How to start an Airbnb business in India | everything you need to know

hi everyone welcome to today's video so on today's video I'm going to speak about three four simple points one is that many of you have been interested in starting your own Airbnb business so I'm going to help you understand how exactly you can do that number two how to make your annb profitable number three how to start an Airbnb business with zero money absolute zero money all this is based on my practical experiences I own a lot of properties in Goa they have been converted into arbnb I'm bui

lding an Airbnb Resort in Goa so I'm going to talk about that also why did I make that decision so practical experience a B I keep on traveling so right now I'm in fukit Thailand so I've been traveling in Southeast Asia for the last few days I stay only atns why because I have a family I have small kids is very important and all that stuff so from that perspective I really like using Airbnb myself so I see value in it so I will help you understand all these practical points on today's video and

I will take you through this entire story in 67 very simple point so okay Point number one is logistically Airbnb a sensible business to start business fundamentals does it support thatn everyone wants to do Airbnb suain so fundamentally is Airbnb a good business so I will speak from two fundamental points here one is from my own use case so consider this that if you are traveling with your family four members maybe like two adults two kids or you might be two adults and with your parents so aga

in four people so so if you go and book a hotel room even in then room and easily like depending on where you are booking it an average hotel would cost somewhere between like 3,000 can you do the same at 6,000 at Airbnb yes and the facilities will it be better at Airbnb maybe depends on how you consider facilities to be convenience especially if you vegetarian traveling TOA then you can you know all that so all those conveniences are there so airbn so that is one good prominent thing about Airb

nb priv that okay you are staying in your own place so commercial feeling so a lot of Travelers prefer this and this is a very clear use case that's it and this is where the second angle comes into the picture that from a business Viewpoint airbn then does the math up running your ownn and just say the model that I currently work on is that I don't run my own airbnbs I basically Outsource it I give it to an Airbnb manager and they manage it basically I have my airbn so to say all you know so for

me the headache is close to zero it is just that I have given them on rent now see this is where the beauty is and this is where you need to understand that from a business Viewpoint short-term rentals are much more prominent much more effective compared to long-term rentals for example Delhi mbai and if you buy that Maan at like 2 CR something then your rental yield will be 3% 4% maximum right so what is the meaning of rental y well in simple word means that 3% of 2 will be 6 lakh so 6 lakh is

the rent that you will be making so 50,000 that is how it is you guys can let me know in the comment box so this is an issue with long-term rentals and therefore your rental y also goes low but running annb touches that shortterm y so short one month and all that so the rental Yi you make during that period is fairly high now of course you will say off yes definitely but this the math that you need to understand is that on an average this is what the industry average is that if you have a flat

on Airbnb or if you have a villa on Airbnb then it gets rented out for roughly 200 days in a calendar year this is an area where I have a flat this is a flat that I own during season it's much higher off SE it's like 3 and a half so from that perspective average will come out to be somewhere like 5 five and a half six so from that perspective if you do like run 200 day math so the average yearly income from this will be somewhere around 12 lakhs right so 12 lakhs will be the revenues right what

the Airbnb manager will be making and they will be paying me my rent right so this is at r on ,000 per month all that asset appreciation so from that perspective if you run the math it roughly comes out to be days on average R so therefore short-term rentals are more stronger than long-term rentals and complete Outsource been speaking that how much money can you make by running Airbnb business and will it be a profitable thing is that something that I can turn that into a full-time job kind of a

situation for me individual but I'll give you like a basic idea around it see in order to buy like a decent property at least in Goa now of course rental market everywhere will differ Tha so from that perspective very hard for me to set general rules but just to give you an idea on return on investment this is what I would say that typically up then it can go all the way from 2 CR 2 2 all the way till 10 15 massive market right but let's pick something like in 2 to 3 CR range V now these vas wi

ll typically go for 10,000 rupees a day right so that is the average rent that you could expect ma multipied by 20 so 2 3 and 10,000 is the rent so you making how much so you making roughly 200 multiplied by 10,000 so that gives you 20 lakh rupees a rent a year and if you put that compute the yield it's a very decent healthy yield so 23 6.66% right so please note that I'm speaking about Yi I'm not speaking about underlying property appreciation for example if you buy a flat you get rent that is

