It's estimated that Airbnb has around 223,200 active listings in any given year. Short-term letting is an industry that has grown hugely in recent years, due to an increase in domestic tourism and technology. So how do you begin creating a lucrative property management business?
Starting is easy but getting it right is tough. Read on as we discuss short let management and getting started with your new property business.
Main Types of Holiday Let
Most people choose from one of two options when setting up a holiday let. The first is to buy a property specifically to rent out. The second is to rent out their own home to bring in extra income.
Letting Your Home
Letting your home is a great way to make extra income when you are away. It will not require the initial outlay that buying to let does. In addition, using modern technology and mobile applications, the process is now easier than ever.
It is, however, not without costs. You will definitely need specialist insurance policies. The investment will also need to be made so your home complies with health and safety regulations, and you may want to remove valuables and personal effects.
Buy to Let
Buying to let is when you get a loan to buy a property with a view to letting it. While it does require more of an initial investment, you will also earn substantially from appreciation over time.
Buy In the Right Location
Finding a great spot is harder than you think. Most of the popular places will already have an abundance of short-term lets so competition will be high. However, go somewhere remote and the flow of guests may become non-existent.
The first step is to do your homework. If you are buying on a mortgage, this let is also an investment piece. Thus, you should also look for places that will increase in value.
Generally, the places with higher property prices are not the ones where the most revenue for short-term lets will come in. This is usually down to high property prices in bigger towns. Instead, opt for a medium-sized town or city and work on marketing the property.
The next consideration when finding a place to buy is distance. If you decide to do the holiday let management yourself, you really don't want to be travelling a long way every time you have a new guest.
Know the Rules and Regulations
Unfortunately, it is not as easy as just finding a property and renting it out. There are a number of rules and regulations you may have to abide by, depending on where you live. Some places may not even allow you to conduct short-term letting at all.
In London, the deregulation act will only allow a homeowner to rent their property for 90 days a year. This property will also be liable for council tax. Should the homeowner break the rules, they can be stripped of their rights to let so you must check them carefully.
Elsewhere in the UK, there are few restrictions on how many days you can rent your home out for. If you are doing this, always remember to let your mortgage company know. Primary residence and letting mortgages often have very different rates.
It would be impossible not to talk about short-term letting without discussing Airbnb. The platform revolutionised the holiday let industry, which now shows no signs of stopping. It offers a simple and effective way to monetise any property you have.
You sign up and give details on the type of property. You place the dates it is available into the system. Airbnb then promotes it on its website and applications.
For doing this, Airbnb will take a fee from both sides. Around 3% will be taken from the hosts on each rental transaction. Each guest will also pay between a 6-12% fee on each booking, making this very profitable for the company.
The popularity of this has meant a host of micro industries have appeared to serve the Airbnb industry. Everything from full Airbnb management to Airbnb cleaners is now available to help you out with the letting.
Decide on a Level of Commitment
Once you have the property and the method to rent it out, you need to decide on a level of commitment. This is based on how much time you want to invest in running and managing the property.
If you have a full-time job already and are balancing it with a family, then it may be impossible. In fact, it often works better if you have multiple lets and can do it full-time. Consider hiring an Airbnb agency or holiday let management company to help you manage the property.
For a small fee, they will take care of everything you need, from cleaning to marketing. All you need to do is have the property ready for them to take over.
If you decide to do it alone, then create a robust plan. Think about how you will turn the property around for new guests with regard to cleaning. You will also need to take time building a marketing strategy.
Marketing the Property
If you do decide to do it alone, you will need to spend a large amount of time marketing the property. This starts with getting great photographs of the let, so don't cut costs and hire a professional photographer. If you go with a management company, this will be one of the first marketing services they provide for you.
After this, makes sure you fully describe your listings. Know your audience, and don't be afraid to boast about the property's best features.
Short Let Management
In summary, find a great location. Decide on how you want to rent the property out and your level of commitment. From here, you can start to build a rewarding and profitable business.
Your first stop should be Pass the Keys. We offer Airbnb management for UK property owners. Contact us to discuss your short-term let and we can help build your new business starting today.