Today, when we want to go on vacation or for a weekend, we first look for our rental on the Airbnb site. And the number of accommodations is multiplying. There are no less than 30,000 in Paris! These furnished tourist accommodations can prove to be an excellent idea for owners who want to add money to their account. But is it really profitable? We will try to answer this question.

Airbnb, What Exactly is it?

Airbnb connects people looking to find furnished accommodation for a short stay with those who have such accommodation. This community platform, created in 2008, has now become a world leader in accommodation.

And this success attracts many hosts. By offering a room in their home, they hope to earn money. It’s true that Airbnb only takes 3% of the amount as a commission. So it can be interesting. It’s the owner who determines the price of the accommodation alone. They also choose the category of their accommodation: full-time, part-time…

An advantage of Airbnb is that it offers hosts a guarantee. This provides compensation in case of breakage or damage caused by tenants.

Renting Accommodation on Airbnb

However, an accommodation owner will have expenses to anticipate when renting it on Airbnb. This rental is then comparable to renting a classic apartment. It is therefore essential to declare your property as a seasonal rental to the tax service. Some cities, like Paris, also require a request for authorization to change the use of the building. Furnished rental is a commercial activity. It is therefore taxable. It falls under the income tax scale and not property tax. It is therefore essential to declare the amount of rent received to the tax administration.

It is also useful to consider the costs and charges related to this rental: depreciation, general expenses, property tax, and fees charged by Airbnb.

It is also important to take into account the management of the accommodation. It is indeed time-consuming. You have to take care of cleaning, handing over keys, publishing your ad, managing rentals, handling disputes… To facilitate these tasks, some owners call on external companies, which obviously incurs additional costs (around 20%).

Reviews are also at the heart of the platform. To rent out your accommodation well, it will be necessary to optimize comfort services (internet, coffee machine, additional TV channels…). It’s also important to think about water and electricity bills that vary from one tenant to another. Some municipalities impose a tourist tax. Since July 2018, this has been collected by Airbnb.

Even if the costs can be significant, many owners think that accommodation offered on Airbnb can be a very good idea to earn money. But is it really profitable?

Airbnb, a Good Idea for Owners?

The potential revenues, especially in big cities, are attractive and many owners succumb to them. Various studies have shown that renting an apartment in Paris via Airbnb would be 3.5 times more profitable than a classic rental. However, Airbnb rental is increasingly regulated. More and more cities require authorization for change of use. This authorization may be subject to compensation (in real terms or through the purchase of rights or commercial title).

Since July 2016, any owner who receives income from Airbnb must declare their income as soon as they receive a euro. These revenues fall under BIC (Industrial and Commercial Profits). The owner must therefore affiliate with the Social Regime of the Self-Employed as soon as their income exceeds 23,000 euros. This entails the payment of social contributions. Below 23,000 euros, social contributions will not be paid, but social charges will still have to be paid, i.e., 15.5%.

To date, more than 750,000 accommodations are offered by Airbnb in France. The competition is therefore significant. And this has not led to a fall in prices at all. Quite the contrary! Prices have increased by an average of 16% in recent years. Which is a criterion for defining Airbnb rental as profitable.

However, it is crucial to think about the equipment of the accommodation. The more complete it is, the better reviews the accommodation will have, which is important for rental. However, this can represent a certain sum that should not be neglected.

With Airbnb, tenants prefer short stays. It is therefore possible to set a nightly rate, which is higher and thus offers better profitability. And above all, don’t forget the fees: management, maintenance and repair, cleaning, which can be substantial.

To maximize the profitability of your rental, it’s important that it has a high occupancy rate. It is therefore crucial that the pricing strategy is optimal. As we have already mentioned, it is also essential that tenants are satisfied. Positive reviews will increase the visibility of the property on the Airbnb platform. Profitability will then be increased.

For an Airbnb rental to be profitable, it is therefore essential to take into account different criteria: occupancy rate, charges and fees, and local regulations. It will then be easier to be well-paid and to make money with your rental accommodation.

It is also possible to use a concierge service, such as Bnb Groom Services, which helps you rent out your accommodation in Nice, Villefranche-sur-Mer or Cannes. The various services offered will allow you to showcase your property and rent it out more easily, thus freeing your mind and making your property more profitable.