It is possible to build property riches starting from a small base. This couple shows you how they did it. They’ve also launched a business that makes it easier to rent your property on Airbnb.
Although Brigid Prinsloo is a dyed-in-the-wool Capetonian who absolutely loves the city, she isn’t spending a whole lot of time there right now. Like many young people, she’s pulled up stakes and hit the road, determined to see the world. When Entrepreneur spoke to her via Skype, she was busy exploring Vietnam with her Fiancée.
But, unlike many people who finance their travels by selling their homes and possessions, Prinsloo hasn’t liquidated her assets. Instead, she has done the opposite – she has invested in a couple of properties that she lists on Airbnb. The income from these rentals is significant enough to not only cover their respective bonds, but to bankroll her travels as well.
How has she managed it? And, more importantly, is it something that others can accomplish as well? Entrepreneur asked her to reveal the secrets to making a killing on Airbnb.
1Getting Started: Listing Your First Property on Airbnb
How did you start listing on Airbnb?
I used Airbnb during a trip to London and Dublin, and the experience was a very positive one. When I got home, I decided to try being a host. My fiancé and I had a spare room in our flat, which had morphed into a dishevelled storage room. Almost on a whim, we decided to try and rent it out on Airbnb. We had a very ‘Lean Start-up’ approach to the whole exercise. Our small room acted as a minimum viable product (MVP), we listed it simply as a way of gauging interest.
Well, within an hour of listing the room, we received our first inquiry. Within the first day, we had our first booking. We weren’t prepared. We ended up moving our own comfy bed into the room, just to ensure our guest could enjoy a decent night’s sleep, and slept on a spare bed ourselves.
By the end of that first month, we had earned close to R10 000 by renting out the room. The rent for our entire two-bedroom flat was R10 500 per month. We realised that we could earn a tidy sum by renting out an entire flat.
My fiancée and I purchased a property that we now rent out, and I also purchased a second property with my dad and my sister, which we’ve also listed on Airbnb.
Resource: New Ways SMEs Can Find Funding
2Return on Investment: Making Money on Airbnb
How much income can you expect to earn on your Airbnb property per month?
There are obviously loads of different kinds of listings on Airbnb – everything from cheap spare rooms to lavish mansions. Based on the investment we’ve made, though, I’m very happy with the return we’ve seen.
If you take the entire amount that my fiancée and I have earned from renting our flat out through Airbnb and divide that by the number of months that it’s been listed, the average monthly earning is about R23 000. And this is a property that had been rented out to a long-term tenant for about R6 000 by a previous owner. And what’s great about this sort of investment, of course, is that the income generated is fairly passive, which is why I can afford be in Vietnam while everything ticks over at home.
3Birth of Superhost: An Airbnb Management Company
Is there an easy way to manage multiple Airbnb properties?
If you’re renting out one room – or even one flat – managing your rental is fairly easy. However, once you start listing a couple of properties, managing them can become quite a task. For example, someone needs to welcome guests and hand over the keys, ensure that the flat is clean, and even take care of all the admin that goes with managing a listing on Airbnb.
We started a service called Superhost SA, which assists Airbnb hosts in managing their listings. As the popularity of Airbnb has grown, companies focusing on offer management services have popped up in lots of major cities. For around 17% of the revenue earned, a company like Superhost will assist with the nitty gritty of renting out a space on Airbnb.
Resource: 10 Businesses You Can Start Part-Time
4Location, Location, Location? Which is Best for Airbnb Property Owners
How important is location when it comes to listing a property on Airbnb?
Location is important, there is no doubt about it. A lot of travellers will judge a listing by what is within walking distance of the space. So it is worth trying to get hold of a property in a decent location, even if it means you might have to go for something a tad smaller.
That said, however, you’ll find that the listings on Airbnb in Cape Town are surprisingly spread out. Services such as Uber have made it easier for people to travel in foreign cities. So location is important, but you certainly don’t need to be situated in the very heart of town.
5How to Build An Airbnb Property Empire
Can you build real wealth through Airbnb listed properties?
Some people are using Airbnb to build empires, there’s no doubt about it. You find that some people in large cities like New York have massive Airbnb portfolios with 200 listings. Airbnb is providing an interesting alternative to the traditional strategy of buying properties and renting them out to long-term tenants to pay them off. You can make far more money from Airbnb.
