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Starting an Airbnb business is a great way to profit from your portfolio. According to statistics, as of March 2024, there are more than 91,700 Airbnb listings in London alone. 62% of these properties are entire homes rented out through the platform. With the average price per night at £174, Airbnb hosts can earn an estimate of £6,947 per year. If you have more than one property on Airbnb, you’re set to earn more than that.
A separate data publication shows an ever higher earning potential. The London housing data reveals that the average Airbnb listing can earn as much as £9,810 per year – even if they are limited by the 90-day rule for short-lets in London.
These figures show an incredible opportunity for property owners to earn from the extra properties in their portfolio. With the right guide, you can set up your secondary homes into a profitable asset that can grow your portfolio significantly.
In this article, you’ll discover the 7 simple steps that you need to follow to start a successful Airbnb business in London.
7 Steps to Start an Airbnb Business in London
Starting an Airbnb business is a simple process. If you have property investments and you’re not using them personally, you can have them listed on the Airbnb platform so guests from around the world can book a stay in the property.
Here are 7 steps you can follow to start a profitable Airbnb business in London.
Assess the London market and your portfolio
Before venturing into the world of Airbnb, make sure you know what you’re getting yourself into. Take a look at the market demand in London. From the data given at the beginning of the article, it’s evident that it has the potential to be quite profitable. But there are factors involved that’ll determine if you can achieve the same income. These include the location, property type and even the interior decoration inside the property.
The more visually attractive the property is, the more likely that you’ll get bookings. So make sure you have a complete understanding of the market so you’ll know what’s expected from your property. Remember, there are more than 90,000 listings in London. You want to make sure your property stands out so your efforts in setting up your property will be rewarding.
Determine your earning potential
As you assess the London rental property market, take note of the average prices of Airbnb properties around you. Look at the different pricing strategies based on location, property type, amenities, etc.
This will help you create an efficient pricing strategy that can maximise your earning potential and occupancy rates. The goal isn’t to have the highest rental rate in the neighbourhood. You want to give your guests the best value for their money.
When setting your pricing strategy, consider all the expenses related to managing a rental property. This includes mortgage payments, property and income taxes, insurance premiums, cleaning and maintenance costs, property management fees, etc.
Creating a flexible pricing scheme that adjusts to the seasonal demand is advisable. This will allow you to capitalise on London events so you can increase your rental returns. You can also use an Airbnb calculator so you can get a more viable estimate of the rental price that fits your property.
Take care of the legalities
Once you’ve analysed the financial side and you’ve determined that an Airbnb would be profitable, it’s time to act on it. Start by taking care of all the legalities first. You want your property to comply with the local regulations so you’ll be permitted to rent out your property on the Airbnb platform.
Research the taxes that you need to pay. There are tax breaks that you can claim depending on how you declare your property (e.g. as a business, holiday home, etc).
Read about the rental restrictions in London like the 90-day rule. You might need to get planning permission to operate longer days as a short-let. Staying compliant will help you avoid fines and legal issues as you continue to earn from your property.
Among the other things that you have to comply with are the fire and safety regulations, energy efficiency rules, etc. Different locations may have varying rules so be sure to get in touch with your local council to ensure complete compliance.
Choose a hosting strategy
If you’re sure that you’re compliant with all the rules and regulations, it’s time to think about how you’ll operate your Airbnb property. Your hosting strategy can go two ways.
First, you can opt to manage your Airbnb on your own. This is doable since the platform can be managed from anywhere. However, this can be very time-consuming. You have to be available to answer queries. You should also set up the cleaning and maintenance of the properties. These can all take a lot of effort to manage and monitor – all the more if you have more than one property on Airbnb.
Second, you can get a property management company to help. Companies like City Relay offer a full range of services that include property maintenance, marketing campaigns, pricing strategies, cleaning services, guest communications, etc. For a percentage of the rental income, you can enjoy a stress-free hosting experience. If the property management company is also managing other Airbnbs, you can benefit from their reputation as a seasoned host on the platform. This can work in your favour since you’re a new Airbnb host and you have yet to build your reputation online.
When choosing the hosting strategy consider your portfolio goals, available resources and the type of expectations that you have from your Airbnb hosting plans.
Create an Airbnb profile
After you’ve decided on a hosting strategy, it’s time to create an Airbnb profile. This contains the essential information that’ll help potential guests decide if they want to book your property or not.
You can create a profile through the Airbnb platform. After giving your personal information, you’ll need to go through a 3-stage process.
First, you have to define your property and the amenities you offer. Then, you have to set up your listing for marketing purposes. Upload property photos/videos with catchy headlines and a detailed property description. Finally, you have to set the parameters so guests will know what to expect about the place (e.g. pet-friendly, good for families, suitable for events, etc).
After setting up the profile, you can go to the calendar so you can set the availability of the property or block off dates. The last step to complete the profile involves your pricing strategy. Set a fixed price or use the Smart Pricing strategy that allows the system to adjust the price based on market demand.
You’ll also be required to check out the local laws and regulations to ensure compliance. Once everything is in order, click the Finish button and your Airbnb profile will go live.
Set up a system to manage the property and guests
As you wait for guests to book your property, set up a system to help you manage the property and the guests who’ll stay in it. The systems and protocols that you’ll set will define the type of guest experience that you’ll provide. Determine the check-in/check-out process, cleaning and maintenance schedules, emergency procedures and guest communications.
If you are working with a property management company, they probably have a streamlined procedure in place that you can adopt. Discuss the type of property management service that you want to ensure that your property will be well-maintained while your guests have the best booking experience with you.
Market your Airbnb property
At this point, you’re all set to start your Airbnb business. Take your Airbnb profile and market it on your social media accounts. Pay for ads to boost your market reach. Use different platforms so you can reach out to the ideal guests that you want to stay on your property.
Choose professional photos that showcase the best features of your property. Regularly update the photos to ensure that the property looks just like how you market it.
As you host guests in your place, encourage them to leave reviews. You can use these as social proof to convince other people to book a stay. You can also come up with promotional discounts or highlight local events to encourage people to visit London. By being active in your marketing efforts, you’ll increase the chances of increasing your occupancy rates and rental income.
Use the Expertise of an Airbnb Management Company
Starting an Airbnb business in London is very rewarding. While the potential for success is high, it’s essential to set up the business properly to ensure compliance and maximum guest satisfaction.
Fortunately, there’s a way to start without feeling stressed. Partnering with a property management company can make the whole process go smoothly. Companies like City Relay specialise in managing Airbnb properties. You’ll get services like property cleaning and maintenance, 24/7 guest communication, optimised pricing strategy, marketing campaign execution, and many more.
As a seasoned host on the Airbnb platform, you can benefit from City Relay’s trustworthy reputation to attract more guests. Contact us so we can set up your property to achieve success as an Airbnb rental.
