For many owners, having a few short-term rentals can help improve a real estate portfolio and the benefits include reliable income, less prohibitive regulation, and reduced workload, especially when the services of an Airbnb management company are. used. There are many opportunities for homeowners.
Higher return on investment – Traditionally, the downside to short term rentals is that they are more likely to have long periods of vacancy. However, now people have the option of signing up for several months at a time, owners can guarantee long term bookings and therefore more predictable income streams. The nature of Airbnb allows hosts to charge a higher rate than they would for regular renters on insured short-term rentals. For example, in London, Airbnb’s UK Insights report found that a typical host in London earns £ 74.28 per night and that, compared to the average monthly rental income in London of £ 1,430, reported by the Office for National Statistics in 2021, you get the following:
– Potential annual income of long-term tenants: £ 17,160
– Airbnb potential annual income (if booked 365 days per year): £ 27,112.20
There are, of course, a lot of caveats to the above.
High occupancy rates on Airbnb depend on factors like the property’s location and facilities, and you’re unlikely to book it every night – although that’s where the supply of long-term rentals is. can be particularly useful in securing occupancy. There are also local restrictions you should be aware of, such as the London 90 Day Rule (which limits the number of days you can host in the capital to 90 days per year) that will affect the amount of income you can earn. Still, when you consider the potential ROI ratio, the numbers above show that there can be some significant benefits to using Airbnb.
Simplified rental process – There are a lot of regulations related to being a homeowner. Not only do you have to complete several risk assessments and health and safety checks, but there is also a whole host of rules regarding the registration of new tenants, including listing and deposit management.
While these regulations are rightly there to protect tenants from bad landlords, they can add a lot of stress and delay to the rental process. On the flip side, Airbnb hosts are constrained by far fewer rental regulations than regular owners. You will still need to comply with health and fire safety legislation and it makes sense to keep your property in good repair to attract more bookings. You’ll need to provide your tenants with a safe, clean, and comfortable experience – but any good landlord should do it anyway.
Peace of mind against damage – This is a scenario that the owners know all too well; at the end of the tenancy, your tenant only leaves the property so you can walk around and find that they’ve damaged the carpets, broken a doorknob, and lost the spare key. Then you have to fight the tenant to claim the deposit, which can take months in severe cases. Even if you are able to recover the bond funds, this is often not enough to fully cover the damage.
The good thing about Airbnb is that when your guests leave, ownership is immediately verified and, contrary to popular belief, wear and tear is significantly reduced with this type of rental. After all, your guests are usually away most of the day, and when they come in, they won’t have many different guests or move furniture!
While there is still a demand for long term rentals in the UK, using Airbnb for short and long term bookings can offer owners flexibility and freedom in the face of increasing regulations. more prohibitive. However, renting properties in this way can take more time and energy, especially when it comes to questions and changes.
If this is an issue, it may be beneficial to hire the services of an Airbnb property management company, who can handle the entire process for you, from registration to cleaning, as well as handling any questions, disputes or damages that may arise.
Diversifying into Airbnbs can be a lucrative decision, offering a higher return on investment with much less input than with traditional rentals. Best of all, there are Airbnb management companies that can help take charge of the process, leaving you free to step back and relax knowing that everything is taken care of.
Having a blended portfolio of traditional rentals with Airbnbs can be a great way to balance risk against potential income gains, giving owners greater peace of mind and security.
* James Jenkins-Yates is the founder and CEO of Houst (formerly Airsorted) *
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