Air BnB Management for my whole house? (vs traditional letting)

delmonta

Hi

I currently own a 3 bedroom victorian terraced house in Bristol. It has a lounge which could be a 4th bedroom too. I own it outright, no mortgage.

I have been renting it out on a long term basis with an agent managing it for a 12% fee. This makes me about £1000 a month after they take their cut etc. But my tenants are about to move out, and I considered another option.....

There are local companies who manage the property for short term lets through Air BnB. This seems to be something fairly common now. Apparently you can make twice as much this way depending on your house, the location etc. They also take 12% but they don't make anything unless it's rented out. So they have big incentive to get it rented too, as nobody get's anything unless it gets rented. It seems to me these Air BnB management companies will be doing a lot more work than my agents for the same cut! My agents have to do next to nothing, where as these guys will be constantly taking bookings, meeting people, getting cleaners, managing my profile etc. Seems a much better deal

I am wondering if anyone has any real life experience with doing this or could offer any advice? The company seem very helpful and trustworthy, but I dont want to go through the hassle of setting it all up, and getting rid of my current agents unless I make a substantial amount more money!

So my questions are :

- Would I need special insurance? I currently have landlords insurance, but not sure how that works in regards to short term lets on a constant basis

- Would it be best to rent out each room seperately with the shared kitchen and bathroom, or the whole house?

- Is there much of a market for people renting a whole house for short term lets? My fear is it could be empty a lot

- Considering I would have to pay water, gas, electricty, internet bills etc., 12% to the management, is it really possible to make much more money than I am currently? I could definitely get £30-40 for each room a night based on what I have seen on Air BnB, but I have no idea how consistent this would be.

- Am I missing any other obvious things to do with this setup, maybe tax related etc?

If anyone can give any advice, I would greatly appreciate it. I am meeting with someone from the company tomorrow to look at the house together. Of course they will tell me it's a great idea! But I would prefer some real advice! I plan to live out of the country for long periods of time, and I'm not sure if one of these setups would make more sense.

thanks in advance

theartfullodger

Read these 5 items...
http://www.landlordlawblog.co.uk/2016/11/07/airbnb-renting-law-good-bad-ugly/

http://www.landlordlawblog.co.uk/2016/10/31/airbnb-renting-law-legal-obligations/

http://www.landlordlawblog.co.uk/2016/10/24/airbnb-renting-law-occupation-types/

http://www.landlordlawblog.co.uk/2016/10/17/airbnb-renting-law-introduction/

http://www.landlordlawblog.co.uk/2016/10/19/airbnb-renting-law-right-to-rent/

Regardless of the paperwork you are probably/possibly granting AST tenancies which, if occupant chooses not to leave may take some time to evict... perhaps 41 weeks plus.. Right to rent checks....

But, perhaps the salesman (that's what he is..) will tell you different..

Ask your mortgage lender their view: Then your insurers....

delmonta

Thanks for those links, very useful.

To be honest, I am not that worried about someone renting a room on AirBnb and refusing to leave. It seems incredibly unlikely, and I would just deal with it myself if it happened!

I do not have a mortgage, I own the house outright.

I am nervous about making such a big change, as I have a simple setup now that brings me regular rent. But I also have a chronic problem which has stopped me working for the time being, and if it was really possible to make twice as much this way, I could send my step daughter to the school me and my partner really want to.

But in theory I can see how Short lets at £30-£40 a room a night could be very lucrative, if managed well?

G_M

It's a whole different business, with different regulation, different tax regime etc.

Basically (as I understand it) holiday lets.

Start doing your research........

ModernSlave

Hi - Here's an American blog about the same situation. Found it quite interesting.

http://affordanything.com/2014/05/27/the-airbnb-experiment-how-much-did-i-make/

loveka

Yes you will be running a holiday let. Nothing wrong with that at all. You may need an accountant to help with your tax. It still goes on a self assessment form but you can offset more, and there are capital allowances etc.

Personally I would rent the house out, not rooms. I wouldn't want to go on holiday in a houseshare.

Have a look at the forums on laymyhat. Very informative.

AdrianC

loveka wrote: »

Personally I would rent the house out, not rooms. I wouldn't want to go on holiday in a houseshare.

Not all AirBnB is "holiday" - some is business travel, some is medium-to-long term.

And aren't most "traditional" bed and breakfasts - or even hotels - "houseshares"?

delmonta

It was interesting that article from the US. But it is quite different to my situation.

I have stayed in Air Bnb's where I just had my room, and there was a shared toilet and kitchen. I liked it. You can have a listing for each room in the house, and a listing for the whole house. So if someone books the whole house the other listings are blocked out. SO you might get 1 to 4 people staying in the separate rooms, or someone renting the whole house.

I just can't find much info of anyone who has been using these management companies in the uk and renting out a whole house.

Anyone?