What About an Airbnb Business Managed by YOU.
At WorkSmarterAustralia.com we look for new, exciting businesses that can be run and managed by yourself from home. We look at everything from online businesses to franchises and more traditional style home businesses. I do a bit of travelling personally and have thought to myself, “what about an Airbnb business that can create a better form of income for my investment property?”
So with this in mind, I thought I would share some thoughts with you on the subject.
If you love to travel you will find accommodation all over the world through Airbnb. And we know that travelling makes you feel good, but it can also be good for you.
I came across this fabulous article on why travel is good for your health. All the more reason to get involved in the travel industry through Airbnb.
What is Airbnb ?
First up, what is Airbnb and how does it work.
I’ll give you a brief rundown on what it entails and also give you the link to the Airbnb website so you can check it out later (note- clicking on this website link will earn you a $20 travel voucher with Airbnb).
Airbnb is an alternative to the traditional accommodation that you would get from a hotel or a serviced apartment. What it does is link you with owners of property who are able to let out (rent) their home, apartment, a room, a tent, caravan, boat… you name it.
The owner of the property registers their property with Airbnb who then manage the ‘connection’ with renters and reservations for the property. They interface between the owner and the renter.
Generally, the property owners request that stays are 2 or more days… but this varies. The property owner charges a rate for the property ( based on recommendations from Airbnb) plus a cleaning fee. Payments are managed through Airbnb for the rental, and they take a percentage, and then send the balance to the owner.
What is the Cost
The cost for Airbnb management is generally less than a real estate or traditional holiday let management.
It also enables then to ‘holiday let’ a house in the suburbs that would generally not be available through a real estate property management agreement. It gives you a huge amount of flexibility.
I have rented several properties with my family in some fabulous locations – from resort style 3 bedroom beach-side apartments on the Australian Gold Coast; houses and general suburban apartments through to a traditional “Samurai” house in central Kyoto, Japan.
The prices I have paid vary considerably based on location and ‘comfort level’. But – you get what you pay for and generally it is cheaper than hotel or service apartment rental.
Airbnb for Business
Several business colleges of mine have rented Airbnb properties in New Zealand, America, UK and recently the Solomon Islands. They have found it highly convenient as they are able to rent close by venues that are away from city centres. They have also found it to be considerably cheaper than hotel accommodation in most cases ( but not all).
I personally use them now if I intend of spending longer than a few days in one place, and particularly for any business time that I require longer term accommodation.
So Airbnb is fast becoming a mainstream option for the business traveller. This simply increases the desirability for Airbnb as a money-making option for the average property investor.
Live Like Locals
As an Airbnb renter, one of the coolest things that make this experience so unique is that you can literally live like a local in any country in the world.
Airbnb offers so many options and varieties of accommodation to the renter for them to live in a house or a hut, right in the middle of suburbia if you want.
The choice of accommodation types is huge and it creates a whole new experience to the traditional holiday. For a family, the option to rent a big house with a pool and in-house theatre is all possible, or a romantic luxury penthouse apartment on the beach for a couple. And for the budget minded you can rent anything from a room in someone’s house, a Yurt or Teepee, or a caravan.. the options are there for everyone.
Which is also what makes this so unique for a property owner. So what about an Airbnb business for you?
So What About an Airbnb Business for You?
If you happen to own an investment property that is not getting good returns through traditional rental methods, this might be a great option.
The downside is that you might need to have more input into the rental process that the traditional holiday rental management or real estate. But this is where you make the cost savings. So it would certainly suit someone who has a bit of management experience or is good a logistics.
However in saying that, most places that I have rented have not involved any physical contact with the owner. A system is usually set up where the keys are left in a safe or a combination type lock up. So, all the owners need to do is give the renter a combination for them to retrieve the keys.
You would need to arrange cleaners to give the place a tidy and wash bedding etc. But this can also be done by you or a family member if you want to save money on cleaning and earn some extra dollars.
But What about the Riff Raff?
Airbnb vet your renters quite heavily and they are required to submit a list of verifiable identification documents before they are allowed to rent a property through this service.
Additionally, owners are able to post comments about a renter and rate them as a desirable tenant or if the don’t recommend them. Same goes for the renter who is also allowed to comment on the renter and their description of the accommodation.
So there are checks and balances in place to minimise the risk of unnecessary damage happening to your property.
However, it goes without saying that a good landlord insurance package is highly recommended.
Some Final Words
My strong advice is that you will need to have a discussion with your accountant about this type of business arrangement so that you can totally understand the options and if, in fact, this would be a profitable business for you.
There will also be some tax implication, both in the form of offsets and in payables that will certainly need to be clarified.
And as I am an investor and business owner (hence an informed risk taker) and not an accountant or a financial or real estate professional, I’d hope that you would take my advice and check it all out thoroughly for yourself.
For the record, my #1 recomendation is online marketing. Cost effective, good ROI and profitable.