yield on top of that the value of that flat also typically goes up especially if it is a good flat or good Villa or good land so that is underlying property appreciation so if you buy a good property put it on Airbnb you will get rental Y which acts like a dividend so to say and underlying property appreciation I teach all this on my real estate course also I'm launching the next batch in case you guys are interested in picking up right type of properties there is an inperson Gua event that I wi

ll be doing you can check the links in the description box for that course the seats are likely to get filled out this week itself so in case you are interested do definitely reserve your spot so I hope that the second point about Roi is clear for example if you and I cannot go and invest like so leverage means that for example if you have to buy one CR property you don't need to invest one CR right of the B okay you need to invest maybe like 20% money rest 80% can be financed through loanh flow

so if you buy very good Yi property so the rent that you are getting you can use that to offset your Emi okay so please remember this also that there's leverage in real estate a 1 CR property can be bought at roughly 20 LHS down payment and rest 80% can be financed as long as you are buying a sensible good property you should be okay right so this is part A so flat that I purchased this was fairly less so this was around 70 lakhs and it's giving me a fairly healthy he so all the numerous option

s are there so it's not as ifes with a decent amount of saving you can start your Airbnb game which brings us to the Third Point tell me some like you know model where I don't have to put in any of my money and I can get all the honey right so is there a model at play model airbn first is that you buy build operate so for example I'm doing this so I'm buying a land I will build on it and I plan on operating it okay so this is buy build and operate now this requires a level of expertise in terms

of buying the land uh doing due diligence access to financing the this require higher level of experience expertise that's part A neither I'm going to paint such a picture that's part I hope that all of you understand this point there are a bunch of related things for example manage how will you manage listing how will you hire staff how will you manage your property so this is a complicated model unless you're living in Goa or a place where you own the Airbnb I would not recommend this buy buil

d and operate model second model is called as buy and operate or buy and Lease model right now here what you do is that see if you like a villa in a society say yeah pbnb for example this is in a society it is on arbnb this was the first Goa property that I purchased now this is in a society so you can simply go and buy it if you're getting a good deal you buy it now then what you can do you can operate it yourself customer management otherwise you can go and hire a Airbnb management company som

etimes you can give it to the Builder itself and the Builder when they are building such projects they will say you known um we will charge like 20% commission something like this so standard commission typically it is around like 20% that they charge so depending on which area you're buying all that stuff so all those points need to be taken care of this is the second model the third model is do not buy just operate right so what this means is that for example you say I cannot invest like LS bu

t I want to get into Airbnb game I want want to test it out so for example I have some properties that are lying right idle so you will come to me you will say I know the Goa Market I'm very good at customer management I worked in Hospitality this is my Airbnb plan what I plan to do give it to me I will manage your ebnb here is the monthly fixed rent you can take from me now see third model execute requ two things because you will still need to put in your security deposit at least bunch of othe

r different things are there all that stuff is there okay so it's not free that's what I want to communicate but definitely this is low Capital that's part A Part B and more importantly here is that you must understand or at least day rent you should be good at probably making it like 250 days right because that is what your Alpha will be Bing and all that stuff and you know I'll be happy if I get 200 days worth of rent whatever you make above that that is the actual Alpha that you're generating

for yourself 50 days that from One V right if the average price average rent will be 10,000 a day so 50 additional days if you are able to generate you are making how much you are making 5 lakhs of additional income from One V right so if you can do with five vas or 10 vas that's substantial income that you can generate no doubt about that it depends on your ability to Market and bunch of other different things customers so all those things are there are you into Hospitality management do you k

now customer care all that stuff so next question you know all this is great I would love to start my Airbnb business K start right so okay first and foremost thing is that you should start where short-term rental market is there for example if you try to do this in Delhi short-term rental market have no okay so that's little bit problematic if you do it in lonavala if you do it in some other good location Goa Shimla all these are good locations according to me so that is there you can definitel

y pick that that's point one point two you should have some kind of competitive Advantage now competive advantage means building like what sense would it make right for you to buy such a property there will be over supply of airbnbs and yeah it will just be bad for you so pick locations where you think that Supply is not going to come up like massively okay uh or creating Supply in that location is going to be difficult so those are the locations that you should typically pick third related poin

t that you should Target markets where premium customers go right now I'm not trying to stir like a political debate or religious debate here for example right now in aodha lot of builders are just right for example one square of land in aodha by one of the Builder is getting sold for 16,000 rupees per square feet this is crazy Price Right bicker by if you go and invest in such properties ultimately you'll have to charge much higher rate right because you'll have to ask for a much higher differe

