It's July in London and it has been a record hot summer. It suddenly became warm at the end of April and it seems is just getting hotter and hotter. Airbnb has been busy every day but my prices have been kept low because of the Airbnb smart pricing system (it only shows the lowest price in every situation). So i'm still charging £20 per night on average which is the same as nearly 5 years ago.
It's nearly October in London and it's gotten much busier now that summer is nearly over. Over summer I had plenty of bookings but I was not 100% full. Since the start of September I have been full every day and with higher prices that July or August. I recall this being the same last year also. Most of my airbnb customers stay only one or two nights. This means more bed sheets to clean and more hassle checking in and out guests but I prefer this to having empty listings. In previous years I used to keep my prices very low to ensure I get plenty of guests but now I think I don't need to do this as much as I have over 600 reviews. Having so many reviews gives people confidence they will be getting what they are paying for.
Can you get an Airbnb Mortgage?As far as i'm aware there is no such thing as an Airbnb mortgage and I think it's highly unlikely there will ever be. Despite what you may have heard from friends or from some get rich seminar you can't walk into a bank and borrow huge amounts of money on the promise you will run a very good airbnb with the money. Now more that ever banks are under very strict rules of what they can lend to who. Unless you have a large provable income you won't be getting a mortgage that would allow you to buy an property for an airbnb business. The vast majority of airbnb hosts who let whole apartments are using the standard buy-to-let mortgage and have not told the bank they are letting on airbnb. Metro bank is offering mortgages that give you permission to let the property on airbnb for up to 90 days a year. This is a case of Merto bank using it's common sense. They already know that many of their customers are listing their mortgaged property on airbnb and are keeping it secret from the bank. Other banks would be wise to follow their lead instead of simply turning a blind eye.
Superhost secrets - what REALLY gets you more bookings on AirbnbThere are lots of blog posts on the internet giving tips on how to be a great airbnb host and how to get more bookings etc. Most have pretty much the same content. A good example is this blog post on the airbnb website (presumably the content is acceptable to airbnb and factually correct so bear that in mind). But a lot of this stuff is not overly useful unless you can actually get someone to book your listing. Your place might be amazing but if nobody books it the world will never know. So here is my advice on how to get more bookings and be full all the time: -
- Be good value for money. Or in other words be 'cheap'. Everyone wants a bargain and you can be that the cheapskate in everyone will usually win out. Be at least a pound or two cheaper than your nearest rival.
- Have lots of reviews. People want safety of choice. There are no instantly recognisable brand names when it comes to listings. If you have lots of reviews (and I mean hundreds of reviews) you become a 'safe bet'. Get more reviews by getting more guests so be willing to accept a smaller amount of money and more short term guests to get those reviews stacked high.
- Be flexible. Accept short term guests. So many of my guests are one nighters. This may seen like so much more trouble (and it is) but since so many people have a 2 night minimum stay you will never have an empty listing.
- Have professional looking pictures - both of The Listing and Yourself. Use the airbnb photographer to get professional looking pictures done (also they become airbnb verified). You might seriously want to have a nice clear professional picture of yourself in your profile. Not a picture of you trying to look cool at some party, a proper professional picture like you might see on Linked In. If you look like a joke then you can't expect to be taken seriously.
- Don't charge a cleaning fee. This is a turn off.
