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How to Determine Your Airbnb Profitability?

You probably have many questions before making an Airbnb rental investment. Know that this is a perfectly normal feeling and that a certain number of parameters must be taken into consideration to obtain the best possible profitability. Moreover, you can also be assisted by a concierge to manage the various terms of the rental.

Ensure better occupancy rates
Consider seeking assistance from a concierge service to manage the details of your Airbnb rental and enhance the rental experience.

Airbnb profitability through your occupancy rate

You've taken the plunge by becoming an Airbnb owner. Now you're looking to determine your profitability. The first parameter is the occupancy rate, also known as the fill rate. This is a first data that will vary depending on two factors. That is to say, the rental potential of the city in which the property is located as well as the events that may occur. For example, if you have made an investment in Biarritz, you know that you have a seasonal property. Between the period of May and September, you can expect a particularly high occupancy rate and much higher than in the other months of the year.

If you have made an investment in the city of Cannes, the occupancy rate will be particularly high during the festival period. While an investment in Bordeaux or Paris will allow you to welcome tenants all year long.

Generally, the occupancy rate ranges from 40 to 64 percent. The profitability of Airbnb in Paris is particularly interesting, but it is in the Lyon area that the occupancy rate is the highest.

Then comes Strasbourg, Toulouse and finally Cannes. Don't hesitate to invest in Nice and Montpellier with an occupancy rate of around 50%.

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Is renting in Airbnb profitable?

The answer will be positive, provided you invest in a city with a strong seasonal rental power. But there is another parameter, that of the optimization of your accommodation. More specifically, a tip that is just as important as the previous one, offering the best possible service to your tenants.

It all starts with the selection of the area that will obviously be interesting for the tenants. You have to put yourself in their shoes by defining what they will need. Generally, this means easy access to public transportation and shops.

In addition, the overall condition of the property should be impeccable with not only an optimal location, but also quality amenities. If you are looking for a family with children, you will need to provide them with childcare equipment.

At the same time, don't hesitate to ask for the help of an interior designer so that your decoration is well done. By multiplying the good points, you obtain a particularly attractive accommodation and the visits on your advertisement will result in a reservation.

How to calculate the profitability on Airbnb?

As you can see, different parameters will directly influence the profitability. But what you may not have known is that there is a simulator directly on the platform. This way, you know if your Airbnb is profitable or not.

A solution to be favored, because this way, you don't need to dive into sometimes very complex calculations. You will get a lot of information that will be brought to you directly by the simulator.

The information you will get will be based on the bookings that took place during the last 12 months. Of course, in order to refine the data, the simulator will take into consideration the geographical area. After that, the price of the reservations is multiplied by the occupancy rate and the price per night.

Be careful, the figures you will obtain do not take into consideration the additional costs and taxes. You should not forget that your income must be declared to the tax authorities.

However, the simulator is an excellent way to estimate the potential of your ad. You can also carry out this simulation completely free of charge and see with your own eyes if your rental will be profitable. But as you can imagine, this information is provided as an advisory and in no case it is a guarantee.

Your actual income will depend directly on the facilities available to the tenants, the characteristics of the property, the rate you set for the night and of course the occupancy rate.

In addition, don't forget to consider certain legal restrictions with respect to the country or city.

Why not expand the capacity of the property?

To maximize your occupancy rate, it is in your best interest to obtain a higher return. This can be done very simply with some design tricks.

Offering comfortable sleeping arrangements for additional guests can lead to positive reviews and higher occupancy rates
Adding a sofa bed to your two-bedroom apartment provides an excellent opportunity to accommodate more guests and charge higher rates per night.

Consider the example of a two-bedroom apartment. If you invest in a sofa bed, you have the opportunity to add an extra bed. This is an excellent opportunity to charge more per night.

Moreover, this justification is totally consistent, because you can accommodate an additional person. If previously your accommodation was only for a couple with one child, you could also accommodate a family with two children.

Example of a profitability calculation

To better understand the profitability of a housing, nothing better than to take a concrete example. For example, you have decided to start renting out Airbnb by purchasing an apartment for 300,000 €.

If you manage to rent it out for 20 weeks over the course of a year with a nightly rate of €100, you can expect to earn €700 per week. When cumulated over the whole year, you have generated a turnover of 14 000 €.

But to determine the rate of return, you will have to make the following calculation: the total amount of money earned / the amount of your initial investment X 100, that is to say 14,000 / 300,000 X 100 = 4.6 %.

In the example we have taken, you have a profitability of 4.6%. But be careful, this is only your gross income, i.e. without taking into account taxes, household expenses and fees.

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Why not use a concierge for vacation rentals on

As you probably know, seasonal rentals have many advantages. But in order to attract a maximum of potential customers, you must be vigilant from the start, i.e. from the purchase of the property to the reception of your visitors.

Satisfied guests are more likely to return and recommend your rental to others, leading to increased bookings
Be a gracious and welcoming host to leave a positive impression on your guests and encourage positive reviews.

Because of this, there are many parameters to consider and you may find yourself lost very quickly. But with a concierge service like UpperKey, you can avoid a lot of hassle and put all the chances on your side to develop your profitability.

The objective of a specialized concierge service like UpperKey is to manage your vacation rental in its entirety, but above all to use the various levers to increase the appeal of your property. Thus, you will increase your occupancy rate and in some cases you will also be able to increase the price of a night's stay.

Excellent news to get the best possible profitability. So if you'd like more information, don't hesitate to contact UpperKey Concierge.


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