loosely fitted into these two categories: business guests and leisure guests.

So, which one is more profitable and why?

Let’s take a look at the differences between them:

Your Business Guests

Traditionally, business guests would opt for a hotel, however, as Airbnb and short-term rentals are becoming increasingly popular, workers are beginning to look at the advantages that Airbnb has to offer compared to a hotel.

Your Location

Business guests will rent primarily because of work commitments. They most likely will have booked your accommodation based on its location. They are quite possibly looking for a space close to their meetings, events and other work-related appointments.

If you’re in a good central location, perhaps in a city, then be sure to know that your listing should be a great hit for business travelers.

Your location alone can determine your nightly price. Be competitive and look around your area when conducting your pricing strategy, don’t forget to add hotel prices into the equation too.

location map — Business guests tend to choose AirBnB’s based on proximity to work!

Booking Loyalty

If your guest enjoys their stay with you, they are more likely to book again if they travel a lot for work and don’t always have time to shop around for a new place to stay.

Business guests usually tend to stay with the same accommodation time after time if it suits their need and meets their expectations. Whereas, leisure guests often have the extra time to look for alternative accommodation for their next stay.

Hosting a positive stay for your business guest will benefit you in the long-term as you’ll have encouraged repeat business for your listing.

All Inclusive

Business travelers don’t necessarily have time to factor in making their own lunch or buying their own supplies from the supermarket. They want a hassle free and easy solution such as an all-inclusive breakfast, coffee dispenser and fully functional amenities like an iron and an ironing board.

When making your Airbnb all-inclusive, you can charge extra on top as an additional service for your business guests.

You can offer services such as, minibar and refills, laundry services, airport drop off and pick up services, cooked meals as well as coupons for food delivery services.

Find out more on what amenities you should include in your guests stay.

woman carrying a suitcase and talking on the phone — Business guests want efficiency – all-inclusive offers will save them time.

Your Leisure Guests

Budget conscious

Unlike business guests, leisure guests seem to have a lot more time to find the best deal and location for their budget.

Business guests tend to spend more money on their stay to avoid hassle, whereas, leisure guests typically want to spend less money on their stay.

Your bookings ultimately depend on the pricing of your Airbnb but will be the first thing leisure guests look at. To attract leisure guests, you first have to have competitive pricing.

Take a look at our article to find out more about creating the perfect pricing strategy for your Airbnb!

putting cash on a wallet — Leisure guests are often looking for the best deal.

Longer stays

Leisure guests are less time restricted and often are booking to stay with you at their own leisure whether that be a long weekend away or over whole week’s holiday.

Business guests can be assumed to be corporate-styled busy-bodies and aren’t in the area for a calm holiday. Usually, there’s a higher turnover rate and shorter stays for business guests due to work demands.

The longer your guests stay with you, the more income you will be receiving per stay.

small and big houses — Leisure guests tend to stay for longer than business guests.

Packages and Extras

Leisure guests will be hugely attracted to any packages and deals you have to offer, as they are likely visiting for the nearby attractions and ongoing events.

You should offer your packages and extras as an additional charge to your guests, however, as we said before, your leisure guests are more likely to be budget conscious, so be sure to offer them a great deal because chances are, they’ve already done a lot of research beforehand.

Reviews

Leisure guests seem to rely on recommendations and reviews for their booking choice and having bad reviews will affect your income ultimately. So, it’s important to offer your best to your guests and deal with negative reviews professionally.

Read our articles for more information on how to deal with negative reviews.

That being said, your leisure guests should hopefully be receiving the most out of their stay with you and therefore leading them to leave positive reviews and tell their friends and family, hopefully creating a better credibility for your listing, in turn, generating more profits.

woman giving reviews — Leisure guests often depend on positive reviews.

The Verdict

Your business guests are likely to spend freely by adding on extra services for their stay. If your stay meets their expectations for their work commitments, they are likely to stay again. The downside to Business guests is that they tend to stay for shorter periods of time, as well as, they’re less likely to leave a review for future guests to see.

On the other hand, if your listing offers the right location at the right price, your rental has a high potential to earn further with leisure guests by making money on top of tickets and discounts you can offer them. Not to mention, their likely to stay for longer and recommend your listing to further audiences.

Both business and Leisure guests add high value to your listing’s earning potential, each for their own reasons. You may also have guests that float between these categories and the style of their stay isn’t always as rigid as mentioned above.