Its coming close to winter here in London and although the first snow has not yet fallen bookings have become thinner on the ground. I am lucky that London always has someone arriving from somewhere so bookings do come in no matter what the weather but sometimes it's nice to have firm bookings in advance - or so I used to think? The problem with being an airbnb host is that it becomes your life in many ways. For some this is a good thing and can add meaning and a source of enjoyment. For me this means I am effectively on call 24hours a day. I can't afford to pay anyone else to look after my business and nobody will ever care about it as much as I do. Thankfully there have been few occasions which has meant I have to run away from my real 9-5 job to sort out a problem at my listing. However I am conscious of the fact that one day something may go very wrong. To reduce the chance of future issues I have decided to limit my calendar to only a month in advance. To my knowledge there is no way of doing this other than blocking off the dates. There is a function to limit bookings for only 3 months in advance but this is too long for me. Why do this? Because my life doesn't work on more than a 1 month ahead schedule. If I take a booking 3 months in advance and my life changes to the point where I can't handle the booking then I have to cancel and that means I get a penalty from airbnb and then no more bookings. [caption id="attachment_220" align="aligncenter" width="347"] You can limit how far in advance you want bookings.[/caption] I get a lot of last minute guests so I can still turn a profit only allowing bookings in the same month. In fact I have found that last minute bookings can achieve the highest prices (due to other good listings being already full) and the guests tend to be those who are in the city for a short time and just need somewhere to crash before they leave - this means they tend to arrive in the evening after I get home from work and therefore there is no mad rush to get the room ready. I will have to stop using Instant book also as I need to control what time people will be coming and going to my place. Instant book has been very successful for me. I think all my Instant book guests were very nice people and knew what they wanted. As mush as I like this tool its got to go as one wrong booking could cause a nightmare for me. I already had a problem a few weeks ago with a guest who was coming and I couldn't be there to meet her. I asked a friend to stay at my house and wait for the guest who was supposed to be there about 11am. My friend ended up waiting four hours for the guest (which is not unusual as many people misjudge the amount of time it will take them to clear customs at Heathrow airport and then actually make it all the way to my place) but it was very embarrassing for me and it really put my friend out.
I've been a Airbnb host now for nearly a year and have had over 150 guests in that time. Most guests stay for only a couple of days which suits me fine as the longer guests stay I find they are more likely to hang around the house and eat smelly takeaways in the bedrooms instead of exploring the city.
Weekly and monthly ratesI choose not to offer a weekly or monthly rate for the reason that I don't like longer term guests. I don't offer use of the kitchen or living areas in my house so guests are limited to their bedroom and a bathroom. My ideal guests is a tourist who has come to visit the city of London for a few days and only uses the house for a sleep and a shower. This means I get the house to myself for the majority of the time and wear and tear is kept to a minimum. The downside is a greater turnover of guests means the sheets and towels need changing more often.
Guest check-in'sGuests will want to arrive in their own time and leave at a time that suits them. I have set my check-out time as 11am and my check-in as 12. I always ask my guests if they can give me a rough idea of what time they will be arriving but I always take their answer with a pinch of salt. Most guests misjudge the amount of time it will take them to arrive at my house especially those coming from the airport. If a guests says they will arrive at 3pm I usually expect them to arrive sometime after 4pm. I'm not out to rubbish my guests but most people don't realise just how big London really is. I work full time in the city so It's usually impossible for me to check my guests in in person. I'm lucky in that my wife stays at home during the day and is there to meet the guests in person and show them their rooms and explain the house rules. If you don't have a family member to check your guests in then you are going to have to hire someone else to do it. This can be expensive as guests tend to arrive late and what seems like an easy task can mean waiting around, possibly for hours.
Price CompetitionI would love to charge more for my listings but I really can't or I will price myself out of the market. Several new listings have opened up in my area and most of them at a slightly cheaper price than me (some as low as £17 a night for a double room!). However these listings don't look as professional as mine and my listings have lots of positive reviews so I still get plenty of guests. My experience so far has been that new listings come on at lower prices and some old ones tend to drop off as they no longer feel the hassle is worth it. Airbnb is still new so lots of people would not have tried it yet so the potential for market growth is still huge but we shall see.
Is the money worth it?Being a host can be a lot of hassle and it's certainly not for everyone. I very rarely have an empty room (the city of London is a popular destination) so I maximise my earnings potential. For analysis I would say the yield on a airbnb listing is about 5% (a normal buy-to-let might be about 4%) so not massive. If your looking to get rich using Airbnb then your probably headed for a huge disappointment. I would say however in a good location the money is very steady and it's a great alternative to renting out a room full time to a local.
Last week a guest cancelled while actually on the way to my listing. I was expecting him to arrive around 1pm and got a message at 12:30 to say "it is too much trouble to come to your listing so i'm going to stay in a hotel right here." A bad excuse for sure. My mind immediately turned wether or not he is going to get a full refund or will i still get paid by airbnb?
What is your cancellation policy?When a guest cancels a booking it depends on your cancellation policy if they are entitled to a refund or not (Airbnb's booking fee is never refundable). There are three settings :
- Flexible: Full refund one day prior to arrival
- Moderate: Full refund five days prior to arrival
- Strict: 50% refund until one week prior to arrival