FAQ: Agency.CapeHolidays Management Services
FAQ’s Excellent question, “how much can I make on Airbnb?” when you intend to list on Airbnb. But what about the Airbnb income calculator? You get some great Airbnb profitability calculators; they tend to only use your property address and the number of bedrooms to calculate your Airbnb profitability. Well, let’s look at…. Airbnb’s own free calculator. For example; look at a two-bedroom in Cape Town. Airbnb suggests a monthly R26 531 (or +R300 000 or $22000 per annum). This is optimistic, to say the least. What about occupancy? I see the norm is a low 37% occupancy. Did they calculate this income at 100% occupancy? I just have too many questions. And you should as well. Personally, I believe the calculators may be designed to lull you into listing your accommodation as very few people in Cape Town would not list their accommodation on Airbnb if they can get the above. You may even consider buying a property because of the high potential Airbnb income. Mistake. We believe you must crawl before you run. And let’s rather be conservative. And consider other factors as well. Your potential income cannot be based on your neigbourhood and number of rooms only; yes, it’s a good start but what about the host’s attitude towards guests, your rules (minimum stays, cancellation policy, discounts, etc.), your location in relation to the beach (or related major attractions), pool, jacuzzi, features, willingness to invest in staging and professional photos? And the list of critical Airbnb income drivers grows. It is for this reason that we developed an in house Airbnb quiz to try and determine if your Airbnb accommodation will make money. No bull. The quiz, obviously, depends on your honesty. But the verdict will be better than using an Airbnb profitability calculator. It may not answer your question; How much can I make on Airbnb? Calculator. No. But when you get the results from the Airbnb Profitability Quiz you will know; if your Airbnb accommodation will make money or not and what you need to correct it. How to set prices on Airbnb, within reason, maximise income is quite simple if you follow a strategy that works. This means you should focus on occupancy and not setting high rates, on getting more reviews and eliminating resistance to book. Read the following FAQ where I discus high rates and time-to-action (demand). Read FAQ (Will I Make Money Setting High Rates On Airbnb) To set prices on Airbnb depends on the number of reviews we have and the established demand. Assuming we list a new property with no reviews and the owner wants to maximise income annually; we go through the following with the owner: Airbnb Pricing Strategy Philosophy Part 1 Airbnb Seasonal Rate Calculator Part 2 The obvious question is- how many bedrooms should my Airbnb ideally have? My quick answer is that the number of bedrooms is a driver when trying to make money with Airbnb. But! If everything is not equal; then other drivers are more important. Like The Following Airbnb Success Drivers: Location: Critical. We have two beautiful apartments against the mountain. The two-bedroom is royal but seventy steps up, with spectacular views. The one-bedroom is as great but at 15 steps only, also with views. However, income is not really different. Interior and outside living: Guests pay premiums for funky or modern places with sun-filled light and inviting living areas. Imagine sun-loungers and a deck. It sells. Water: I mentioned beach location; if you cannot bring the beach to your Airbnb accommodation then try a pool or hot tub. And it does not matter if the sea is just 50 meters away. Airbnb guests will pay a premium for water. Marketing Philosophy and Rules: You cannot measure your Airbnb success until you have learned by failing. Going in with an attitude of…. “why do they need a pool? Can they not see the sea?”, or “who wants to watch DSTV on holiday?” or guests “must pay high rates; I pay high rates at hotels!” or “they should stay a minimum seven days!” These comments are shortsighted and show ignorance. And will cost you dearly. It matters only if they look exactly the same, at the same location, with a similar interior. If not, then most of the drivers above are critical. For more on investment advice: Airbnb Cape Town Airbnb success drivers, I suggest you complete our free questionnaire. The questions we ask will assist in getting a better idea. And you may be surprised to know that your Airbnb rule sets may be a killer driver. After you completed the questionnaire our calculator crunches “numbers” and sends you a report; automatically emailed to you. More below. P.S. One bedrooms have a disadvantage as the change over costs for a one-bedroom Airbnb is as much as it is for a two-bedroom and even three bedrooms. Two-Bedroom change-over costs nearly as much as a 4 bedroom but if you give me two two-bedroom apartments next to each other then I take two x2. I’ll rent them as a 4 bedroom or 2x two bedrooms. But, I suppose this is not the only way to look at it. Now we are opening-up flexibility as a driver. See FAQ on flexibility here. But let me stress: we should never focus on cost. Cost should be driven down but be careful. Cost is a negative concept. If your one bedroom has everything I mentioned above and via the questionnaire then a one-bedroom can beat the best. Win Unhassles Airbnb eBook & Plus Advice Worth R10000 Let’s start with what is maximise income?” Maximising income is quite simple if you follow a strategy that works. This means you should focus on occupancy and not setting high rates, and on getting more reviews (trust) and eliminating all resistance to book . Read the FAQ (1) where I discuss high rates and time-to-action (demand). To set prices on Airbnb it depends on