Just over a year ago, me and my colleague were talking about what would be the highest rental yield one can make whilst working in London.
Out of many ideas, one thing that caught my ears was a story from this woman who is doing Airbnb rental arbitrage in Canary Wharf with twenty 2-bedroom units.
She would rent a 2 bedroom apartment at £1,800/month and she’d put that house on Airbnb at £180 per night.
I did a quick search on Airbnb and Zoopla to confirm those numbers, and yeah, those numbers made sense.
That meant if the house is 70% booked, it will make 3,600/month and after paying rent and other expenses, the profit could be easily above 1,000/month per unit. Seems doable.
The competition in Canary Wharf seems to be getting intense and I wanted to leave London and live somewhere else in the near future. There must be more better opportunities in other cities.
If I can continuously identify such opportunities, worldwide, I can be rich.
It’s easy to find out long term rental prices. But, how can I find out how much I can make on Airbnb? I can check out nightly rates from Airbnb website, but how do I know occupancy rates?
So I started searching for occupancy rates of Airbnb in different locations. The data doesn’t exist. Yes, maybe there is some data online saying “Airbnb occupancy rates in London is 45%” but it is too ambiguous. I needed more detailed information.
I’ve found one service offering Airbnb data outside of the US, but it was too expensive ($400+ to see data for 10 cities), and many reviews said data can be inaccurate.
That’s when I decided to work on building an affordable and accurate analytics platform.
I’ve started scraping data from Airbnb. Millions of listings. I’ve started interviewing Airbnb hosts asking them about their occupancy rates and ROI.
After a few months, I’ve started to see the patterns. I’ve built regression models on top of it. Then, scrape data, readjust the models, interview Airbnb hosts and repeat the whole process again and again.
The happiest moment is when Airbnb hosts tell me that my number is pretty close to theirs.
Feel free to take a look on my app, you can click below.