In another episode of The Airbnb Nomads Toolbox series, Alex and Pooh tackle the crucial question about the real costs of starting a rent to rent Airbnb business (R2RSA). They break down the often-overlooked expenses, debunk myths about easy entry, and offer alternative strategies for those with limited capital. This discussion is a must-listen for anyone considering entering the short-term rental market, providing valuable insights and practical advice for navigating the financial challenges of launching an Airbnb business!

KEY TAKEAWAYS

• The initial costs for a R2RSA deal are significant, including rent, deposit, referencing fees, and property improvements, often totalling £5,000 to £10,000 minimum.
• Investor financing for R2RSA deals is risky and not recommended due to the lack of asset ownership and the many variables in the business model.
• Property improvements can be costly, ranging from £2,000-£3,000 for small apartments to £5,000-£10,000 for larger properties needing extensive renovations.
• Many properties offered for R2RSA deals may require substantial upgrades, as they're often older or less desirable units that aren't renting easily.
• A consultancy model is suggested as a lower-risk alternative, where newcomers can help struggling hosts improve their listings and occupancy rates.
• The short-term rental business is not dissimilar to starting a letting agency, knowledge and systems are just as important as finance.
• Alex and Pooh challenge the common advice that one must have R2RSA deals before moving into property management, direct entry into management is possible with proper education.
• Education, confidence, and positioning yourself as an authority in the space is essential before managing properties for others.

BEST MOMENTS

"It does cost a lot of money to get into a rent to rent deal pretty much for anyone, whether it's apartments, larger houses, wherever you are in the UK, there's costs involved."

"Realistically, wherever you are, you're going to need minimum, minimum, minimum 5,000 pounds to get your first deal. And I would say more realistically, I would say 10,000."

"We're giving our students all of the tools that they need, the education, the systems, the processes, the knowledge to go out and work with those hosts who are struggling and to help to turn their properties around."

"We are pretty much almost like a letting agency for short term rental. So it's almost like if you come into the space, you are starting a hospitality business, you are building yourself a short term rental agencies."

HOST BIO

Alex & Pooh have built a portfolio of over 16 Serviced Accommodation Units and 10 Buy-To-Lets collectively over the last 5 years.

This AirBnB Business has allowed each of them to create their own tailor made ‘lifestyle by design’.

Pooh chose to escape the corporate life as an electrical engineer instead to spend his time at home with his young and growing family, and Alex likes to spend most of his time in sunny Spain enjoying his love for road cycling or even hiking in the Tramuntana mountain ranges.

CONTACT US

Facebook - https://www.facebook.com/alex.mannock/

Instagram - https://www.instagram.com/theairbnbnomadspodcast

TikTok - https://www.tiktok.com/@theairbnbnomadspodcast

YouTube - https://www.youtube.com/@Lifebeyondbroke/