In a recent video, Troy takes us around his latest rent to serviced accommodation deal, estimated to make a staggering £14,000 a month! He has rented two floors of a block of flats which is rather impressive! I highly suggest watching the full video (above) to see exactly what he did and maybe get some ideas for your own projects. I know that Troy is going to do some truly incredible stuff going forward and I can’t wait to see what he does next.
While Troy estimates he will make about £14,000 profit from the properties, it is important to understand the costs. Troy has to pay the landlord rent; pay bills and pay cleaning/management costs. As long as everything goes well, this isn’t a problem. However, it is very important to estimate demand and what can be charged per night correctly. In this article, we will take a look at 3 simple methods for assessing demand for serviced accommodation in a particular area.
1. Look on Airbnb and Booking.com
The first step is simply looking at the booking sites. Search the area for various dates and see what is available and at what prices. Take detailed notes and open up listings to access the calendar. Check which dates are available and which are already booked up. Look at the features of the listings with the most bookings. How many bedrooms do they have? Are they en-suite? Do they have a microwave, washing machine, access to an on-site gym, etc.
It is important to not only understand the demand in terms of pure numbers but also in terms of exactly what the customer is looking for. You don’t want to rent out a one bed flat if the demand is from families, for example. You also need to know the expectations in the area. People looking to go on holiday will want something different to those looking to book a business trip.
AirDNA is a tool that lets you see the demand for serviced accommodation in a particular area. It includes data on occupancy, pricing, average revenue of hosts and more. You can view some of the information for free but for the full data you need to pay a fee. It is a very useful tool for assessing an area and deciding whether there are opportunities for rent to rent deals.
Use AirDNA as part of your overall analysis, however never rely on it alone. AirDNA should supplement your own research and should never replace doing the work yourself. No matter how good a dataset is, a human assessment of demand is essential.
3. Talk to hotels
Talk to hotels in the immediate local area. Say you have a large group you want to book for and find out if they have availability. Ask hotels if they have a room for tonight. If there is a lot of availability across multiple hotels, it may not be a great area to run serviced accommodation in. If most hotels are booked up but one or two are not, it may just be the quality of those specific hotels and the area may still be good for short stay rentals.
If you would like to learn more about how to start out in the rent to rent business, why not book a free ticket to the Rent To Rent Revolution? Tickets are limited, so don’t delay. Book your free ticket here.