If you’re thinking of investing in a buy to let property, short-term letting sites like Airbnb are very attractive. You have more flexibility and greater earning potential, though there are a few things worth considering before signing on the dotted line.
Know the rules and regulations
Every location is different in terms of what they allow you to do. Some, like London for example, strictly regulate short-term lets and limit the number of days you can rent out your space. Therefore, it’s worth doing some research before investing to ensure you can legally do what you are hoping to. Also, think about your mortgage and whether it allows or prevents short-term letting and spend time reviewing your insurance to make sure you’re covered.
Research your earning potential
In the same way that regulations vary with area, so do demand and earning potential. Properties in tourist or business hotspots are likely to have higher occupancy, for example, and thus bring in more money than those further out of town. Have a look at potential competitors and research your likely occupancy and income before investing and be realistic about your new properties potential. It’s also worth having a look at what events and festivals there are in the area to get an idea of how your earning potential will vary throughout the year.
Consider your additional spend
Purchasing your buy-to-let property may be the main financial outlay, but it won’t be the only one. You’ll also need to prepare your property for guests, perhaps by decorating or purchasing furniture and take care of the on-going maintenance and cleaning. And, unlike long-term rentals, bill responsibilities fall to you, so think about how much you’ll end up spending monthly on gas, electricity and WIFI, for example. Other potential costs include Airbnb service fees and any hired help, whether that’s the cost of a cleaner or a property management company.
Be aware of the uncertainty
The flexibility that comes from short-term lets is a major advantage in some senses as you can get access to your property between guests and keep on top of maintenance. But, it does have its downsides. Your Income won’t be regular like it would be with monthly rent, it’ll be up and down, vary seasonally, and you may have quiet periods where you don’t make much. Likewise, however, you may have peak periods where you can charge more and are having to turn people away because of lack of availability. Therefore, if you plan, you should be able to balance your finances throughout the year.
Factor in your time
With guests coming and going all the time, there’s a lot to do. It’s a good idea to consider the amount of time you’ll spend being a host before you invest to make sure your willing and can make it worth your while. Though, if you are time-limited, you don’t have to lose out. Speak to us; we can take care of everything for you with our comprehensive airbnb property management service.