That said, Airbnb isn’t going to turn you into a multi-millionaire overnight. Building up a portfolio will take time. We might be able to pay off the bond on our flat in four years instead of 20 thanks to Airbnb, for example, but it’s not a get-rich-quick scheme. It will still take time.
Another interesting way to potentially make money through Airbnb is to rent a property and list it on Airbnb. But you don’t want to do it illegally. Airbnb has had to deal with some backlash overseas because of tenants who were illegally subletting their flats. You need to be honest with the landlord and make sure that he or she is okay with it.
6How to Make Your Listing Stand Out
How do you achieve and maintain a high occupancy on Airbnb?
A lot of people are noticing the income potential of being an Airbnb host. In fact, Cape Town alone now boasts close to 10 000 listings on the website. So how do you make your listing stand out? Here’s Brigid Prinsloo’s suggestions:
1. Create a pretty listing
Hide the laundry, flush the toilet and make the bed before you upload an image of your flat on Airbnb. Not only should the flat you’re listing look clean, modern and inviting, but you should also make sure that you post excellent pictures of it online. It’s even worth making use of a professional photographer.
2. Undercut the competition
You might not be better, but you can certainly be cheaper. Undercutting the competition is a worthwhile strategy. The more people have visited you, rated your place and commented on your service, the higher your listing will be placed on the website. This means that new hosts can find themselves languishing at the bottom of search results, far from the eyes of potential guests. Prinsloo suggests listing your space just below the market standard (5 – 10% below).
“Most people filter search results by price, so being slightly cheaper than the competition will help you get noticed,” she says.
3. Connectivity is important
Around 70% of South African Airbnb guests are from overseas. While these people won’t be travelling thousands of kilometres to sit in a room and watch TV, they’ll probably still want access to DStv. Wi-Fi is another must-have for those looking to share their ‘African experience’ on social media. And it better be fast and uncapped.
4. Be friendly and helpful
As mentioned, reviews are important on Airbnb. And if you want to receive a good review you need to provide a great experience.
“A lot of people are looking for that personal peer-to-peer experience. They don’t want to feel as if they’re living in someone else’s room with their clothes in the cupboard and toiletries in the bathroom, but they do appreciate that personal. Being friendly and helpful goes a long way. If someone is from out of town, it’s a good idea to provide them with hints on where to go and what to do in the city,” says Prinsloo.
5. Add personal touches
You’re not a hotel, but you can still try to make your space as cosy and inviting as well. A good way of doing this: Provide those nice-to-haves like soap, shampoo and great coffee. Prinsloo always provides a couple of bottles of local wine as well.
Related: 10 Tips for Finding Seed Funding
7The Risks of Listing a Property on Airbnb
What are the risks associated with listing a property on Airbnb?
Whenever you hand over the keys to your house and possessions to complete strangers, there is an element of risk involved. However, Airbnb tries to mitigate this risk by allowing hosts to vet guests (and vice versa) to an impressive degree. Guests and hosts verify their IDs by connecting to their social networks and scanning their official ID document. Although there are some horror stories out there, listing needn’t be terribly risky. You just need to try and make sure who you’re dealing with.
What happens when a guest breaks a leg while descending your stairs, chops off a finger with your kitchen knife or shocks himself with your electric fence (foreigners aren’t as familiar with electric fencing as we are). We live in an increasingly litigious society, and should something go wrong, you could find yourself being threatened with a lawsuit. Because of this, it’s a good idea to ask guests to sign a waiver that absolves your from any culpability.
It’s great when guests arrive, but what happens when they won’t leave? Airbnb rental falls into a murky category of property rental that could see you deal with the same legal hassles as someone trying to get rid of squatting long-term tenants. Squatter’s rights can make this very difficult. It is a good idea to consult a lawyer to help draft a contract that will offer some form of recourse in the event of squatting guests.
Some body corporates and home-owners’ associations will be less than impressed with the prospect of total strangers coming and going from your property at all hours. You need to ensure that other home owners don’t have problem with the listing of your property on Airbnb. The last thing you want is for them to take their frustrations out on your guests.
