Make Money on AirBnb without owning property. Arbitrage #askshaf
Shaf Rasul
Serial Entrepreneur, Business Mentor & Columnist. Investor & Dragons Den Star, Investing in Technology & Property.
Welcome back to Ask Shaf and my little mini series on AirBnB. Everyone is feeling the pinch at the moment and we’ve been checking out how you can make money through accommodation website AirBnB. You can get involved by becoming a host online and renting a room and we’ve also discovered how you can make money through the site without owning any property. Today, I want to take a closer look at one of these ways and the good news is, it won’t cost you much to get started…
If you missed the other two videos in this miniseries check them out below:
https://youtu.be/XA-44_Btp_g
https://youtu.be/m5bdSEbIasE
I’m also doing a NEW SERIES OF Videos on Common Property Scams Please subscribe to my YouTube channel. Link is here so you can be notified when the new series goes live.
Have you ever heard of arbitrage? It’s an economic term, and it means buying stock from one marketplace and immediately selling it for a profit on another. A good example is shares on the New York Stock Exchange selling for one price and simultaneously trading at a higher price on the FTSE. Buy them from New York, and straight away sell them in London. The difference is your profit.
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You might be wondering what this has to do with AirB&B and how it’s going to make you money. Like I said, you don’t need much to get started. You rent a property from a landlord, list it on AirBnB and the difference is your profit.
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There are a few caveats to this and they are vitally important. Firstly, do not try to do this behind the back of your landlord. Just don’t risk it. Be honest before you sign a lease. Secondly, make sure you have suitable insurance in place. Don’t assume a regular policy covers you for this, you need to be certain. Thirdly, check rules on short-term letting with your local authority as they can vary up and down the country. Next, it’s always worth speaking to a lawyer and accountant to keep yourself right with the legal side of things and what it could mean for your tax.
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To make money from AirBnB in this way, you need to find the right properties and the right landlord. Whole properties will make you the most profit so do your research. You know your city, and you’ll know where the attractions are. This could be a certain museum or football ground or proximity to the main station or airport. Have a look at properties already listed on the site and see which ones in these areas are well-occupied. That will give you a good idea of where you should be looking. Think about your profit margins. Let’s say you will be paying ￡1,000 a month in rent. You expect it to be occupied for at least 15 nights a month at ￡100 a night, giving you ￡1,500. That’s ￡500 profit.
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Once you’ve decided on your area, check what properties are up for rent and contact the landlord with your plans. Don’t forget to only consider furnished places. Shelling out for beds, chairs, sofas and tables is not part of the plan!
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If they are happy to go ahead and you’ve considered the factors I’ve already mentioned, then you can create your property’s profile on the AirBnB website. You register as a host, it’s very user-friendly. It’s vital to have good pictures on your listing, this will definitely increase the number of views, and hopefully lead to more bookings. Once your guests start coming through the doors, you will be responsible for managing and cleaning the property. If things go well, you can grow the number of properties in your AirBnB portfolio. You never know, your landlord may agree for you to do the same with other properties they own.
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AirBnB has transformed an entire industry, but they’ve done it without actually owning any properties or real estate. And you too could benefit without owning any properties. If this is something you are interested in, I urge you to consider your options and plan meticulously. One option that you’d be crazy to ignore is the subscribe button for my YouTube channel. Make sure you hit it and you’ll enjoy a whole load more advice from me, and it’s all free!