AirBnb Design and Setup
You’ve found your property, negotiated your terms, secured a loan, found insurance, and forked over a small fortune to get the home…all you want to do is start cash flowing this thing! We’ve been there.
But now it’s time to design and furnish it. Should you go cheap and quick? Or spend more time and money on professional design? Does design actually impact your returns?
Here’s some data from AirDna showing the variance in revenue between properties at the 25th, 50th, and 75th percentiles of returns in zip code 37203.
As you can see, in October of 2022, the top quarter of properties made $7,600 MORE in that month alone! since 2018, the numbers have been consistent — the top quarter of properties make outperform the bottom quarter of properties by $5,000 -$9,000 each month!
A technical note - we the 75th percentile here as reference. This generally excludes the ridiculously nice properties with rooftop pools, square footage that significantly exceeds the majority of the market, etc. Similarly, we use the 25th percentile because it tends to eliminate most homes that aren’t relevant to the data set…maybe a 4-bedroom fixer upper, a home that was used mostly for personal use, etc. This confines our data to properties that are similar enough to compare design quality.
Of course some of this variance can be attributed to the quality of a property’s management, but the data is clear: better properties make more money…a lot more money.
Perhaps more importantly than the revenue boost, you gain some market resilience in the process. As many STR owners are discovering, the secret is out — Nashville is a fantastic market for short-term rentals. A successful business model used to be “buy a Nashville home, fill it with bunk beds, make 6 figures a year and move on.” However, the market is becoming more saturated and, as expected, the first homes to suffer are these cookie cutter “bunk houses”. Why would a guest book this when they could stay at a home with unique and original street art like the Montague Art House.
Or, perhaps they’d rather stay in this micro-hotel design.
In any case, the time and money spent on design is crucial to seeing great returns in the good markets and protecting yourself from downside risk in a sluggish market (as the graph above shows during the COVID-19 pandemic)!
We work with many designers and oversee this process, ensuring their work is robust enough to withstand the commercial operation of a property and unique enough to maximize returns.
We’d love to tell you more — feel free to reach out anytime!