Should I abandon plans to buy a house to rent on Airbnb? Dave Fishwick responds

I am in the process of purchasing a small one bedroom cottage in St Albans, Hertfordshire which I plan to rent out as an Airbnb.

I have managed to buy it for a decent price. I think it’s because the house is quite peculiar and therefore ideal for Airbnb, but not so good to live in. I had to get a vacation rental mortgage which is not cheap.

I am concerned about the cost of heating it for guests with higher energy bills. There’s also the question of renting it out given a potential recession on the horizon that could leave people with less money to spend.

Opportunity knocks at the door: Should I go ahead and buy my vacation rental or retire due to the economic crisis?  Dave Fishwick responds

Opportunity knocks at the door: Should I go ahead and buy my vacation rental or retire due to the economic crisis? Dave Fishwick responds

I want to move on, but I feel insecure about buying a property at the moment, as I am using all my savings for the deposit and start-up costs, and the idea of ​​starting a business in these times.

On the other hand, I think it’s important to go ahead with dreams as there is always something to use as an excuse like Brexit or Covid. Should I stay the course or abandon my plans? Via email.

Ask Dave Fishwick a question for business or career advice

Self-made millionaire and entrepreneur Dave Fishwick is our new columnist answering your business and career questions.

Dave runs a highly successful minibus and vehicle business based in Lancashire and rose to fame with his BAFTA-winning television series Bank of Dave, in which he battled against the big banks.

He’s ready to answer your questions, whether you own a business, are thinking about starting one, or have general questions about your career.

In her spare time, she likes to give talks to inspire people to be the best they can be.

A Netflix movie about Bank of Dave is due to air later in the year/early 2023 and he’s been friends with This is Money for the last decade. He now wants to impart some of his wisdom and advice to our readers.

If you’d like to ask Dave a question, email him at bankondave@thisismoney.co.uk

Dave will do his best to reply to your message in an upcoming column, but he won’t be able to reply to everyone or correspond privately with readers. Nothing in his responses constitutes regulated financial advice. Posted questions are sometimes edited for brevity or other reasons.

Dave Fishwick, business doctor for This is Money, replies: First of all, there is never a perfect time to start a business.

An old saying that I use a lot is: ‘The best time to plant a tree is 25 years ago. The second best time to plant a tree is today.

Throughout my life I have built many businesses here in the UK and the US and there has never been a perfect time to start.

Owning a vacation home in a lovely location is a dream for many people, so let’s plant that tree and make it grow.

Dave Fishwick

I think it could be a major business venture if you approach it with a realistic mindset and don’t let emotions override your better judgment.

As beautiful as the cabin is, always keep in mind that the numbers should add up. In business, you only have to do a few things right, so as long as you don’t do too many things wrong, like borrow too much or spend more than you need to.

I think quirky is good for a vacation home. Curb appeal and style will be essential factors along with location to compete for customization. Sounds like an ideal option for a vacation rental.

I was involved in helping set up an Airbnb holiday rental in Dover, Kent, as part of a commercial mentorship series I shot for Channel 4.

I remember that it was essential to take quality photographs of the property inside and out, including some of the picturesque areas surrounding the property.

Employing a professional photographer is definitely worth the investment. We partnered with many local attractions and arranged discount tickets to local events for anyone who stayed at our Airbnb.

I suggest you make many trips to St Albans to meet other Airbnb business owners, and I’ve found that talking to owners about the problems they faced and the solutions they found was essential and incredibly helpful.

Also, I suggest you make plenty of trips to St Albans to meet other Airbnb business owners, and I’ve found that talking to owners about the problems they faced and the solutions they found was essential and incredibly helpful.

While there are some challenging times ahead, I believe this industry is not going away and could even benefit from overseas holidays becoming too expensive for some, short breaks in the UK provide a more affordable alternative.

Some of their customs may come from wedding guests, business travelers, and many other types of visitors to this area as well.

If possible, I think it’s essential to have some funds in reserve when starting any new business, and you can almost guarantee there will be unforeseen expenses, whether it’s repairs, modifications, or just a quiet period when you’re just starting out.

Perhaps you could take another look at your finances to see if you can build a reserve fund. Make sure to earn some money as soon as possible after completing it.

Create a website for the property and start marketing on social media and spread the word about it in as many ways as you can. This includes local websites and attractions and things to do there.

All Aboard: Dave with the Spitfire Museum Bus in Dover

All Aboard: Dave with the Spitfire Museum Bus in Dover

All Aboard: Dave with the Spitfire Museum Bus in Dover

The more valuable and unique the content on your site, the more visitors it should attract.

At Dover Airbnb, I got involved with a fantastic double-decker tour bus, taking trips to the local spitfire museum, which we post as an activity on the accommodation’s website.

These activities look amazing in your advertising and generate free publicity.

My advice is to also do a lot of research on the area and include a lot of local history.

Research other properties in the area as if you were renting one yourself and price match yours.

You should learn a few tricks of the trade from people who already have websites.

I wouldn’t worry too much about heating. Daily rates for vacation accommodation are generally high enough that utilities are not your biggest expense.

Perhaps having a wood stove or open fire could help here. I think having one would add to the experience, and you might be able to get some free fuel.

Fixed overheads, particularly mortgage payments, will likely be at the top of your expenses, so idle time when the property is not occupied will likely be a bigger concern.

In the long term, property is usually a good investment, and short-term rental is usually the best way to get the best return on it.

Some companies specialize in marketing vacation properties, and some will buy the entire season and resell short stays.

This might remove some of the uncertainty for the first few years, though they don’t do it for free, and the rate you get may be less than hosting it yourself.

Maybe a combination of both, maybe selling some of the seasons for the holidays, letting the company, and maybe trading the peak hours yourself to maximize profits and remove any worries of not being able to pay the mortgage.

In the long term, property is usually a good investment, and short-term rental is usually the best way to get the best return on it.

My main concern is that you may have some early cash flow problems without having a little in reserve.

Manage your budget carefully during your first year, and I think you’ll be fine. Let’s plant that tree. Good luck with that if you decide to go ahead.

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