Fair warning, this isn’t a particularly humble tale; it’s the tale of how the rich got richer with short-term lets and a management service, Hostmaker!
Could you follow the same footsteps? Is Hostmaker for you? Let’s talk about it…
You probably haven’t read it, my first blog post on Short-Lets and Airbnb, but if you have, you’d know that I confessed to being the uncool dad that’s still walking around with a mullet and a bumbag, because of how late I familiarised myself with the whole Short-let/Airbnb revolution. I only really grasped the concept of it all in 2018. Late 2018. For a professional landlord that’s allegedly got his ear to the ground… well, shameful.
But what I didn’t explain was how or why I came to understand it all.
One of my friends – a rather privileged friend that grew up with all the advantages of a nobleman – managed to corner me into a discussion about how he’s using a short-let management company, Hostmaker, to manage his swanky “second-home” in a lavish part of central London (a property he was previously using as a storage unit for his pet Chihuahua’s toys and winter coats).
Yes, it really is a different world for some.
Long story short, Hostmaker is helping him generate healthy returns by fully managing his property and the onslaught of short-term “guests”, resulting in much better returns than he was previously accustomed to from long-term tenancies.
Ok, so why am I sharing someone else’s privileged life – aren’t our lives miserable enough, don’t we already have enough to be envious of? Yes, it certainly is, and yes we certainly do, but since I am a landlord blogger, and since Airbnb (short-lets) is the latest craze in the world of lettings, I’d be a lousy host if I didn’t cover the subject from as many angles as possible, even if that means piggy-backing off someone else’s
rags riches-to-richer story. Yes, yes, I know! But believe me, once you swallow the vomit, it all becomes tolerable and educational, maybe even inspirational.
What you can expect to learn from this case study?
If you’ve happened to find yourself here because you’re interested in any of the following, you’ve come to the right place:
- To get an idea of how much more money landlords can earn from short-lets compared to traditional long-term tenancies, and consequently why the whole Airbnb economy has skyrocketed, not just among landlords, but also the average Joes’ with a spare room;
- to learn more about Airbnb management services (to help you decide if they’re a wise option for you);
- to learn how Hostmaker specifically might be able to help you unlock the full potential of your property.
Full disclaimer: this isn’t really a review of their service, and definitely isn’t a sponsored post (I don’t partake in shambolic sponsored content schemes); nothing in this blog post has been tainted or influenced by financial incentives or sexual exploits (Booooooo!). I am a free man with no allegiance; I am as faithful as a sewer rat! However, yes, I did reach out to Hostmaker in the midst of writing this blog post, and I have managed to negotiate a kick-back for anyone that clicks on the referral links and goes onto using their services. However, as always, my primary objective is to share valuable information; I don’t give two hoots if you use Hostmaker, or any of the other Airbnb management companies. I just want you to learn and make the best decision for yourself.
We good? Cool. Let’s resume with the regular schedule…
The premise of an Airbnb Management Company
I’ve already written a girthy blog post on Airbnb management companies which will, for sure, bore your socks off, so I won’t retrace my steps. But for the sake of making this blog post complete – in case you’re jumping in feet first without any real context – let me give you a general overview of Airbnb management companies. For those of you already in the loop, you can skip straight to the Hostmaker case study.
An Airbnb management company like Hostmaker takes over the management of your property, and then manages a revolving door of incoming and outgoing short-term guests/occupants, which they source through various holiday rental marketplaces like Airbnb & Booking.com and then rigorously vet each and every applicant. The level of management can range product by product and company by company, but they all generally provide the following services:
- Marketing and guest acquisition i.e. management of all advertising on holiday and short-let marketplaces like Airbnb and Booking.com to fulfil guest bookings;
- Management of reservations, and guest check-ins, which includes meeting and greeting;
- Professional housekeeping services;
- Repairs & maintenance management;
- Buying and repairing broken items;
- Regular pricing review to maximise returns;
- Optional cost-effective in-house interior design makeovers, which drag gloomy properties up from the pits of hell, to help maximise returns.
Essentially, think fully-managed letting agent with a healthy dose of hotel concierge and housekeeping services. However, it must be noted, some management companies are better than others at providing the whole “hotel experience”; HostMaker has partnered with Marriott, so they really focus on it, probably more so than the other companies (which was one of the reasons my friend chose Hostmaker). Needless to say, whether you need to provide that level of hospitality in order to maximise returns will really depend on your property’s location and target audience.
A real case study of Hostmaker’s Management Service
I’m actually finding it tedious continually referring to my friend as “my friend”, so I’m going to refer to him as Basil from now on, even though he probably wouldn’t even mind if I used his real name. But for some profoundly spiritual reason, Basil feels right, and I’m not one to question my piss-poor intuition. Plus, he actually kinda’ looks like a Basil. It’s all worked out for the best, really.
Basil it is.
Firstly, let’s quickly take a bird’s-eye view of the services Hostmaker offer as an Airbnb management company…
8.1 / 10
Please note, I try my best to keep the information up-to-date, but you should read the T&C’s from the service providers’ website for the most up-to-date information.
