It's a summer bummer for Brits this year - the temperature has reached scorching highs, flights are getting delayed amidst airport chaos, Covid cases are on the rise again and the cost of living crisis is tightening its grip on the nation.
Amidst this rising cost and chaos, homeowners across the UK are looking for ways to supplement their salaries. One perfect way of forming a significant stream of passive income is via Airbnb – particularly if you have an unused annexe or outbuilding.
This opportunity comes as new research from private equity house, IW Capital, found that 39% of Brits see passive income sources as a way to supplement their 9-5 salary and 32% are planning on becoming financially independent within the next ten years through these means.
David Hannah, Group Chairman of Cornerstone Tax, suggests that by taking the necessary steps needed to make your annexe or outbuilding Airbnb ready, property owners have the chance to create a significant new revenue stream averaging £670 a month.
UK hosts on Airbnb collectively earned more than £1.5 billion last year - £668 million of which was made over the summer months, demonstrating the clear desire for Airbnb rentals in the UK.
Six of the most lucrative dates to host last year fell in August, meaning the upcoming month holds great potential for Brits to earn passive income from unused space in their property.
Homeowners have the ability to decide the nightly price they charge on their accommodation and research from the company showed that half of all new listings received a booking within five days of activation.
A recent survey by holiday cottage rental agency Sykes revealed that more than three-quarters of Brits (77%) are planning to holiday in the UK this year. As Brits are forced to cut costs due to rising prices, David Hannah expects staycations will remain popular for UK travellers.
However, Hannah states that whilst the demand for UK Airbnb properties is evident, it is critical you take the right steps to prepare your annexe or outbuilding before making it available. He suggests taking these steps to get a property Airbnb ready:
- The first and the most basic thing to start off with is to make sure the area is suitable for use as a dwelling. Make sure it contains all the basic necessities for living – somewhere to cook, bathe, go to the toilet and of course, sleep.
- If you’re converting an outbuilding into a living space, make sure it has proper insulation. But to start any kind of work, you are going to need planning permission. This could take several months depending on where you are and the state of your property.
- You need to make sure that your annexe or outbuilding has a separate meter so that you can recover part of the costs of electricity and heating against the income that you earn from Airbnb.
- The important thing is to count everything that you use wholly and exclusively in that business and put it into your accounting software and claim it against your income tax – maximising the return.
- To run that place as an Airbnb, you need to register yourselves with HMRC as having this new trade, so that you can do self-assessment returns at the end of the tax year.
- Once you are registered, you need to market it by uploading the property to Airbnb. You can even build your own website to increase the promotion. Once online, you are ready to have guests booking in.
