Have you considered listing your property on Airbnb? How do you know if your property is suitable to rent out as an Airbnb?
Having worked with properties in Israel, Italy, Romania, Cyprus, and the USA, as well as being a frequent guest around the world in other people’s rented out homes I’ve gained some excellent insight into what it takes for a property owner to succeed in this incredibly competitive market.
The Airbnb market is made up of two main players:
- People who have an extra living space or home property and want to make some revenue on the side.
- Property management companies such as Sea N’ Rent which take on the management of your property as their business.
The thing to remember is that there is no separation in the competition. Local homeowners are competing against professional property management companies.
Which brings me to my first question to ask yourself before listing your property on airbnb:
Listing Your Property on Airbnb
1. Are you prepared to let your property be managed by a professional?
This is a good point to remember as it may be the best way of your property standing any sort of chance competing in the market.
Professional property management companies are living and breathing this operation. The best ones are operating 24/7.
Working with a property management company, in general, will give you an edge, so making the decision to partner with one, may be the key to ensuring your property is a good fit for Airbnb.
Yes, Airbnb wants everyone to believe you can just go online today and list your property and start earning and that is true you can do that, but let’s put that into context. Essentially you are a goldfish in a sea of sharks.
To see more advantages of working with property managers, make sure you read this article – Top 10 Advantages of Working with a Professional Property Management Company
2. What is your properties availability like?
Most of the properties I work with have at least 80% availability.
If you only have availability for partial periods throughout the year, you will get ranked down considerably on the Airbnb rankings. This means that when you are in fact available to rent, it becomes increasingly unlikely you will appear near the top of people’s searches and therefore you will not benefit so much from the lucrative short-term rental market.
3. Does your building have a strict policy?
If your property is an apartment in a building, you may want to check the policy by the building management company. Some buildings and some areas for that matter strictly prohibit short term letting.
That doesn’t stop everyone from turning their apartment into an Airbnb but it’s strongly advised against as the implications of breaking the rules will of course have consequences you need to deal with.
4. Are the local amenities a selling a point or are they a disadvantage?
If you live in a great city like Tel Aviv, the amenities are rich and plentiful. Or if you live in a rural area like the countryside the amenities are totally different but both can still be selling points.
Some areas however are planned and designed in such a way that all you want to do is leave them. People generally live there due to lack of better options.
This is a serious question to ask yourself. Is your property located in an area where the amenities are highly sought after or is it an area that people simply pass through?
The doesn’t rule out short-term letting completely, as it may be a working town where employees and contractors need short-term accommodation. In that situation, it’s simply a case of you understanding who exactly is your target audience and positioning your property to suit them.
5. Do you have all the basics?
Regardless of whether your potential Airbnb is on the top end of the pricing scale or the bottom end, guests will have a minimum level of expectations which you should be prepared to provide.
These amenities include the livable basics: Fresh towels and linen, hand soap, heating, AC, a high level of cleanliness, garbage pins, all working lights, WiFi, fire deterrent measures, TV, and hot water, just to name a few.
An Airbnb that doesn’t have the absolute basics is generally not going to perform well.
6. Are you prepared to invest in your property?
Giving your property the once over before releasing it into the wild savanna is a must. There are so many things we learn to live with that an Airbnb guest will give you a bad review over.
In the world of Airbnb reviews mean everything.
Just as 5-star reviews will elevate you, 1-star reviews will crush you. Sometimes a bad review will be unavoidable, but if you get a bad review for something that was clearly within your power to control, honestly you probably deserve a bad review.
In my experience, many of these issues are easily resolvable DIY issues. This could include cracked tiles, cracked paint on the wall, a leaking shower head, presses that don’t close properly, window locks that are not secure, and so on.
Give your property the once over, and hire whoever you need to get and just tie up all those loose ends. You lived with them perhaps but your guests don’t want to, so get it sorted.
7. Can you provide professional photos?
Going back to the point I made earlier about goldfish in a sea full of sharks. The sharks use professional photos. You taking out your phone and taking a few snaps is not going to cut it.
If you want to compete with professionals you’re going to have to raise your game. This is another reason why working with a professional property management company may be the way forward for you.
At Happy Owner all the properties we manage get a professional photoshoot as part of the service.
8. Do you know what your prices should be?
Knowing what price you want and what price you can get are two very different things. Do your homework. Search on Airbnb for listings in your area and see what’s selling.
Price accordingly depending on your position in the market at any giving time.
Professional companies use sophisticated pricing tools such as PriceLabs to give themselves the edge over non-professional competition.
If you fail to optimise your prices for specific periods you will lose out on a lot of potential earnings.
I’ve seen owners put a flat rate on their property indefinitely. The Airbnb market fluctuates greatly and in some seasons you can double or triple your asking price while your expenses stay the same, dramatically increasing your profit margin and making you a Happy Owner.
9. How available are you to deal with your guests and inquiries?
To perform well on Airbnb you need an excellent reply rate. That means dealing with inquiries as they come into your inbox. It also means when you have secured a guest that you need to deal with their questions and comments both before, during, and perhaps even after their stay with you.
As you grow in demand so will the amount of time you need to spend on the computer.
This is fine if it’s your main stream of income but if you only see it as a passive form of income it may not be worth your while.
10. Are you prepared to learn the platform?
Airbnb generally is an easy platform you use, however, you’ve still got to learn how to use it, and for some, that may be a steep learning curve with many mistakes along the way.
Thankfully there are heaps of tutorials online to help guide you.
There’s a lot of people online today declaring how they made a multi-million dollar business working on Airbnb and how Airbnb is the perfect business for passive income and there may be some truth in both statements but don’t be naïve.
Many of the people making these claims are leaving out a lot of details, such as the question of whether they own the properties or they are managing the properties. These are facts that would greatly affect their bottom line.
There is a very low barrier of entry to entering the Airbnb market.
This is both a good thing and a bad thing. It’s good because anybody can get online and start hosting within hours. It’s a bad thing because there is massive competition in the market.
To compete seriously or even just to optimize your property so it reaches its earning potential you may want to partner with a property manager.
If you want to swim with the sharks go in prepared or team up with a shark.
Have you got a property in Tel Aviv that you’re considering renting out as an Airbnb?
Set up a call with Happy Owner today and see if we can help you with earning the most from your property.
Scott D. Renwick is the Head of Operations at Sea N’ Rent Ltd., working with them since 2015. His skills have helped the company structure its operations to ensure stability and future growth in the property management business.