Investing into Airbnb for Beginners: 10 Valuable Lessons Learned

by | Oct 27, 2023 | Airbnb, Property Investing

Embarking on the Property Journey: My Transition from Marketer to Investor

My foray into the property world is relatively recent, but my decade of experience in marketing, particularly in the property sector, has given me unique insights into this dynamic field. Over the past four years, I’ve shifted from not only marketing clients’ serviced and generating over £1m in direct bookings for client’s accommodations to now controlling my own growing portfolio of  serviced accommodations.. This transition has not only been enlightening but has also equipped me with a blend of skills that are invaluable in the Airbnb investment realm.

Tip 1. Understanding the Buy to SA Model

In my relatively short time in property investment, I’ve explored the Buy to Serviced Accommodation (SA) model. This approach involves purchasing properties specifically for use as serviced accommodations or Airbnbs. I’ve learned that targeting a minimum of £2,000 monthly profit is realistic with the right property and location. Success here requires a keen eye for demand and a deep understanding of what makes a location attractive to travellers.

Tip 2. My Insights into BRR to SA: Leveraging Refurbishments

The Buy, Refurbish, Refinance (BRR) method adapted for serviced accommodations is fascinating. While I’m still navigating its complexities, I’ve come to appreciate its potential. This strategy is about more than just purchasing; it’s about adding value and then refinancing to fund future investments. For new investors, understanding this process is crucial for maximising returns and sustaining growth in the Airbnb market.

Tip 3. Rent to SA: A Low Risk Strategy with Lower Entry Barriers

Rent to SA has been a great strategy for drumming up cashflow, offering a gateway into Airbnb investing without the high entry cost of purchasing properties. My investment approach aims for a £1,000 monthly net profit by leasing the property for 3-5 years as a company and then opening it up as a servied acommodation. While simpler in concept, it requires careful negotiation and understanding that you are in a people business,some landlords are open to a company let arrangement and some don’t understand the benefits and it’s new so aren’t open to it. It is important that you go through the benefits with the landlord, guaranteed rent for 3 years with no risk of section 24, professional cleaning arrangements etc.

Tip 4. Selecting the Right Property: Tools and Tips

In my journey, I’ve found that property selection is pivotal. Utilising tools like AirDna, I look for properties that can consistently hit 60% occupancy. I’ve also learned that automating processes, from guest communications to cleaning schedules, significantly improves efficiency and ROI.

Tip 5. Digital Marketing and Guest Experience: My Forte

With my background in marketing, I understand the power of a strong digital presence in attracting direct bookings and reducing dependency on platforms like Airbnb. Equally important is the guest experience. Personal touches, responsive communication, and seamless processes are key to repeat business and glowing reviews, something I’ve emphasised in my own Airbnb properties.

Tip 6. Choosing Property Types: Insights from a Marketing Perspective

The decision between city apartments and countryside homes is more than just location—it’s about understanding market trends and guest preferences. City apartments might offer frequent bookings but come with competitive challenges. Countryside homes, while potentially more lucrative per booking, face seasonal variances. This is where my marketing background plays a critical role in making informed choices.

Tip 7. Pricing Strategies: Finding the Sweet Spot

In setting prices, I’ve found offering long-term stay discounts (like 40% for month-long bookings) strikes a balance between profitability and reduced management hassle. This strategy appeals to a niche market and ensures a stable income stream, important for new investors like myself.

Tip 8. Navigating Early Challenges: Learning from Experience

The journey into Airbnb investing has its share of challenges. From adapting to market shifts to handling operational surprises, my experiences, albeit brief, have been rich with lessons. Learning from these, I aim to guide new investors through similar challenges.

Tip 9. Financial Planning and Budgeting: The Basics

Financial prudence is essential, especially for someone relatively new to the field. I’ve learned the importance of budget management, contingency planning, and understanding the nuances of cash flow in Airbnb investments. For newcomers, these are critical skills to develop from the outset.

Tip 10. The Evolving UK Airbnb Market: A New Investor’s Outlook

The UK’s Airbnb market is evolving, influenced by changing travel preferences and economic factors. As someone who has recently stepped into this arena, I see these changes as opportunities for growth and adaptation. For fellow new investors, staying attuned to these trends is vital.

 

Conclusion: Embarking on Your Airbnb Investment Journey

Whether you’re just starting out like me or looking to expand… your understanding of Airbnb investments, knowledge and adaptability are key. I invite you to download my due diligence calculator for Rent to SA investments, a tool I’ve found invaluable in my own journey. Remember, in this dynamic market, combining property insights with marketing acumen can pave the way for a successful and rewarding investment experience.

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About Leo Simpson

Leo (@leosimpsonofficial) is a Property Investor and Entrepreneur.

Leo runs a six-figure marketing agency helping Airbnb hosts as well as working alongside investors, landlords and estate agents around the UK to help grow investors’ property portfolios.