Is there a perspective in renting out a property on Airbnb and why?
Is there a perspective in renting out a property on Airbnb and why?
We know the popular understanding that property investment is one of the safest. But does this apply to renting out the property on a short-term basis? One of the most popular platforms for this type of service is Airbnb. Widely used around the world, it has also become very common in Bulgaria, especially in the last few years. Today we will answer the question of whether it is a profitable opportunity to rent there and whether it has a perspective in our country.
First of all, we must consider that renting a home on a platform like Airbnb targets mainly tourists who visit our country for a short period of time. The capital is a main preferred destination, so we will talk about Sofia as a market. How successful the rental will be there depends on several key factors:
The location of the building must be in the tourist center of the city. If this is not possible, the center should be easily and quickly reachable – for example, by metro. This is one of the first things tourists check before booking a place. An example of a well-located building is Detelini Building. It is located in the Ovcha Kupel district near the Mizia metro station, which is part of the third metro line in the capital. The location of Krasena Building also offers optimal proximity to the new metro stations and Ovcha Kupel and Krasno Selo districts.
Other important factors are the facade of the building, the interior, and the overall atmosphere that the property conveys. A recent renovation, practical and stylish furnishings, amenities according to the needs of the tenants (e.g., a baby cot) – these are details that make an exceptional impression and most times are apparent from the photos on the platform.
High-quality photos should not be underestimated either. Taken professionally, they are the business card of the property that has to “sell” it to potential clients. The more quality photos there are, the greater the chance that the rental will be successful. This includes photos of the view from the property and the surroundings so that potential tenants can get a comprehensive idea of the home and the area. The same principle applies to client reviews – when there are many and they are satisfied, the rating of the property goes up, and the likelihood that people will choose it is much greater, even if the price is higher compared to another property with fewer and/or worse reviews.
If all or at least most of these factors are present, renting on Airbnb could be a good and profitable investment. But to support this claim, let’s also look at statistics related to the short-term rental property market in Sofia according to AirDNA data – the leading company that provides data and analysis for the short-term rental industry. Based in Denver, the company monitors the daily results of 10 million vacation rental properties on 120,000 global markets and collects data since 2015 to provide real-time market information.
The market rating in Sofia is 100/100. It is based on how the market has performed in terms of demand, revenue growth, seasonality, regulation, and investment potential. The average income from a property in this market over the last 12 months is €12.7K – 9% more than last year. The average daily rate has also jumped, by 18% – this is the average amount that hosts in this market have charged per day over the last 12 months. At the moment, it amounts to €57.1. Unfortunately, the occupancy rate has fallen by 10% compared to last year. It shows how often an average active property has been occupied over the last 12 months. However, considering the previous figures, this is not a problem, as it is evident that the market is regulating itself, and owners can afford to demand higher rents.
In conclusion, the deduction we could make is that renting out a property on Airbnb has a perspective if certain basic conditions are met and, of course, if prior thorough research of the market is done. However, on a larger scale, the tendency is for more and more travellers, and consequently more tourists in Sofia, Bulgaria, who will want to stay at a nice place with a central location, even if at a slightly higher price.