(Podcast) Phone Calls Often Solve Email Problems
Irate customers can become your most ardent supporters, but it’s important to treat your clients like people. People like people, and phone calls are more personal than emails.
Emails solve problems – but they also create them. When a real problem arises in your business, is an email the best way to solve it, or should you pick up the phone and give your customer a more personal experience?
Irate customers can become your most ardent supporters, but it’s important to treat your clients like people. People like people, and phone calls are more personal than emails.
Listening time: 3 minutes
Why Choose ISO 90012015 As A Starting Point For Your Business
Implementing all elements of the standard can help your business, but what parts of the ISO 9001:2015 standard in particular should prove to be of most beneficial for yours? We’ve listed a few below.
Ask for any Entrepreneur’s to-do-list, ISO Implementation and certification may not always be at the top of it. Businesses are constantly faced with financial, operational and socio-economic pressures, while business owners must make decisions on projects related to “cost vs the benefits”. But here’s why ISO 9001:2015 is a reasonable investment.
If your businesses is certified under ISO 9001:2008 you had three years to transition to ISO 9001:2015, if you don’t transition, your certification will become redundant. The three‑year period started on the date the new standard was published in September 2015. Don’t wait, your Day 1 of 365 days starts now.
Implementing all elements of the standard can help your business, but what parts of the ISO 9001:2015 standard in particular should prove to be of most beneficial for yours? We’ve listed a few below. It may also protect your business (against big business)
Start by viewing the costs as an investment that allows you to better assure your clients, improve your productivity and raise your ability to compete.
Your certification to the standard, can attract reputational benefits and establish a ticket to levels of business that non-certified companies certainly cannot obtain. This may be the most practical time to implement ISO 9001 for your business.
As the full process can take up to 6 months, you need time to plan and execute your transition to the new standard and it will require work, commitment and changes to the habit of doing things.
This is why it’s vital to begin early and hire consultants with a 100% certification record with any SANAS (South African National Accreditation System) or International Accreditation Body. It gives the guarantee and expertise you need.
Your 6 steps to getting ready for ISO 9001:2015
- Documenting and Implementing processes in your business can yield great benefits as your business grows. Setting common processes in the beginning will result in consistency in the products and services, this sets a sound foundation for expansion and future growth.
- Save time, cost, and ensure delivery. This takes place when you have new employees and point them to processes that are well established and well documented.
- It allows your staff to feel confident in doing their job, knowing there is a process to follow and with the help of the Document Control Process, you can always re-engineer the process to adapt to change, this results in Continual Improvement.
2Formulate PDCA cycle (Plan-Do-Check-Act)
- The fundamental basis of the ISO 9001 standard is based on Edward Deming’s PDCA Model. If implemented effectively it can benefit any type of business however large or small you are, it’s practical. The Method is also used by fighter pilots.
- You build a culture of “careful planning, monitoring, and adjustment of actions” this speaks volumes to your employees, and your clients benefit in return.
3Increase your sales by using ISO 9001
- By using valuable customer feedback, you build up information to monitor and review your client’s perception of your products and services, this feeds into a corrective action process, which results in a continual improvement to create relationships with existing clients and attracting new clients.
- Most Tender Requirements from Government, Local and International Companies require ISO 9001 as a qualifier to their procurement process. This gives them the assurance that a Third Party Auditor is auditing an effective Quality Management System aligned to International Standard that has effective process control and will measure client satisfaction.
4Develop an attentive mindset to risk and opportunities
- Risk and opportunities is the latest introduction to the ISO 9001:2015. This allows businesses to identify potential and current risks in their process and mitigate them before it’s too late, the fundamentals of a successful business.
- By cultivating a culture where your team have a sharp eye for risk and opportunities will serve your business well.
- Profits will be maximised while risks are spotted early and can be minimised.
5Take control of change management
- As the saying goes, “Change is the only constant in the 21st century”. The inability to handle change and adapt accordingly is one of the main reasons that many businesses do not survive through the first two years of existence.
6Setting goals and objectives
- Goals and objectives are key fundamentals of the ISO 9001:2015 standard, these are tools to assist in attaining your companies Vision.
- When you get into the habit of setting, reviewing, and taking action against objectives, the end results is growth and driving improvement.
