Should I turn my Airbnb into Long Term?

When things hit the fan, we have all started to desperately look for “escape” plans. Being dependent on tourism, short-term rentals have reached its bottom. What are our options? How to keep up with the current expenses? How to pay the property loan?

While Airbnb is trying to convince you to change your cancellation policy from strict to moderate and provide more discounts to attract bookings, there are facts that we must face while making our choices.

Let us review an actual example from a real-life Airbnb calendar.

On May 20th, a guest made a 31-day reservation and got a fatty monthly discount from its host who wanted to ensure the reservation and get some income in this desperate time.

The Total that you have is 133.500, – HUF, which is approximately 385, – Euro. Knowing that utilities could cost up to 30.000, – HUF per month for this size of the apartment, we are left with a 100.000, – HUF monthly income. Deduct your management fee from that. What you left with is quite an upsetting number given that this property has big potential.

After your 1-month Airbnb reservation has been completed it is not guaranteed that you welcome your guests anytime soon for a higher price. Lack of cultural events and flight restrictions will not let the Airbnb market flourish in 2020.

Considering that Long Term rent can be another option, here are the figures that could help you estimate the difference.

Today, the asking price of a 45 – 50 square meter apartment consisting of 1 bedroom and a living room varies.

Let’s say, in our example, the adequate asking price is between 140.000, – 160.000, Forints, and that is excluding utilities (your tenants are now responsible for their own consumption).

With a long-term contract between 8-12 months, there will not be any leaps all year-long. What you get is a pure market-level rent without any ups and downs. Bills are paid. The apartment is maintained.

Having a constant stable income throughout the year is definitely going to lead to positive cash flow, regardless of the unpredictable market fluctuations.

At bnbnMore we provide a dynamic long term and short term management service, you can get the most from both worlds. Leave your contact details and we will call you back today!