How to optimize your Airbnb income? Explanation.

My real estate investment journey

Since 2007, I have owned an apartment (T2 type) of 32m2 in Angers (France). Initially, this property was rented out to students or young workers for periods ranging from three to six years. Despite this, this investment turned out to be the least profitable in my portfolio... This apartment, purchased for around €81,000 in 2007, has seen its value increase to around €130,000 today. However, this added value was realized over a long period of 16 years!

In addition to this rental property in Angers, I have owned my main residence in the city center of Bordeaux for 5 years and a T2 in Mouleau (very close to Arcachon) which I have also transformed into tourist rental.

Clarification: I took out real estate loans to acquire these 3 properties. This way I benefit from what we call credit leverage.

The challenges of long-term rental

Renting this apartment as a bare or even furnished long-term rental presented several challenges:

• Low profitability: Despite an increase in rent from €400 to €520 per month over the years, the return remained low.‍
• Unoptimized occupancy: A 32m2 one-bedroom apartment is difficult to rent to a couple and even more so for shared accommodation. Consequently, the rent was limited to €520/month‍
• Taxes on rental income: The income generated was subject to tax, which further reduced my profitability.

Why did I choose to rent Airbnb?

Here are the 4 reasons why I decided to transform this apartment into a tourist rental:

1. Fewer administrative constraints: Unlike large cities like Paris or Bordeaux, Angers imposes fewer restrictions on seasonal rentals. A simple declaration for the tourist tax and a registration number at the town hall are enough.
2. Optimization of space: A T2 is perfect for welcoming travelers. It offers up to four beds thanks to a sofa bed in the living room.
3. Flexibility: Tourist rental makes it easier to recover the property for a future sale or to accommodate family.
4. Increase in income: Potential income is significantly higher , estimated between €15,000 and €20,000 per year, much more than the €520 monthly rent for bare rental!

My action plan for profitable short-term rental

Transformation into tourist rental requires initial investments (in money and time) to renovate and furnish the apartment adequately. Here are the steps I followed.

Renovation

• painting work
• change of kitchenette with creation of a tailor-made plan
• change of bathroom furniture

Furniture

• Purchasing quality furniture (beyond simple Ikea furniture) to ensure attractive design and durability.
• The list of furniture is long: sofa bed, double bed, coffee table, ottoman, desk, bar stools, crockery, bed and bathroom linen…
• The list of decorative elements is just as much: rugs, frames, fake plants, throws…

Automation and management

• Implementation of systems to automate check-ins/check-outs and cleaning to minimize costs and management time. This task took me the most time, but I will share that with you in another article.

To conclude, this seasonal rental conversion project represents a strategic turning point to maximize the profitability of my property. By sharing this experience, I hope to provide useful insights to those considering similar solutions.