It is clear that implementing ISO 9001 can take your business to the next level that benefits startups to established corporates. We stress again the vital importance to begin early and hire consultants with a 100% certification record with any SANAS (South African National Accreditation System) or International Accreditation Body.
How ISO Certification Can Help You Access Market Tenders
Want to leap-frog your competitors by building your business credibility?
2017 has been a challenging year thus far. A decline in exports, slower growth in private consumption and fixed investment has caused the economy to contract in Q1 and enter into its second technical recession since 2009. This means that it is now more crucial than ever to break away from your competition to survive in this economy.
The question we as businesses are all asking, is how can we become more competitive during these tough times?
The answer is ISO Management systems and certification. The implementation process allows organisations to streamline their processes and benchmark to international standards that have worked for the likes of Toyota, Coca Cola, MTN SA and many more.
The ISO Certification gives your clients the national and international credibility that they are looking for, in you as a business.
What are ISO Standards?
ISO is not an acronym, it is derived from the Greek word ISOS, which means equal and is interpreted as The International Organization for Standardization, which comprises of various National Standards being superimposed into one International Standard. There are approximately 21500 ISO Standards, from Quality, Health and Safety, Information Security, Environmental, Energy and many more. (The International Organization for Standardization)
The ISO standards set a precedence for companies to create a Management System which comprises of Policies, Objectives, Processes, Risk Assessments and Procedures with the aim of being able to provide a consistent service.
The standards requirements can assist a one-man tuck shop to large corporates such as Google.
Think about it this way, when you buy a house, does your insurance company grant you a policy without an Electrical Certificate of Compliance? Do you buy a brand new laptop, mobile device or any other electrical device without a warranty or guarantee? Will you send your child to a hospital that does not have standards in place? Will you buy vegetables that have not undergone the necessary food safety controls?
We, as consumers, have all become cautious, hence the birth of ISO Certification. An independent body (Watchdog) such as the SABS, BSI, TUV, and Bureau Veritas conduct regular audits against your processes and the International Standard to create the assurance you are looking. How ISO Standards And Quality Management affects SMMEs
That is why your company must invest the time and money to implement the value adding systems with the right consultant. This in turn will provide your current and potential clients the assurance that you have the relevant processes in place to deliver what is required and will provide you with the competitive edge. You are not too small to become ISO certified.
Where do I start if I want to become ISO Certified?
ISO Management systems work on a four-phase approach to develop, implement, train and assist organisations through certification.
The following will give you an overview of how the process works:
Phase 1: GAP analysis & Identification of processes
- GAP Analysis Audit on the choice of your ISO Standard
- All Staff to undergo awareness training on the ISO Standard (Requirements)
- Analyse & identify current systems (Policies, Objectives, Risks, Processes and Procedures) within the company and gather information.
Phase 2: ISO Management System Development
- ISO Management systems manual (Policies, Objectives and Mandatory Procedures)
- Process documentation and Standard Operating Procedures
- Risk assessments and tools to assist in Monitoring, Measuring and Analysing.
Phase 3: Implementation
- Coaching and change management of Top Management and attaining Leadership Values.
- On the job training with all staff and workshops on the ISO Management Systems
- Internal Auditor & Maintenance Training
- Internal Audit, non-conformances, corrective actions and reviewing of risks
- Management Review Meeting and Review of all Statistical Analysis.
Phase 4: Certification
- Stage 1 Desk Study Audit with the Certification Body
- Stage 2 Certification Audit, Non-conformances and Corrective Actions completed
- Annual Surveillance Audits to justify continuous improvement.
ISO standards aren’t rigid rules, but rather a set of generic requirements and guidelines to what we as a business should be following.
It’s the basics of business, we tend to overlook the basics and focus on profits, which jeopardies our quality and service.
Your clients are becoming more advanced, better informed and their expectations are growing. Having ISO Management Systems provides organisations with the competitive edge over their competition, by gaining National/International recognition.
In fact, any organisation, whatever their size or industry sector can give themselves a secure future by introducing ISO Management Systems. Remember to look for management systems that can guarantee 100% certification with any certification body such as SABS, TUV, BSI, Bureau Veritas, DEKRA etc.
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