It's been a year since the very first guest checked into our Airbnb property. The anniversary is a good time to look back at how it's gone.
Recap: why we started an Airbnb
How many guests we've had
Who has booked
What's gone right/what's gone wrong
The money
Lessons learned
Recap: Why we started our Airbnb
There's a long and a short version, I'll stick with the short. We wanted our own place to stay in when we go to the UK. We could probably afford to leave it empty when we're not using it, but empty sounds like waste, and waste doesn't sit well with me. Converting one of our long term rental properties to a short term Airbnb seemed to be a reasonable solution - we'd use it when in the UK and hopefully rent it when we weren't using it. The longer version includes confusion about where we wanted to live, post Brexit visa requirements, and frequently changing our minds, but I think we'd both lose the will to live if I tried to describe all of that!
How many guests we've had
This was one of the big questions ahead of time, what would our occupancy look like given that our place isn't located in a tourist area or a busy metropolitan city?
Well, it's exceeded my expectations. Sally and I used the property for 69 days, leaving 296 days that the property could be rented. Of those, we had paying guests for 223 days, a 75% occupancy rate. In reality, it is close to the maximum that it can be as we've set a minimum stay of 4 nights and require a clear day for the changeovers, so any vacant period of five days or less can't actually be booked.
The occupancy has come from 17 separate bookings ranging from 4 nights (the minimum we allow) up to 40 nights. I'm not sure it makes much sense given the wide range of nights per booking, but dividing the total nights booked by the total number of bookings gives an average stay length of 13 nights.
Who has booked
We didn't know who our customers would be, and wondered if there would be a demand at all. My best guess ahead of time were people working temporarily in the area, house sellers/buyers where the move out/move in dates don't match, someone going through a relationship breakup and, to a lesser extent, people coming to visit family.
While our guests don't tell us why they are booking our property, my detective skills mixed with my best guesses are:
Visits connected to family or friends have driven the largest number of bookings.
We have had people visiting for vacation, something I hadn't expected at all.
I believe two bookings have been from people immigrating to the UK.
One guest was in the moving house situation, where the move out/move in dates weren't in sync.
There may have been other reasons too, but Sally is the Columbo fan 🤦♂️ out of the two of us, so I normally leave the detective work to her.
What's gone right/what's gone wrong
Good news, hardly anything has gone wrong.
On the gone right side of the equation:
We've had a good level of bookings.
There hasn't been any significant damage caused by guests. The few small things have been manageable.
We've lost very few days through cancellations, I think just 10 days during the year.
We found a great lady who does the changeovers for us. This is crucial as we are in a different country. We are very lucky!
The self check in has worked without any problems.
We've had really positive reviews.
We've been able to stay in our own house when we've visited the UK.
On the gone wrong side:
We had a leak, and water started pouring through the kitchen ceiling. Our guest was great and very understanding, but we also gave her a discount because of the inconvenience.
One guest locked themselves out of the house and required a locksmith to gain access.
The app for controlling the heating and hot water has disconnected. Fortunately this isn't a big deal as it's during summer, but we need to fix it before autumn.
I guess coming down the track are some substantial increases to bills, particularly for energy and gas.
The money
Typically I might say "the money...it's the reason we're doing this", but that isn't the whole story. My initial motivation was for the house not to sit empty and unused - I didn't like that the effort, resources and materials that went into building the house were going partly to waste while it's empty. But it's also true that my early retirement calculations were not based on having money tied up in two homes, so the need/want to get some return was there too.
As a comparison, for the last full year that we used the property as a long term rental it generated £8,905. The Airbnb profit of £6,297 was generated from 296 days of availability (remember we used the property ourselves for 69 days), so if I gross up the profit to a full year basis, it comes to £7,764 (£6,297/296 days x 365 days).
Lessons learned
In reality, the first year of operating the property has gone well. We've achieved the objectives of having our own place to stay when we visit the UK, avoided the property being wasted by being left empty when we're not there, and have generated some income.
We've learned that there is a market for an Airbnb property in the town.
As we live remote from the property, the changeover person is critical, and we are very lucky to have such a great person doing this for us. I'm nervous that we don't have a robust contingency plan, but I'm not sure what action we can take.
I suspect we aren't maximising our income, and think we should target to earn no less than when the property was let to long term tenants. I need to research the pricing of other Airbnb properties in our area, but this isn't necessarily the whole story as I don't know their occupancy rates. Airbnb have a Smart Pricing where Airbnb adjust the price based on various factors including demand - we haven't switched this setting on but I'm tempted to do so within preset upper and lower price limits.
Summary
It's been a decent first year. We've achieved our objectives of having our own place to stay in the UK, avoided an unused and therefore wasted house, and generated some income. What this review has taught me is that we should probably be making a better return, so I want to experiment with the pricing, which hopefully won't impact occupancy but will increase income. And we need to keep our changeover lady happy.
