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Learning how to start an Airbnb business is a straightforward process. While there are several things to consider, it’s a venture that could lead to significant rental earnings.
Of course, starting an Airbnb business is not just about getting a property added to Airbnb listings. You have to know what property type to get, how to prepare and price it, what legal requirements apply to short-term rentals, and many more.
In this article, you’ll get the answers to common questions asked by potential hosts. You’ll get a better understanding of what it takes to succeed as an Airbnb host, how to stay compliant and what to expect when running an Airbnb business.
What Are the Legal Requirements for Airbnb Hosting in London?
London’s housing issues led to several regulations imposed on short-term rentals like Airbnb properties. Before starting an Airbnb business, it’s important to understand all the legal requirements and local laws to keep your property fully compliant. Otherwise, you might face penalties and be kept from operating as a short-term rental.
Among the legal requirements you need to consider are:
- 90-day rule where rentals aren’t allowed to get short-term bookings for more than 90 days in a year.
- Planning permission involves updating the “use class” of the property so it will be allowed to accept short-term bookings beyond the 90-day limit.
- Eligibility for short-term letting involves meeting the hosting, property and business eligibility criteria before being allowed to operate as a short-term rental.
- Health and safety certificates that include gas safety certificates, fire risk assessments, EICR for electrical installations, etc.
To stay compliant, property owners should follow all the local rules and regulations. This means you are legally required to get carbon monoxide detectors installed and put fire extinguishers in crucial areas within the property.
Find out more about how to make your Airbnb property compliant.
What Property Type is Best for Airbnb?
One of the first steps to start an Airbnb business is to determine which of the property types will get the most bookings. This decision will require you to look at several factors.
First, think about the location. There are places in London where small flats are in demand, especially when they’re near business hubs. Some areas would require more than 1 bedroom to make it appealing to guests and travellers.
Second, consider the demand in the area you want to buy. There are areas in London where people prefer at least 3-bedroom units to have enough space for a family. Then there are areas where a 1-bedroom is good enough for the business professionals looking for a place to stay.
Third, you should consider the people who will be staying in your vacation rental. If you want to attract families, you’ll need a bigger space for that. But if you want to focus on students or business professionals, they won’t mind a smaller unit to live in.
Do a thorough research before you decide. Don’t just focus on the profitability of your Airbnb business. You should also consider the property management and operations involved in Airbnb hosting.
Discover which is the best rental property type: a studio, 1-bedroom or 2-bedroom.
What Can I Do to Prepare My Property?
Preparing your property is crucial to maintaining high occupancy rates. Here are the key tasks you should complete before you start your Airbnb business.
- Market Research. Know the local demand and competition before you start. Check out similar properties and see how much they’re charging as a nightly rate. Look at the photos of properties near to see what your property is up against.
- Furnishing and Decor. The visual appeal of your property is important in getting more bookings. It also plays a role in providing the best experience for your guests. Invest in high-quality furnishing and decor so potential guests can choose you over nearby Airbnb rentals.
- Safety measures. It’s your responsibility to keep your guests safe. Make sure your property meets the health and safety standards by installing carbon monoxide detectors, fire extinguishers, smoke alarms, etc. Prepare a guide that contains the house rules and emergency manual.
- Photography. Take high-quality photos to show the best features of your property. Focus on areas that potential guests would look for when choosing the best place to stay.
- Listing Details. Write a compelling and accurate description of your property and post it on your Airbnb profile. Use catchy descriptions to make your listing stand out.
- Property management. Managing and running an Airbnb business involves several tasks. This includes cleaning and maintenance as well as guest communications. Come up with a streamlined process to manage your property and make sure it’s always ready for the next booking.
Learn more about preparing your property by getting tips on how to maintain your property between bookings.
How Can I Set a Competitive Nightly Rate?
A competitive nightly rate combines affordability and profitability. You want the property to be as affordable as possible for your target guest market while maximising profitability.
To set the right nightly rate for your Airbnb property, check similar Airbnb listings nearby. Consider the location, property type, seasonality and amenities offered. These will help you determine how much you should charge your guests.
Use dynamic pricing tools to adjust your rates based on demand and season. You can also get the help of a property management company for their pricing expertise.
Here’s a resource you can use to set the right rental price for your property.
How Do I Improve the Guest Experience?
Set up your property so it provides memorable experiences for your guests. This is the key to getting positive reviews. The more you get raving reviews, the higher the chances of getting more bookings. After all, most people looking for a place to stay would read reviews before making a booking decision. So give your guests a great experience so they can help you get more bookings.
How can you do that?
Start by making sure your property meets the guest’s expectations. Make sure your property is compliant, visually appealing, relaxing and has everything your guests would need.
You can also go over and beyond a typical host. If you can be more lenient with their check-in and check-out time, as long as it doesn’t interfere with bookings.
Think about add-on services that won’t just meet the needs of your guests but also increase your profits. Be quick with guest communications and address inquiries and concerns promptly.
All these contribute to a superior guest experience that would lead to long-term benefits.
Find out how to secure 5-star reviews from your guests.
What Are the Tax and Financial Considerations?
Since you’re earning income from your Airbnb property, you have tax obligations to fulfil. The most prominent is the income tax. There are income allowances and deductions that can reduce your tax payments, so make sure you take advantage of them.
Keep a detailed record of all your earnings and expenses. The latter can be useful when you’re calculating how much tax you owe. You can get in touch with a tax professional so they can educate you on how much you should be paying after all the deductions are made.
Here’s an Airbnb tax guide you can read for further information.
Should I Get a Professional Property Management?
Running an Airbnb business takes a lot of work and dedication. If you can’t commit to your full-time, you can always get a professional property management company to help.
These companies are experts in managing short-term rentals. City Relay, for instance, has managed more than 2,000 properties in London. Their experience led to a streamlined property management process that results in maximum rental income and high occupancy rates.
They also have an in-house housekeeping and maintenance team to help keep Airbnb properties in premium condition. Apart from cleaning and maintenance, they have a team to handle guest inquiries and communication. They also help with compliance issues to ensure all properties are 100% compliant with local laws.
Working with a reputable property management company leads to a stress-free Airbnb hosting experience. It allows you to focus on other ventures while your property operates efficiently.
Find out how a property management company can enhance your investment.
Start a Successful Airbnb Business
Starting an Airbnb business in London opens a promising opportunity for property owners like you. As long as you abide by the legal requirements, prepare your property for short-term renting and prioritise guest satisfaction, you can thrive and make your Airbnb business a huge success.
Partnering with a property management company like City Relay will make your hosting journey easier and hassle-free. Find out how City Relay can customise property operations so you can meet your unique investment goals.
Get a free rental estimate to discover your property’s income potential.