The Property (so you have some context)
Basement apartment near Oxford Circus. Two bedrooms, two bathrooms, sleeps four.
Yes, it’s fabulous! *flicks hair*
Hostmaker’s Projections & Proposition
During the initial consultation – before Basil signed his life away – Hostmaker advised him that although the prime location of his apartment was fantastic, he wasn’t making the most of his asset, and by implementing a few key changes, they estimated to increase his earnings by +50% per month:
- Key change 1) Interior Design makeover – Hostmaker’s interior design team provided a consultation and a full design and decor service to revamp the property with a clean, modern and stylish aesthetic (pictures below!).
This actually set Basil back a juicy £6k, but apparently it was essential to maximise the potential income!
- Key change 2) Adding value – since the property has 2 bathrooms and ample space, Hosmaker added a sofa-bed in the living room to increase sleeping capacity to 6 persons, which instantly added value.
Basil also installed a state of the art electronic thermostat for heating, automatic wardrobe lights and an Apple TV – to add extra special touches to elevate the guest experience.
The results of Hostmaker’s interior design and decor service…
The financials (how much extra Hostmaker generated in rental income)
|Long Term Tenancy 2016 (with Highstreet Agents)||Short-let tenancies 2018 (with Hostmaker)|
|Income (before costs)|
|Weekly earnings||£850||£1520 (averaged over year)|
|Monthly earnings||£3,683.33||£6,585 (averaged over year)|
|Agent Tenant Finder Fees||
(11% + VAT (Foxtons))
|Agency Management Fees||£2,121.60|
(4%+ VAT (ABC Estates))
(12% + VAT)
|Council Tax||£0 (paid by tenant)||£1100 per annum|
|Utilities||£0 (paid by tenant)||£2100 per annum|
|Netflix||£0||£72 per annum|
|Repairs & Maintenance||£1,000 approx||
(taken out of earnings before payment)
|One-off upfront furnishing/design||None (unfurnished)||£6,300|
|Profit (after costs)|
|Weekly earnings||£850||£1520 (averaged over year)|
|Monthly earnings||£3,683.33||£6,585 (averaged over year)|
£56,677 (after one-off furnishing cost)
From May – September 2018, Hostmaker delivered 90+% occupancy, with an average daily rate of £274 a month in gross earnings on average, balancing occupancy and pricings to achieve maximum revenue.
In a 12 month period between September 2017 and August 2018, Basil achieved an average gross income of £6,585 a month.
Hostmaker, to date, has achieved +60% increase in earnings compared to what Basil was previously earning from a long-term tenancy.
Interested in talking to Hostmaker? Hostmaker referral link.
Are Hostmaker the best Airbnb management company in the entire Universe?
*shrugs” I dunno, bruv. I have no basis for comparison and I’m really only the good-looking messenger/stable-boy.
I mean, the results all look and sound very impressive! The figures are delicious and Hostmaker clearly did a beautiful job for Basil, and based on what I know, I’d happily recommend their services. Or at least, I’d tell landlords that are looking for an Airbnb management service to look into Hostmaker.
So to actually answer the question (about them sucking or not): No, I do not believe Hostmaker suck. I can’t really say whether they’re the best or not, but that really wasn’t the purpose of this blog post…
- This case study is just one positive example of how a landlord can earn significantly more money with short-lets compared to long-term tenancies (with or without a management company). The purpose of sharing it was to demonstrate the potential and why so many landlords are jumping onto the Airbnb/short-lets hype train!
- Hostmaker did a great job, and they clearly have a working recipe that can not only provide a complete Airbnb management solution, but also maximise rental income for landlords. Could any of the other UK Airbnb management companies have achieved the same results? I don’t know. Possibly. Probably. But they didn’t. One thing is for sure though, using a management company can work. Beautifully.
- Since Airbnb management companies currently only service major UK cities, like London, Manchester and Edinburgh, their services are only available for a tiny portion of landlords. However, if I had a property that qualified (which I don’t, because I’m poor and sleep in a dog bowl that smells of cabbage), I would definitely use a management company to handle my short-lets, and that’s simply because of how much work is required to maintain a constant flow of short-term guests. I have no interest or energy to keep up with a machine that, by design, operates so damn quickly and is so dependent on first-class hospitality.
However, with that said, I do assume that Hostmaker believe they’re the bee’s knees and the preferred choice (which I can’t or won’t dispute)! So I asked them the question…
Why Hostmaker think they’re the best…
It’s simple, really: we’re the only ones to apply hospitality expertise and the latest tech to short-lets. For instance, we make sure that every guest is greeted in-person, 24/7, and all of our housekeepers have prior experience in premium hotels. It makes more personal, and higher-end. Guests love the experience, rate it higher, which in turn brings more guests, and more revenue.
Quick and to the point.
I dig it!
Over to you…
So, did you find the case study / sort of review useful?
What’s your story? Are you currently in the market for a short-let management company, and if so, will you be using Hostmaker?