If your property complies with local state government regulations and the Joint Management Body (JMB) allows short-term rentals, should you consider operating a homestay? Here is our method of doing research on Airbnb, now taught for free!
Open a Google Sheets (or Excel) and fill in the data according to the following method:
1) Find the average price near your unit on Airbnb
Search for your area near your unit on Airbnb, then
1) Choose weekdays (Monday to Thursday) or weekends (Friday and Saturday).
2) Go to the Filter function and select “House” (our Landed) or “Flat” (our Condo) to find the price. It must be the same type as your unit, otherwise, the price will not be accurate.
After finding it, roughly note it down, for example, RM271-469 for weekdays, maybe RM300-500 for weekends.
2) Roughly estimate their rental rate
Note similar units and record their prices:
1) Weekday prices (Sunday to Thursday)
2) Weekend prices (Friday and Saturday)
3) The number of days these units are booked (grey dates indicate booked).
3) Estimate the sales amount
Multiply the weekday price by the number of weekdays, and the weekend price by the number of weekends, to get the total sales of the unit.
For example:
RM 200 x 2 nights for weekdays = RM 400
RM 300 x 8 nights for weekends = RM 2,400
a total of RM 2,800.
4) Deduct regular expenses to get the profit
Here’s an estimate of costs:
electricity is RM30 per night (10 nights = RM300)
water is RM5 per night (10 nights = RM50)
cleaning and laundry fees are RM80 per booking (10 nights = RM800, assuming all staying 1 night only)
monthly Wi-Fi costs RM150
and about RM100 per month for consumables like shampoo, toilet paper, etc.
Sales amount = RM2,800
Expenses = RM1,400
Assuming installment / rental = RM700
Profit left = RM700
5) How to determine if the Airbnb income is good or bad?
We use our profit ratio format to calculate.
Profit = ? times installment payment/rent
a) Best ratio: Profit is 1 times or more than the rent
b) Normal ratio: Profit equals rent
c) Poor ratio: Profit less than rent
In the calculation example shown above, this case belongs in the normal ratio.
Now that you know how to do research on Airbnb, you will be able to calculate the earnings. Are you satisfied with the results?
Why don’t we just pay for data? Like AirDNA, etc.
For beginners or those who only own one unit, this monthly fee is too expensive to begin with.
Well you might be wondering, why do we keep telling you which condos can’t do homestay, and constantly remind you to thinking about whether it’s worth setting up your unit for Airbnb.
Because at the end of the day, whether you make money or not, the short-term rental business management company still takes the management fee before giving you the remaining amount to pay installment etc.
Here, we want to clarify some myths about homestays, by letting owners know clearly how much money their unit can make, what limitations there are, etc.
This way, owners can make an informed decision on their own, instead of finding out that they can’t recoup their renovation costs.
Next Topic: The Correct Process of Operating an Airbnb
Can’t wait and want to know if your property is suitable for homestay?
Feel free to Whatsapp us for inquiries.
We offer a free 15-minute consultation and can directly analyze for you.