the number of reviews we have and the established demand. Assuming we list a new property with no reviews and the owner wants to maximise income annually; we go through the following with the owner: Airbnb Pricing Strategy Philosophy Part 1 Airbnb Seasonal Rate Calculator Part 2 Let’s consider the following email from a new owner with a lovely 4 bedroom accommodation in Simonstown. She would not be able to manage her home or market it. This is what she told me after I asked her for her annual income expectations: New Owner The financial data was as follows for the period May 2018 to June 2019 – 12 months. The loft room was booked for 191 nights at an average of 752 rand per night and generated 143697 rands for the year. The garden suite was booked for 181 nights and had an average nightly revenue of 1419 and generated 256921k for the year. Total revenue after booking sites costs was 400618k. New Owner This is really an achievement. Agent CapeHolidays Interesting. And your logic makes sense. Obviously we need to see the home. And I believe if it gets foolproof remarkable interior with lots of flexibility like 8 single beds (can be made in Kings), for example, then it should exceed our own expectations. These are the homes we prefer. Looking at the figures you shared the owner is doing 50% occupancy during the year for both properties. Excellent. And a good sign. This means even higher occupancy/rates during summer as winter is relatively dead. The average Airbnb occupancy for this area is much lower. Obviously ours are on average 20% higher and winners a lot higher. But it took about 12 months of building trust with each property to get there. New Owner I would consider this a benchmark to use and hopefully surpass as the entire house would now be available at time that we are not there, this obviously also depends on when we plan to use it too. For now my view is that we should be able to add a further 200k to the value above. To answer your question we would expect to achieve a minimum of what has been achieved historically and add up to 100k on top of this after costs and achieve a gross 550k before your 20% costs. This is a view based on the data we have, I am sure you will have a view, please could you give us your opinion and experience. Reasonable! Who would argue? Agent CapeHolidays Due to various issues (like meeting expectations) we only start off a new home if we can achieve the owner’s goal at 35% occupancy. This does not mean we will not try and beat it. But agreeing to a new house where 50% occupancy is required, to achieve the R550 000 goal, then we may disappoint you before we start. And that’s not fair on you. Agreeing at the kickoff stage to higher occupancy than what is our norm will cause pressure to maximising rates rather than working on getting trust, and adjusting rates to address occupancy based on supply and demand during the first 12 months.[/su_highlight I must say that I am confident we can achieve 50% and higher occupancy to meet and exceed R550 000 but why make a promise just to keep the owner happy? Why not rather exceed expectations after 12 months? Our Motto We don’t have to be the biggest accommodation agency in Cape Town or Simonstown! No. We only want to be the best! This implies that we can walk away; as we are not trying to win a deal at all costs. No. We rather shake hands and walk. Ensuring we will always look the owner in the face knowing we did what was best for both parties. Excellent question, “how much can I make on Airbnb?” when you intend to list on Airbnb. But what about the Airbnb income calculator? You get some great Airbnb profitability calculators; they tend to only use your property address and the number of bedrooms to calculate your Airbnb profitability. Well, let’s look at…. Airbnb’s own free calculator. For example; look at a two-bedroom in Cape Town. Airbnb suggests a monthly R26 531 (or +R300 000 or $22000 per annum). This is optimistic, to say the least. What about occupancy? I see the norm is a low 37% occupancy. Did they calculate this income at 100% occupancy? I just have too many questions. And you should as well. Personally, I believe the calculators may be designed to lull you into listing your accommodation as very few people in Cape Town would not list their accommodation on Airbnb if they can get the above. You may even consider buying a property because of the high potential Airbnb income. Mistake. We believe you must crawl before you run. And let’s rather be conservative. And consider other factors as well. Your potential income cannot be based on your neigbourhood and number of rooms only; yes, it’s a good start but what about the host’s attitude towards guests, your rules (minimum stays, cancellation policy, discounts, etc.), your location in relation to the beach (or related major attractions), pool, jacuzzi, features, willingness to invest in staging and professional photos? And the list of critical Airbnb income drivers grows. It is for this reason that we developed an in house Airbnb quiz to try and determine if your Airbnb accommodation will make money. No bull. The quiz, obviously, depends on your honesty. But the verdict will be better than using an Airbnb profitability calculator. It may not answer your question; How much can I make on Airbnb? Calculator. No. But when you get the results from the Airbnb Profitability Quiz you will know; if your Airbnb accommodation will make money or not and what you need to correct it. The obvious question is- how many bedrooms should my Airbnb ideally have? My quick answer is that the number of bedrooms is a driver when trying to make money with Airbnb. But! If everything is not equal; then other drivers are more important. Like The Following Airbnb Success Drivers: Location: