The short term rental market is a highly competitive space. This kind of business can change very quickly as new properties spring up on the Airbnb platforms all the time which can over saturate particular areas. In this blog post we’ll discuss ways of increasing profit from your short term rental.
Finding ways to maximise your earnings is not only good business sense but will limit the effects of a crowded rental space.
There are three main ways of maximising profit:
- Finding ways to cut physical cost.
- Improving efficiency to save time (and ultimately improve your hourly pay.)
- Investing in value improving additions to justify an increase to your nightly price.
The aim is to squeeze as much out of each booking but it is imperative that this is done without reducing the overall guest experience.
Offer self check in
You can save yourself time, offer your guests greater convenience and improve your “check in” rating by offering a self check in option.
Leaving an accessible lockbox with keys in for the guests to obtain themselves will save you from having to meet them at the property. We as hosts can waste so much time waiting for guests to arrive so this prevents this from happening.
On the flip side, if you ever get held up, guests aren’t waiting around for you. Not only this, but your guests have the freedom to arrive whenever they want to. This allows them to arrive without feeling rushed or pressured to meet you.
Reduce/consolidate cleaning products
We often use a large number of different cleaning chemicals for different parts of our properties. In most cases, you can cut down the amount of products you are using to a few key products.
You can cut costs by reducing your spend on multiple type of cleaning products. Every property is different and will need different products and cleaning supplies. For most you can whittle this down to 3 or 4 main bottles.
Some sort of multi surface polish, an antibacterial surface cleaner and a heavier duty kitchen/bathroom spray for tough spots. I also keep a room spray handy to spray all the rooms when I’ve finished.
Reduce linen cycles
When it comes to laundry most washing machines have an hour long standard cycle. If you use antibacterial laundry cleanser with your wash, you can cut the wash time down to a 45 or 30 minute wash cycle.
Unless the linens require a longer wash, this is perfect for cleaning linens after one night bookings. Coupled with a steam iron afterwards, the linen will be perfectly sanitised.
Investing in both Laundry and Dryer balls will aid the cleaning time too. Laundry balls help create friction inside the machine drum to help knock out stains. This in turn leads to a better clean in less time. Dryer balls do the same thing in the tumble dryer by beating out moisture and help to soften fabrics. Both save time which means you can reduce cycle times needed.
Invest in a steam generator iron
Following on from the above, I can’t recommend investing in a decent steam generator iron enough. This creates more steam than a regular iron as it has a larger water compartment and is more effective at decreasing.
The time saved ironing is noticeable from the very first use. I’ve found it can cut ironing time well over half, saving you both time and money.
Set minimum stay length (not too long)
Hosting lots of 1 night bookings will mean you’ll have an increased turn around and cleaning time. Allowing guests to book a minimum of 2 nights cuts your number of potential bookings but can help with time saving and earnings per hour.
If your property relies on one night bookings as mine does, you can always bump the price up so that you’re still offering the option of one night to not alienate these bookings, but so it’s priced to be worth your while.
Be sure not to set your minimum stay length for too many nights. You can end up alienating yourself from potential shorter bookings.
Buy in bulk
If you supply little extras in the property like mini toiletries or snacks, buying packs in bulk can save money. You can do the same for things like toilet rolls by going to wholesalers like Costco. In the long run, you can save a small fortune.
Likewise in supermarkets, if you know will get through them, making use of multi-buy promotions can help. Always shop around for the best deals.
Encourage 5* reviews
There’s no harm in leaving a gentle reminder notice on the back of the front door with your contact information in case there is a problem. It doesn’t hurt to also remind guests of the imporant of a 5 star rating.
This reminder right before people leave mentioning a 5* review will hopefully stay fresh in their mind when it comes time to leave feedback.
A long history of 5 star ratings will lead to more bookings. The algorithm favours these kinds of properties and keeps them full.
Optimise your photos and listing
Making sure your photos showcase your property as favourably as possible is key to securing more bookings or a great chance of bookings.
I’ve written an article below detailing how to take great photos of your property. You don’t even need to be an experienced photographer either.
List on multiple platforms
Ensuring your occupancy rate is as close to 100% is paramount for a successful business. Listing your property on multiple properties and linking your calendars between them will maximise your chances of getting and staying booked.
Remember, if your pricing isn’t right, your property with 60% occupancy can take more money than it could with 100% occupancy for example.
Make sure your rental is not undersold. Sometimes it’s worth increasing the price but taking less bookings than it is dropping the price and working harder for less money. Once you’ve found that pricing sweet spot, work on joining different platforms to ensure your calendar fills at the better price.
Set up auto pricing
If you aren’t sure how to price yourself, let Airbnb do it for you. Be careful when it comes to the lower end though.