Becoming a flexible short-term rental would be best advised, so that you can be versatile with your types of guests and you can maximise your revenue.

Read now: How to Maximise your Profits on Airbnb

Unsure how to cater your space to different types of guests? Need professional understanding on how to help your short-term rental thrive? Speak to an advisor today at Keey.

How to Create the Perfect Pricing Strategy for Your Airbnb

Posted on 17 June 2021 - 1:00 pm

In order to have a successful Airbnb listing, you’ll need to have an effective pricing strategy in place.

By carefully planning your strategy, your Airbnb listing can bring in a higher income than ever before; allowing you to create suitable pricing that works best for you and your guests.

person managing his propertiea — Managing your property is a lot of work!

There’s a lot to take into consideration when creating the perfect pricing strategy for your property. Let’s take a look at what steps you need to take below:

#1 Understanding Your Finances

Starting an Airbnb or short-term rental may have just been a way for you to earn some extra money, or maybe you have monthly overheads on a property that need to be paid. Either way, you should treat your rental accommodation as a business – because it is.

In business, the worst thing that can happen is for you to be at a financial loss. You should work out your monthly and yearly costs for running your rental before estimating any prices for your listing. Take into consideration any costs for renovation and maintenance of your space, including your overheads too.

When you have worked out your overheads for the month or the year, work out your break-even point; where the cost of production (renovation, upkeep and bills) is even to the revenue (income).

It’s important that you work out how much you would need to receive per night or per rental to secure your finances. For example:

Your mortgage = £1,000 per month (12,000 per year)

Bills (water, gas, electric, council tax, internet etc.) = Approx. £400 per month (£4,800 per month)

Your renovation = £2,000

Total = £18,800

You will need to secure an income of £18,800 per year as a minimum to cover your costs for that year – this is your break-even point.

Next, divide your totaled yearly amount (£18,800) by how many nights/weeks/months you can rent your space out (example: 52 weeks) and that will help to give you your minimum price tag.

Example: £18,800 divided by 52 weeks = £346.15 per week.

With the example above, you would need to rent your space out for a minimum of £346.15 per week in order to hit your break-even point.

Business isn’t just about getting your money back; why put all that effort into something if you’re not going to maximise your income?

person using calculator — Before setting a price, calculate your costs and outgoings.

#2 Your Local Competition and Area

When putting together a successful pricing strategy, you’ll need to conduct some research of your own by analyzing the competition – other Airbnb’s in your area and general surroundings.

In order to understand the ideal pricing for your Airbnb, take a look at similar properties being offered on Airbnb and focus on your properties features. For example, if you have:

Four bedrooms
Two Bathrooms
A large garden

Then, you should take a look at which properties in your area offer similar amenities to get a good idea of what the standard prices are. Your prices will vary greatly depending on what your property has to offer a guest.

Try to find properties as similar to yours as possible, a shabby four-bedroom house will price differently to a four-bedroom boutique styled house even if they’re in the same area.

Consider your target guest too when looking at local listings, make sure to take into account who your competitors Airbnb cater for, as this will help you with your strategy.

For example, if you are a pet or disability friendly property, you should look to see if you have a unique listing in your area as that will allow you to increase your prices purely because you have less competition.

Unfortunately, if you skip this research stage and/or price your Airbnb too high considering the location, you could miss out on bookings and overall income. The same applies if you undervalue your Airbnb, your property is missing its true potential and your profits could suffer.

Checking your local competition is a must for success.

house location — Make sure you check out your competition – that way you can compare prices to help you get ahead!

#3 Fluctuate your Prices

To become a landlord with a good pricing strategy, you need to rent your space out at different prices throughout the year.

Based on your location and target audience, you will have specific peak seasons and days. For example, if your Airbnb was located in Snowden, Wales or London, England – your peak times would vary slightly from each other.

If your peak seasons are: June, July and August, then this should be your most profitable time. However, in the months such as February, March and April, you may notice you don’t get many bookings or that your competitors have lowered their prices, you should lower your prices too, in order to remain competitive.

This rule applies for weekdays and weekends too, typically, weekdays are less likely to be booked out so, consider decreasing your prices to allow your listing to seem extra tempting to flexible bookers.

Be sure to keep in mind, public holidays, school holidays and special events in your area; you could potentially charge more for these specific dates. Be on top of when and why guests are looking for accommodation in your area.

person analyzing diagrams — Varying your prices to match fluctuations throughout the year can help you maintain competition.