Critical. We have two beautiful apartments against the mountain. The two-bedroom is royal but seventy steps up, with spectacular views. The one-bedroom is as great but at 15 steps only, also with views. However, income is not really different. Interior and outside living: Guests pay premiums for funky or modern places with sun-filled light and inviting living areas. Imagine sun-loungers and a deck. It sells. Water: I mentioned beach location; if you cannot bring the beach to your Airbnb accommodation then try a pool or hot tub. And it does not matter if the sea is just 50 meters away. Airbnb guests will pay a premium for water. Marketing Philosophy and Rules: You cannot measure your Airbnb success until you have learned by failing. Going in with an attitude of…. “why do they need a pool? Can they not see the sea?”, or “who wants to watch DSTV on holiday?” or guests “must pay high rates; I pay high rates at hotels!” or “they should stay a minimum seven days!” These comments are shortsighted and show ignorance. And will cost you dearly. It matters only if they look exactly the same, at the same location, with a similar interior. If not, then most of the drivers above are critical. For more on investment advice: Airbnb Cape Town Airbnb success drivers, I suggest you complete our free questionnaire. The questions we ask will assist in getting a better idea. And you may be surprised to know that your Airbnb rule sets may be a killer driver. After you completed the questionnaire our calculator crunches “numbers” and sends you a report; automatically emailed to you. More below. P.S. One bedrooms have a disadvantage as the change over costs for a one-bedroom Airbnb is as much as it is for a two-bedroom and even three bedrooms. Two-Bedroom change-over costs nearly as much as a 4 bedroom but if you give me two two-bedroom apartments next to each other then I take two x2. I’ll rent them as a 4 bedroom or 2x two bedrooms. But, I suppose this is not the only way to look at it. Now we are opening-up flexibility as a driver. See FAQ on flexibility here. But let me stress: we should never focus on cost. Cost should be driven down but be careful. Cost is a negative concept. If your one bedroom has everything I mentioned above and via the questionnaire then a one-bedroom can beat the best. Win Unhassles Airbnb eBook & Plus Advice Worth R10000 Excellent question, “how much can I make on Airbnb?” when you intend to list on Airbnb. But what about the Airbnb income calculator? You get some great Airbnb profitability calculators; they tend to only use your property address and the number of bedrooms to calculate your Airbnb profitability. Well, let’s look at…. Airbnb’s own free calculator. For example; look at a two-bedroom in Cape Town. Airbnb suggests a monthly R26 531 (or +R300 000 or $22000 per annum). This is optimistic, to say the least. What about occupancy? I see the norm is a low 37% occupancy. Did they calculate this income at 100% occupancy? I just have too many questions. And you should as well. Personally, I believe the calculators may be designed to lull you into listing your accommodation as very few people in Cape Town would not list their accommodation on Airbnb if they can get the above. You may even consider buying a property because of the high potential Airbnb income. Mistake. We believe you must crawl before you run. And let’s rather be conservative. And consider other factors as well. Your potential income cannot be based on your neigbourhood and number of rooms only; yes, it’s a good start but what about the host’s attitude towards guests, your rules (minimum stays, cancellation policy, discounts, etc.), your location in relation to the beach (or related major attractions), pool, jacuzzi, features, willingness to invest in staging and professional photos? And the list of critical Airbnb income drivers grows. It is for this reason that we developed an in house Airbnb quiz to try and determine if your Airbnb accommodation will make money. No bull. The quiz, obviously, depends on your honesty. But the verdict will be better than using an Airbnb profitability calculator. It may not answer your question; How much can I make on Airbnb? Calculator. No. But when you get the results from the Airbnb Profitability Quiz you will know; if your Airbnb accommodation will make money or not and what you need to correct it. How to set prices on Airbnb, within reason, maximise income is quite simple if you follow a strategy that works. This means you should focus on occupancy and not setting high rates, on getting more reviews and eliminating resistance to book. Read the following FAQ where I discus high rates and time-to-action (demand). Read FAQ (Will I Make Money Setting High Rates On Airbnb) To set prices on Airbnb depends on the number of reviews we have and the established demand. Assuming we list a new property with no reviews and the owner wants to maximise income annually; we go through the following with the owner: Airbnb Pricing Strategy Philosophy Part 1 Airbnb Seasonal Rate Calculator Part 2 The obvious question is- how many bedrooms should my Airbnb ideally have? My quick answer is that the number of bedrooms is a driver when trying to make money with Airbnb. But! If everything is not equal; then other drivers are more important. Like The Following Airbnb Success Drivers: Location: Critical. We have two beautiful apartments against the mountain. The two-bedroom is royal but seventy steps up, with spectacular views. The one-bedroom is as great but at 15 steps only, also with views. However, income is not really different. Interior and outside living: Guests pay premiums for funky or modern places with sun-filled light and inviting living areas. Imagine sun-loungers and a deck. It sells. Water: