It’s November in London and its getting dark at 4:30pm and the temperature is getting lower by the day. Apart from a few very warm days it was a generally wet and grey summer this year. My airbnb was full most days apart from the occasional empty room on a Sunday (to be honest its nice to have a day guest free day sometimes). My prices are as low as ever and it doesn’t seem likely to change any time soon. My competition in East London seems to have increased in my area over the last 5 years I have been a airbnb host, and is probably one of the reasons why my prices are still so low.
A friend who lives in the same area of East London as me asked me to the pub for a chat and it wasn’t long before he started asking about my airbnb. He wanted some advice on starting his own airbnb. He was more interested in having a country retreat style airbnb business; a small cottage perhaps in a nice part of the English countryside? I gave him my advice and on the whole he was not very happy.
There is a big difference between being a live in host (i.e. your listing is a room in your house or flat) and hosting a place that is separate from your residence (especially if some distance away such as in another town). It’s a huge problem if you have to travel long distances to check in guests, clean, or fix issues. This can make any profit you make on your listing simply not worth it.
I am a live in host so chances are if something needs to be done at my airbnb I am on hand to do it – immediately. Even if a guest arrives at 2am, it may mean dragging myself out of bed but I can do it and be back asleep in minuets (happens way too often for my liking). The idea of driving across town at 2am to do the same thing is a much bigger ask. Its the daily hassles that cause the most grief. Try to avoid them if you can. There are things you can do such as using automated check-in systems such as key safes but some things are only cost effective to do in person.
The idea of having a airbnb listing out in the countryside may seen romantic but if it’s going to be a lot of trouble to manage then you have to ask yourself – is it worth it? Unless you can charge big money for a few nights stay then by the time you factor in your costs and time you might be only making a few pounds. Cleaners don’t work for free and even then could be not available when you need them.
My friend who is thinking of starting his own airbnb business also quizzed me on how I get paid and what tax do I pay. I explained to him how that airbnb pays me only AFTER a guest checks in and the money can go into my bank account but it’s quicker if the cash is paid into my Paypal account. I also explained that my Paypal account in any name and can make payments straight out of my Paypal account to purchase almost anything. This means it does not have to hit my own bank account.
I explained to my friend when and how much tax he will need to pay on his airbnb business. How the government rent-a-room allowance works and what expenses he can claim. He seemed surprised that he would need to pay tax on the income and how much it would be. This is important because if you already have a full time job then the extra income is going to be taxed at a higher rate. It might make your airbnb business simply not worth it.