Airbnbs auto pricing fluctuates depending on supply and demand. Whilst this is great because it allows you to take your finger off the pulse somewhat, you still need to set your price boundaries so that you are not out of pocket or overcharging.
Airbnb obviously wants you to get booked. However I find that sometimes the lower end it recommends booking for just isn’t financially viable or even worth the effort. Set your minimum night price yourself so that you know you won’t be out of pocket.
Be also wary of the higher end pricing. Airbnb can often wildly over price your property due to a surge in demand or limited availability in the area. Each property has an unwritten ceiling price as to how much it can be rented for. This is ultimately governed by a guests opinion.
If a guest places a booking when it’s at a peak price, this can leave them feeling ripped off. This is particularly true if the property isn’t really worth it. This ultimately will affect your Value metrics. Sometimes the extra money from the booking isn’t always worth the damage in the long run.
When your prices adjust back to normal and other potential guests view your past ratings it can be misleading. For example, your property may be great value for money at £120 per night. But the £300 bookings Airbnb set for you ended up getting a few lower value ratings. When your pricing goes back to £120 a night, potential guests will see your £120 and poor value ratings. This can paint an inaccurate picture of your rental and offering.
Offer discounts for long stays to encourage longer bookings
Longer bookings can be more cost effective for you as you can be less hands on. I find guests tend to be more self sufficient with these types of bookings.
Long bookings leave you will less nights to fill so are more beneficially to reaching a higher occupancy rate.
When I used to offer long stays, I’d often offer 15% and 20% discounts for week long bookings. This filled my calendar relatively quickly. Long stays don’t work for me personally as I prefer short bookings. However if you have the ability to host them, make use of heavy discounting.
As with anything, you may get guests ask for further discounts. If you’re already offering a generous discount, don’t feel the need to discount any further unless you want to.
Add an extra mattress to increase occupancy
Another great way of ensuring you open your property up to more potential bookings and increase your nightly rate is to add an extra mattress. This will increase your ability to accommodate more guests.
You can purchase an air mattress or mattress topper online to set up additional sleeping space. A room such as a living room can accommodate the extra sleeping area.
It’s not ideal as another bedroom would always be preferred but you’d be surprised at how many bookings you can get when you can accommodate extra numbers.
Most of the time, guests want the best deal per head. This is particularly true for travelling families and this is one way to do this.
Blow up mattresses work fine, but aren’t as comfortable as beds you can make up with a mattress topper on a living room floor.
Not only can this bag you more bookings but you can then increase your nightly rate. The earnings will often offset the cost of the spare mattress in no time.
Speed up your cleaning time
Speeding up your cleaning and turnover time will help save you time and increase your personal hourly pay rate. By making the cleaning time as efficient as possible you can save yourself a heap of time and effort. There are ways to do this without compromising on the quality of the clean.
My golden rule with property presentation and cleaning is to de-clutter. The smaller amount of items you have on surfaces, the less dust collectors you have. This allows a speed clean by wiping over surfaces quickly. Less clutter also looks cleaner to the eye.
Allow instant book
When guests are booking a trip they want to make their plans there and then. Guests don’t want to wait to be accepted as it halts them from making other trip plans. By turning on instant book, you’ll notice an increase in bookings right away.
Offer Airport transfers
If you drive, offering collection to and from your local airport(s) is a great way to ensure your guest has a great trip. Not only this but it allows you an additional chance to secure a great review and extra revenue stream.
Travelling and sourcing different taxi companies can be a stressful mix fora guest. If you price yourself a fraction cheaper than local cabs and you’re almost guaranteed to be a guests first option. Extra income and extra chances to get that 5 star review.
Create a guest book with local activities
Another way to secure the chances of a better guest experience is to create a guest book with details on local attractions, things to do or see, including local restaurants you’d recommend.
If you are passing these places, collecting leaflets to leave in your property is a great way to get guests out into the local area. If you can’t source leaflets then just printing off a document with things for people to do in the form of a guestbook will work too.
Not only does this help a guest properly immerse themselves in the local area which is something most leisure travelers will love, but it also helps save you money in the long run too.
Guests going out to eat dinner at a local restaurant will be less likely to cook and make a mess indoors. A bonus of this is that it saves cleaning time and electricity cost. Likewise, a vacant property during the day while gets explore local attractions means that you’ll save electricity from use while guests are indoor, like TV.
The less time guests are in the rental, the better. This means less cost to you and a short window of guest activity inside the property means the odds of wear and tear. Ultimately a lower risk of damages which is greatly reduced too.
This sounds like something so trivial, but over a years worth of bookings, the difference can be noticeable. Plus guests having fun with a busy trip will be more likely to leave a 5 star review.
Over time you’ll find your own ways of saving money and increasing profit from your short term rental. Starting with those listed above is a sure fire way to a great start and a successful rental business.