Although Airbnb and the broader short-term rental industry offers homeowners the opportunity to create unique experiences for their guests, first and foremost it has to make financial sense for your investment property. Over the years we’ve learned that a good strategy can help properties stand out in the marketplace, attract the best guests, and capture an earnings uplift.
Here are a few tips that will help you get started with building a business case for your Airbnb listing.
1. Define your target audience
Airbnb has proven itself to be a platform that caters to a variety of guests, from travellers looking for unique experiences to families looking for a short-term rental while their home is under renovation. Catering to multiple audiences, Airbnb can help you tap into a range of different markets depending on the location of the property and the property itself (size, configuration, amenities, etc).
This is why as the very first step of your Airbnb opportunity assessment, it’s important to ask yourself what unique features your property possesses and who is going to be the target customers. Answering these questions will help you better understand the market and also generate ideas around unique value propositions and styling you can offer.
Hometime’s Tip: learn from others by speaking to other Airbnb hosts or Hometime property specialists.
2. Budget upfront investments
Once you define your target audience, you should start thinking about what type of investments you could make, in other words, what kind of enhancements you could make to your property. Airbnb guests make their booking decisions based on how the property is positioned and represented in the listing. Having a property that immediately resonates with your target audience will help you capture more bookings at better rates.
It’s a commonly held misconception that in order to have a top-grossing Airbnb listing you have to make large investments to furnish and style every single detail of your property. Our experience has shown that small targeted features, such as colourful artwork that stands out in the listing photo, can go a long way and generate great value for money.
Hometime’s Tip: use Hometime’s style guide to source ideas and best practices.
3. Estimate occupancy and pricing range
The next step is to gather some numbers and estimate what occupancy your property could have and in what price range.
There is no one way of gathering this information but a good start would be to look at the Airbnb platform itself. Searching for similar properties in your area could give you an indication of what rates are being advertised, while checking their calendar availability could give you an indication of whether they are successful or not in renting properties at the advertised rates.
In terms of occupancy, a ballpark figure for self-managed Airbnbs that you could use is around 60%. Professionally managed Airbnbs with specialist pricing teams can deliver occupancy rates of 75% and above.
Hometime’s Tip: use Hometime’s property specialists to get indicative numbers for your property and area.
4. Run your plan through a local professional
The last, and frequently overlooked, step is to run your plan by somebody who has good local experience with short-term rentals. Every property is unique and a fresh look at what it can deliver can help you notice some important details you may have overlooked, as well as help you source more ideas.
The top-performing Airbnb managers can blend overall market insights with their local expertise very well. This is why it’s important to complement your research with a first-hand opinion of somebody who’s already managing a portfolio of Airbnb listings.
Hometime’s Tip: request a meeting with a Hometime Hosting Partner in your local area and chat over a coffee about your property and the broader market.
If you want to get personalised assessment and recommendations, feel free to schedule a call with one of our property consultants here.