#4 Offer Extra Services

You should offer guests a great stay and go above and beyond their expectations, but at what cost? Sometimes, you should charge extra on top for additional services.

Your guests will likely be happy to pay for additional services if it’s of good value to them. They may need an extra bed, or an extra person added to their booking; you should charge a small fairly priced fee.

However, if you are hiring professional cleaners, or restocking toiletries before their stay, you should ensure that the price is covered in the rental price, not as an extra charge.

Not charging for additional services is one of the ways that landlords can lose potential income on their rental.

Be strategic with your costs and allow your guests to feel that they are receiving what they initially paid for, if they want extra services – they should expect to pay an extra fee. Make sure to be fair with your extra costs.

Read now: 7 Ways to Make More Money on Your Airbnb

#5 Discounts for longer stays

When hosting on Airbnb, the platform is primarily used for short-term rentals, however, it works well for longer rentals too. Having longer rentals means that you don’t have to handle the changeover of guests, as well as, not having to pay for regular cleaning.

Your pricing strategy should reflect this. If your costs are reduced, it would be beneficial for you to reduce your price for lengthy stays.

By offering weekly and monthly discounts, you can attract longer term renters, helping you stay booked up for longer and more income, not to mention – it’ll be less hassle all around.

#6 Charge more for Short Stays

With short-term stays, they’re not always cost effective, particularly for only 1 or 2 nights. At your standard nightly rate, it wouldn’t make sense to host if your costs outweighed your revenue. You could be paying a lot for cleaning and managing your short-term guests booking.

Is it really worth it?

Two ways to avoid losing money and dealing with the inconvenience of short bookings is to:

Charge more per night

Set minimum stays (+/- 2 days)

Charge more per night

Increasing your prices for the first few nights for your short-stay guests will ensure that your costs have been met and the booking is worth your time. This strategy can also persuade guests to increase their duration for their stay and ultimately allow them to feel that they’re getting good value for their money.

Setting minimum stays

If there is an event near your rental space, such as, a festival, your Airbnb may only be rented out for 1 night. Loosing you a lot of potential income. By setting up minimum durations of how short a guest stays can be, may help you to stay booked for longer and ensure your income.

We recommend making your minimum stay a minimum of two nights, to keep your listing appealing.

woman carrying a suitcase — Encourage longer stays to make the most of your property.

#7 Use A Strategy Mastermind

When it comes to setting your prices, there’s a fine line between too much or too little on your price tag. How are you supposed to know whether or not you’re optimising your properties income? It can be really confusing and daunting when you’re not sure of what’s right or wrong.

Consider hiring a professional pricing strategist to get the most out of your rental. A lot of Airbnb hosts choose to seek help from a reliable rental management company to help create their perfect pricing strategy.

Read now: Benefits of Employing a Residential Management Company This Summer

Speak to one of our pricing strategy specialists here, at Keey. We help you ensure that you’re getting the best out of your property’s potential.

7 Ways to Make More Money on Your Airbnb

Posted on 10 June 2021 - 12:30 pm

You’ve already got your listing; you know you want to earn some money from it, whether that’s just to pay the mortgage and overheads, or just for a bit of extra cash – why not reach your properties full potential and make extra on top?

We’ve compiled a list of 7 different tips and tricks to help you can increase your income. Let’s check them out:

1. Can Your Airbnb Host More People?

You might be thinking “no, I can’t. I don’t have the space for it”.

Well, actually, if you have a sofa, then you most likely do. If you haven’t already, you should consider buying a sofa bed. If you can sleep more people; you can charge more too.

You might be against the idea of a sofa bed because you think they’re kind of uncomfortable, look ugly and more expensive for no reason – spoiler: they’re actually pretty great.

The main reason why hosts opt for a sofa bed is because it offers a temporary solution for sleeping space. If you already have a living room area, or a sofa in your rental place, then why not just add an extra “store away” bedroom?

A sofa bed adds an enourmous amount of value to your Airbnb and opens you up to flexible bookings and accommodating more people – ultimately, increasing your income.

Check out some of the great reasons why you should get a sofa bed for your Airbnb, here.

2. Consider Opening up to a Wider Guest Audience

You know your space better than anyone else does, so, do you accommodate families? Couples? Students? Remote workers? And/or children and pets?

You can make your Airbnb easily adaptable by adding some key features to your property to open up your space to a larger audience of guests.

