Short-term rental (STR) businesses are an ever more attractive choice for people to get into the property game. More and more investors and homeowners are realising and reaping the benefits of renting out short-term rental properties.
All kinds of people use short-term rentals for many reasons, such as vacations, business trips and weekend breaks. And because short-term rentals are priced by the night on a daily, weekly or monthly basis, property owners can charge more. And the opportunities are boundless.
In this article, we’ll guide you through how to set up your own short-term lettings business the right way. And we’ll discuss how to select the best Airbnb management service to help you navigate and yield maximum results from your new business.
Set up your business.
Setting up your business the right way lays the groundwork for a successful short-term lettings business in the long run. Several aspects are important to consider.
1. Create a business plan.
As with any business plan, you should have short-term and long-term goals. Having a blueprint to work from is standard practice for anyone who wants to create a successful long-term business. Your business plan should have specific, measurable, actionable, realistic and time-bound (SMART) goals to help you keep on track. These should include monthly and annual goals.
One of the most important aspects is including a detailed analysis of the expenses involved. While potentially lucrative, short-term rentals also come with extra costs that traditional long-term letting doesn’t.
Frequent use of utilities and appliances, regular cleanings and consistent maintenance are only a few mentions of the work involved in a successful short-term lettings business. Making sure your business plan has a detailed and accurate analysis will help you better manage your ingoings and outgoings as you build your business.
2. Decide whether to set yourself up as a sole trader or a limited company.
An essential aspect of setting up a successful short-term lettings business is establishing whether you’ll be a sole trader or a limited company. There are a few things to consider here.
Renting out as a limited company means the business receives rental income, and then your company pays tax in the form of corporation tax. You’ll pay yourself a salary as an employee of the company along with other aspects.
As a sole trader or individual, there’s no distinction between yourself and your business. You’ll pay income tax on all the income the business receives.
You can use sites like GetGround for sound education on property rentals as a business in the UK.
Choose a location.
“Location, location, location!” Some places are better than others when it comes to setting up your short-term lettings business. It’s one of the most important factors you’ll need to consider. And you’ll want to choose a location based on several key factors, such as:
● Your rental target audience (vacations, business trips, backpackers, etc).
● Affordability.
● Ease of reach.
The best locations for Airbnb in the UK are the major towns and cities that are frequently visited for vacation, business, and weekend breaks especially. London, Manchester, Brighton, Bath and Bristol are all up there. But while these places look attractive, there’s also more competition in these areas.
We recommend choosing a place you know and that is convenient for you, then doing detailed data research on the property market there. Airbnb investment property research can help you identify the best areas for various types of stays. A good site for rich short-term rental data and detailed insights is AirDND.
Check regulations.
While researching and choosing the suitable locations for you to set up your short-term lettings business, you’ll need to check the specific short-term rentals regulations. Each town and city has its own regulations. The regulation most considered for those in the short-term lettings business and with Airbnb investment property is the number of days they’re allowed to let out their properties per year.
Read Houst’s article for more insight into the 90-day Airbnb rule introduced in 2017 for Greater London.
Select a management strategy.
There’s no denying that while a short-term lettings business can be highly profitable, there’s more work involved. Airbnb profile management, regular cleaning and maintenance and a high frequency of guests going in and out of your Airbnb investment property are just a few aspects of running a successful short-term lettings business.
Ask yourself:
● How will you handle guest enquiries, booking confirmations, calendar updates and guest arrivals?
● Who will take care of the constant cleaning of your short-term rentals?
● Who will take care of the regular necessary maintenance and repairs?
● How will you operate an effective business where guests will give you consistent 5-star reviews?
There’s a lot to consider. But it doesn’t all have to be hard work. As more and more investors and property owners get into the short-term lettings business, an increasing number of property management businesses have come on the scene to help property owners with short-term rental management.
From property listings to checking guests to regular maintenance, short-term rental management businesses like Houst have an Airbnb management service that can help you manage your short-term lettings businesses effectively.
They help manage every aspect of the business for thousands of short-term rentals in London, Brighton, Bath, Bristol and Manchester. They can manage everything for you, saving you precious time and energy that can be channelled into growing the business.
Understand how pricing works.
Understanding how pricing works for short-term rentals is key to maximising profits. Several major aspects, such as location and seasonality, play a pivotal role. There’s data you can read and people who understand the system inside out who can help you earn more while keeping high occupancy rates.
Houst's pricing team constantly monitors and adjusts prices daily to maximise your profit. They use all the major factors to consistently keep your properties occupied while delivering the best rates possible.
List on booking sites.
Your Airbnb investment property should also be listed across the other major platforms. Listing and managing your properties on other booking sites can increase your occupancy rates, reviews and earnings.
But listing across various booking sites comes with more work. Houst’s short-term rentals management can list your properties on all the major booking sites for you with an easy-to-use calendar that seamlessly synchronises them. This makes the job easy and takes the stress out of property listing.
Choose a software platform to manage it all.
You need constant, effective management to run your short-term rental business successfully. As attractive and highly lucrative as the business model is, no one ever said it was easy. But it’s made simpler and easier with a software platform.
Using a modern professional software platform to bring together and manage the key aspects of an effective and successful short-term rental business can prove to be a great help. The best ones allow you, the property owner, to oversee everything. The Houst dashboard will enable you to manage your calendar and speak with your property manager directly. And you can see who’s staying in your property, check the cleaning schedule and more.
