If you decide to put your own home up for rent with wi fi or just a spare room for short term rentals and being an Airbnb host on the Airbnb website, it's perfectly normal to be interested in your eanirng potential and so, Airbnb profitability now that there are not travel restrictions anymore due to covid 19. You want to make money and get the best possible airbnb profit with the highest possible occupancy rate. However, to put all the odds on your side, you need to consider a set of parameters.
What is the difference between rental yield and rental Airbnb profitability?
Indeed, there is often some confusion between the two terms. Although close, the meaning is radically different. When we talk about rental profitability, we are talking about taking into consideration the extra income generated by the rented property, but also the variation in price that it may undergo over time. But the rental yield is only interested in the airbnb income that could be generated thanks to your airbnb rental.
Is it possible to have a profitable and guaranteed Airbnb properties?
You probably want stress-free management and therefore permanent profitability, maybe with property managers. Unfortunately, the latter cannot be guaranteed by the platform, as there are various factors to consider.
For example, if you decide to rent an apartment in Paris with an unobstructed view of the Arc de Triomphe or the Eiffel Tower, its airbnb short term rental or longer term ones value, the profit margin, will inevitably be higher than that of a property in the suburbs.
Other criteria to take into consideration when calculating the profitability of Airbnb is the presence of nearby means of transportation, i.e. a bus, tramway or metro line.
As you can see, finding the right location remains a determining criterion and if you have not yet bought your accommodation, consider searching a prime location immediately before purchasing it.
Also note that a home in a certain region will be more or less sought after. The most important thing is to meet the different expectations of your potential clientele and the type of clientele you hope to welcome.
Be also careful about the airbnb rental property period, because the profitability will not be the same. In France, the most obvious example is undoubtedly the Cannes Film Festival. At the time of the event, prices are systematically increased whereas outside this period, airbnb hosts are forced to lower the price of a vacation rental property.
Therefore, if you want to buy a house or an apartment in order to rent it on Airbnb.fr, take these different elements into account and consider a good home insurance as well.
Why choose an Airbnb concierge?
You don't necessarily know how to rent on Airbnb and you need to be reassured. Not only from a legal point of view, but also on the various administrative steps to be taken. In this sense, it is quite normal to choose a concierge company that is used to managing similar files and a good money making strategy. For example, choose Upperkey, because it is a company specialized in the field with great experience, whether in traditional long term or seasonal Airbnb rentals. This way, you will quickly be taken in charge by real estate professionals who will be committed to providing you with the best possible return.
From the start, a first time interview will be carried out to understand your expectations and to get to know the type of property you have. But in any case, you will benefit from a management without any stress and without any intervention from you.
Airbnb : how much does it bring in ? Take a closer look
If you want to estimate your vacation rental income, it is best to use the AirDNA tool, an Airbnb calculator.
Very easy to use, you will be able to obtain a concrete estimate that will allow you to delimit the potential profitability of your accommodation throughout the year. To achieve this, AirDNA uses four distinct factors, i.e. the number of rooms, your address, the capacity of your home and the number of bathrooms. Against these factors, you will get essential data to define your profitability.
No need to get out your calculator, all the data is directly proposed to you with the application of an average occupancy rate in comparison with similar accommodations in your area. Once the occupancy rate is determined with the average price for each night, you know your potential earnings per calendar year.
Is it possible to optimize your property to get a better passive income on Airbnb?
As explained above, you know that different factors will have a considerable influence on your profitability. Contrary to some preconceived ideas, it is not enough to have a larger surface to obtain a better profitability. It is mainly about the layout and optimization of the space.
So, be careful about the number of potential beds and by being attentive to this element, a 30 m² unit can be much more profitable than a 45 m² unit. As you can also imagine, a properly tidy and clean property will be rewarding for the traveler, as will a good exposure.
Without necessarily going through an interior designer with high quality furniture suggestions, do not forget to harmonize your decoration with a modern style. Beyond the technical information, the appearance of the accommodation remains essential to obtain the best possible conversion rate. That is to say, when someone consults your ad, the description of the airbnb host property and its photos must make them want to make a reservation even with very few reviews. You have to impress potential airbnb tenants.
Think of the Airbnb.fr platform as a community of visitors and airbnb hosts who will leave comments on each reservation. This is called social proof and know that it is another parameter with considerable influence. If unfortunately you accumulate negative reviews, don't be surprised if you have trouble renting your property. Therefore, a negative effect will be directly felt on your occupancy rate and therefore on your profitability.
How important is occupancy rate in Airbnb rental performance?
If you have a property in a seasonal city like San Francisco or San Diego, be aware that Airbnb occupancy rates range from 40 to 60 percent. It's important to have a maximum occupancy rate to expect to generate significant revenue.
However, this is not the only determining factor, because taking the example of the city of Cannes, you should know that the agglomeration has a low occupancy rate. However, the rental performance is particularly exceptional due to its festivals and conventions.
If you want to buy the right property in France while limiting the risks, you should consider buying in a city like Lyon, as it is a city that is in high demand throughout the year. Other possibilities include Toulouse, Strasbourg, Bordeaux and of course Paris. For seasonal cities, Biarritz and Marseille are undeniably at the top of the list.
A market study is necessary
A market study is a long and tedious step, but necessary to obtain formal information. It consists of creating a summary table in which you indicate the Airbnb nightly rates as well as the filling rate in relation to the calendar.
Also remember to note the strengths and weaknesses of your competitors and you will obtain a particularly reliable table. But if this summary is a real gas factory for you, you can do without it and directly choose a concierge company like Upperkey. The agency's professionals will do the work for you, determining the fairest rental price for your location and the season.
But most importantly, you'll benefit from expert advice on how to get the best possible return on your Airbnb investment property knowing the pros and cons.
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