I mentioned beach location; if you cannot bring the beach to your Airbnb accommodation then try a pool or hot tub. And it does not matter if the sea is just 50 meters away. Airbnb guests will pay a premium for water. Marketing Philosophy and Rules: You cannot measure your Airbnb success until you have learned by failing. Going in with an attitude of…. “why do they need a pool? Can they not see the sea?”, or “who wants to watch DSTV on holiday?” or guests “must pay high rates; I pay high rates at hotels!” or “they should stay a minimum seven days!” These comments are shortsighted and show ignorance. And will cost you dearly. It matters only if they look exactly the same, at the same location, with a similar interior. If not, then most of the drivers above are critical. For more on investment advice: Airbnb Cape Town Airbnb success drivers, I suggest you complete our free questionnaire. The questions we ask will assist in getting a better idea. And you may be surprised to know that your Airbnb rule sets may be a killer driver. After you completed the questionnaire our calculator crunches “numbers” and sends you a report; automatically emailed to you. More below. P.S. One bedrooms have a disadvantage as the change over costs for a one-bedroom Airbnb is as much as it is for a two-bedroom and even three bedrooms. Two-Bedroom change-over costs nearly as much as a 4 bedroom but if you give me two two-bedroom apartments next to each other then I take two x2. I’ll rent them as a 4 bedroom or 2x two bedrooms. But, I suppose this is not the only way to look at it. Now we are opening-up flexibility as a driver. See FAQ on flexibility here. But let me stress: we should never focus on cost. Cost should be driven down but be careful. Cost is a negative concept. If your one bedroom has everything I mentioned above and via the questionnaire then a one-bedroom can beat the best. Win Unhassles Airbnb eBook & Plus Advice Worth R10000 Let’s start with what is maximise income?” Maximising income is quite simple if you follow a strategy that works. This means you should focus on occupancy and not setting high rates, and on getting more reviews (trust) and eliminating all resistance to book . Read the FAQ (1) where I discuss high rates and time-to-action (demand). To set prices on Airbnb it depends on the number of reviews we have and the established demand. Assuming we list a new property with no reviews and the owner wants to maximise income annually; we go through the following with the owner: Airbnb Pricing Strategy Philosophy Part 1 Airbnb Seasonal Rate Calculator Part 2 Let’s consider the following email from a new owner with a lovely 4 bedroom accommodation in Simonstown. She would not be able to manage her home or market it. This is what she told me after I asked her for her annual income expectations: New Owner The financial data was as follows for the period May 2018 to June 2019 – 12 months. The loft room was booked for 191 nights at an average of 752 rand per night and generated 143697 rands for the year. The garden suite was booked for 181 nights and had an average nightly revenue of 1419 and generated 256921k for the year. Total revenue after booking sites costs was 400618k. New Owner This is really an achievement. Agent CapeHolidays Interesting. And your logic makes sense. Obviously we need to see the home. And I believe if it gets foolproof remarkable interior with lots of flexibility like 8 single beds (can be made in Kings), for example, then it should exceed our own expectations. These are the homes we prefer. Looking at the figures you shared the owner is doing 50% occupancy during the year for both properties. Excellent. And a good sign. This means even higher occupancy/rates during summer as winter is relatively dead. The average Airbnb occupancy for this area is much lower. Obviously ours are on average 20% higher and winners a lot higher. But it took about 12 months of building trust with each property to get there. New Owner I would consider this a benchmark to use and hopefully surpass as the entire house would now be available at time that we are not there, this obviously also depends on when we plan to use it too. For now my view is that we should be able to add a further 200k to the value above. To answer your question we would expect to achieve a minimum of what has been achieved historically and add up to 100k on top of this after costs and achieve a gross 550k before your 20% costs. This is a view based on the data we have, I am sure you will have a view, please could you give us your opinion and experience. Reasonable! Who would argue? Agent CapeHolidays Due to various issues (like meeting expectations) we only start off a new home if we can achieve the owner’s goal at 35% occupancy. This does not mean we will not try and beat it. But agreeing to a new house where 50% occupancy is required, to achieve the R550 000 goal, then we may disappoint you before we start. And that’s not fair on you. Agreeing at the kickoff stage to higher occupancy than what is our norm will cause pressure to maximising rates rather than working on getting trust, and adjusting rates to address occupancy based on supply and demand during the first 12 months.[/su_highlight I must say that I am confident we can achieve 50% and higher occupancy to meet and exceed R550 000 but why make a promise just to keep the owner happy? Why not rather exceed expectations after 12 months? Our Motto We don’t have to be the biggest accommodation agency in Cape Town or Simonstown! No. We only want to be the best! This implies that we can walk away; as we are not trying to win a deal at all costs. No. We rather shake hands and walk. Ensuring we will always look the owner in the face knowing we did what was best for both parties. |