Here’s some ideas to add to your space for accommodating a wider guest audience:

Consider a revamp of your Airbnb. Strip back and go more neutral. Your interior design can tell a potential guest a lot about your Airbnb. For more interior design advice, check this out.
Add a desk and chair for remote workers or students’ needs. You could add this to an empty corner of a bedroom or in the communal area of your rental. If you don’t have the space, then focus on making your dining room table as an alternative workspace.
Offer a crib for a family stay – the crib doesn’t need to be a permanent fixture; you can offer it on arrival or buy a foldable crib to stay in your spaces’ storage.
Invest in Zip and Link beds for the bedrooms. You can have king sized beds that can be unzipped into two single beds. Perfect for various guests sleeping requirements.
Adding secure fencing to your garden or outdoor space for pets.

These are just some of the smaller tweaks you can make to your Airbnb to appear more versatile to your audience.

3. Better Your Photography Game

Photography is the one of the most important marketing tools to increase your bookings.

According to Airbnb’s data, listings with professional photography tend to charge 26% extra per night as well as a get a 24% increase on bookings overall.

4. Offer Discounts and Great Deals!

A very good and eye-catching strategy for hosts is to offer discounts for longer stays.

For example, if your nightly price is around £150 per night, then you could consider offering money off when your guests’ book for 7 days or longer.

It’s important to work out your costs before offering any kind of discount to ensure you are still covering your overheads and making a profit.

Discounts will appeal massively to your guests, as they may have only wanted to stay for five or six nights, but have now decided to stay for seven nights because of the fabulous deal.

Overall, your guests will feel that they’re getting a great deal from you and in return, you’ve guaranteed your Airbnb will be rented out for longer. It’s a win-win situation!

discount symbol — Offering discounts for large packages can help your customers save money on some great amenities!

5. Consider Adding Extra Services

Don’t be shy about going the extra mile for your guests – especially when it benefits you too.

Offering guests local experiences or tickets at a special price could make you some extra cash on top. You could bulk buy tickets for local transportation or events and then sell them to your guests for cheaper than the regular asking price.

Not to mention, your guests will be happy that they’ve received a discount on a purchase they most likely would have made regardless of your extra services. If your guests are happy, your reviews will be too!

Here’s some additional services you can add to your guests’ stay:

Guided tours around your Airbnb’s location
Airport pick up and drop off
Tickets to local events
Public transportation offers
Extra luggage storage
Mini bar (drinks and snacks) on arrival
Car and bike hire

When a guest chooses to book with you or makes an enquiry about your Airbnb, be sure to mention your additional services and the advantages of booking these services through you – you should mention your unique discounts here.

Remember to always be honest about what your extra services are and the extra cost to your guest. You don’t want to run into any misunderstandings, ruining your reviews and overall scores!

6. Become a Super Host

Super Hosts are selected as the top-rated and most experienced hosts by Airbnb, so, it sounds obvious that you should become a Super Host.

But why? Because there are loads of benefits that Super Hosts receive, here:

You can earn extra money, because you’re more likely to be recommended on Airbnb’s website for guests browsing online.
Attract more guests because of your Super Host badge and status. There is a feature for website viewers to search for Super Host only accommodation. People want to get good value for money and trust other people’s recommendations and reviews.
Gain access to exclusive rewards, such as, credit to spend on overnight stays with other Airbnb hosts around the world.

To become a super host, you need to meet the following criteria:

You need to have an overall rating of 4.8+ (there’s some flexibility to this rule)
10+ stays or 100 overnight bookings
Less than 1% cancellation rate
90% response rate

Being a super host can be a lot of hard work when starting out your Airbnb rentals. However, the results and rewards are there.

7. Consider a Management Company

Are you new to hosting or are your bookings struggling? Maybe it’s because of your listing strategy. If you don’t have a good listing strategy or don’t have one at all – this is most likely your downfall.

You shouldn’t overlook asking for a professional management company to take a look at your listing to see what you need to improve on. It could be your photography, your prices, and or your guest communication.

A good management company is a hassle-free way of ensuring that everything is being done to increase your properties revenue and profit. They are designed to help your rental flourish in the short-term rental market with its marketing strategies and services.

Read now: How to Maximise Your Profit on Your Airbnb.

Keey offers online and full management for your short-term rental. To get in touch with one of our team advisors at Keey, be sure to check out our website.

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