With more people than ever opting for staycations, Airbnb has become a lucrative way of making money from hosting your home
Is now the time to create an Airbnb Annex?
AirDNA, which monitors holiday accommodation websites such as Airbnb, recently released data that showed the cost of self-catering accommodation in the UK had soared, now costing 40% more on average compared to the summer of 2019.
In recent times, many people have chosen to stay in the UK to avoid putting themselves at greater risk of COVID-19. Others have been coerced, due to vaccination or quarantine restrictions. Once the decision to stay in the UK had been taken, self-catering was the default option for many holidaymakers, as it allowed people to stay within their family units.
Feast and famine
Self-catering accommodation landlords, who suffered during the various lockdowns, are now able to charge premium prices and still fill their properties with ease.
In some holiday hotspots, the average price paid surged even further—self-catering accommodation in Brighton is now 89% more expensive than it was in 2019. So, is now the time to build an AirBnB Annex?
"In recent times, many people have chosen to stay in the UK to avoid putting themselves at greater risk of COVID-19"
What’s on offer now?
Airbnb is famed for its diversity of accommodation—here are some of the weird and wonderful places you can stay: converted pigsties, geo-domes, windmills, shepherds’ huts, log cabins, treehouses, lighthouses, yurts and castles.
Yet, most of the accommodation listed on Airbnb is far more mundane, and far less newsworthy.
Could you become a self-catering accommodation landlord?
If you would like to earn some extra income this might be right for you. Not least because AirBnB hosts are eligible for an annual £1,000 tax free allowance on income earned from their property.
The key thing is to think carefully about your property—can you see a way of creating separate accommodation for guests? This could mean, for example, converting a garage, putting up partition walls, adding a garden room or building an extension.
Spend time perusing Airbnb’s website—all the inspiration you need is there. To maximise the amount you can charge, it’s best that the accommodation has a separate entrance and a decent kitchen and bathroom.
Susie Brown, who runs The Little Lodge in Anglesey, spoke to us about her decision to become a self-catering accommodation landlord. “I had an underused wooden studio which I converted and then listed on AirBnB. Much to my surprise, within the first hour of the listing going live, I had over £1,000 of bookings. And, aside from the COVID lockdowns, I have been busy ever since. The extra income has been a godsend.”
"The extra income has been a godsend"
But it’s not all been plain sailing: “The hardest moment was when I was told that I would have to close in December—I was given about five hours’ notice! This meant our guests couldn't come for their much looked-forward-to Christmas and New Year holidays.”
Susie did her research before taking the plunge, and concluded the following, “With Airbnb you can offer almost any kind of accommodation, as long as you describe it honestly. The range of accommodation listed on Airbnb is vast—provided it’s clean, dry and warm you can't go far wrong.”
Is there demand in your area?
The easiest way to determine this is to look at comparable properties online. Look for properties near to where you live. How much are they charging? How booked up are they? If you can tick both those boxes, it’s time to move forward.
Get in touch with a local builder and architect—they will be able to advise on likely costs and potential planning permission issues. You should then be able to work out a rough return on investment. In other words, how long will it take to get your money back?
Do you need permission?
Unfortunately, the answer is “maybe”. It depends on where you live, the type of accommodation and how long you’re planning on renting the property each year. For example, you may need permission from your mortgage lender, the local authority, and your property insurer.
"To run an AirBnB you may need permission from your mortgage lender, the local authority, and your property insurer"
There’s a time cost too
Hosting guests, some of whom will be high maintenance, can be time consuming. Cleaning and changing bedding is never fun, and it’s even less so when it’s for someone else. Top tip: once you’re established, you can set a minimum rental period—this will prove far more profitable (especially in terms of your time).
It’s the small things that count
All guests will expect plenty of hot water, towels, bed sheets, soap, shampoo and toilet paper, heating, TV and WiFi. You should also have smoke alarms, a carbon monoxide detector, a fire extinguisher and a first aid kit.
But don’t forget the small extras: having a hair dryer, a coffee machine, plenty of clothes hangers and a fridge full of basics, such as bread, butter and milk, will make you stand out from the crowd, and that will help you gain lots of positive reviews, which are the lifeblood of Airbnb hosts. (Research has shown that more than 90% of people read customer reviews before parting with their hard-earned cash.)
Airbnb allows guests to rate specific things too, such as cleanliness and the ease of the check-in process, so pay careful attention to these. It’s vital your reviews are better than your competitors'.
All systems go
The right kind of accommodation in the right location could prove to be a gold mine. Perhaps you're sitting on one right now, without even knowing it.
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