ntial in terms of when you are renting it out on short term that becomes a problem it will be extremely difficult for you to rent out or command such very high rents especially on religious circuits go on aod Airbnb so to say and typically rent a place so you'll not find it to be very very expensive so I don't think that there will be a premium segment customer base which will go to these type of locations that's my personal opinion of course I can be wrong now it's your call but I'm just sharin

g one concept with you okay so the next Point comes regarding some of the finer points that people Miss in terms of running Airbnb so the first key point is the licensing requirement at least licenses are required in Goa many people run airbnbs illegally problematic because if for example you are renting your property to strangers that is what happens onbn and all that stuff police will come after you right so please take licenses there is basic licensing fee I have taken licenses if you the own

er of the property you need to have license do it okay so it's not going to cost you a bomb it's required very minimal investment so to say and it has to be done so please do it a b please check where you are buying that property does that society allows you to do airbn how many how much money have you invested in why are you giving me Gan I don't I fail to understand people have all the opinions in the world ask them how much money have you invested in Goa the answer is zero right so anyways co

ming back to the topic that see guys basically these are due diligence points that you can pick up easily right go and speak in the society that is Airbnb allowed or not how difficult is it to figure it out if it is allowed what is the Clause what does the minutes of the meeting of society meeting how is the society registration Works what is the out don't buy it in a society where Airbnb is not allowed and then someone comes after you it becomes a problem right so I hope that you get this basic

Point Here Local rules will apply for example the rules in Gua might be very different from how something is being stru in NOA or so you have to pick again accordingly the third Point Here Comes Around taxation that okay how does Airbnb taxation comes into the picture see this will be your business income now the thing is that you might think so I might be taxed at 30% maybe maybe not if it's a separate business for example technically I'm right now traveling now this is my Airbnb expense right

I'm I'm legitimately coming here observing other airbnbs booking my fees learning more about Airbnb business all that stuff researching about different markets whether I should be picking more airbnbs maybe International expansion so all this will be business expense right so please understand that aspect also that yes it will be taxed at your slab so to say but this can some of the expenses can be offset as a part of that expense of the business right so that is another important point but ple

ase CS consult now comes the final point in fact point but I'm just recapping very important points here now comes the final point that but I want to buy Airbnb is it something that I could do yes okay all the facilities are there it's not as if that you have to stay in Goa to manage one year VNV no nothing like this you have to build a system around it no doubt about that and there is enough help that you can seek in case you are buying the right type of property then comes the sixth and final

point from my side that how good is Goa Airbnb Market is it going to Boom not boom see guys I'm not here to start a debate or start a fight buy wherever you want to buy a property all I'm simply telling you are basic logical points that see short-term rentals compared to long-term rentals that's a fact it's not just me saying it you can apply your brain and figure out why that is the case that is the more important Point second key point that if for example you there is no way for you to manage

your Airbnb in yeah so then don't come right there is just no point in debating that buy something in your own City but having said this the wherever you get an opportunity to do short-term rentals your rental yield will be higher underlying property appreciation that is not given but typically speaking if your rental yield itself is 5 6% then underlying property appreciation will be 4 to 5% any place so C from that perspective therefore I like the Goa Market from an Airbnb point of now before k

eyboard Warriors jump in and say return 10% this is what we get in like Mumbai 2% 3% Delhi 2% 3% again you're speaking about long-term rental market I'm speaking about short-term rental markets completely different thing it is like you saying are you know what Cricket 12 so it's completely different things that we are speaking about so you have to think from that so okay so final segment I'll have pra just teach you very quickly about some of her experience of managing my airbnbs what are some p

oints that she would share from our journey and then we'll close out the video again a humble appeal that in case you are interested in learning more systematically about real estate investing you can check the links in the description and comment box regarding my new course launch and you can Avail a seat it's going to be a live program where we will create a community of investors as well and you guys can meet each other learn from each other and it will be an exciting learning experience so o

ver to pra and then we'll close out the video hi guys so I've been managing A's this property since the last year and it's been a journey before we listed this property on Airbnb or before we put it out for short-term rental the first thing that we did was get theod Goa tourism license this is the legal prerequirement to run short-term rental business in Goa or if you want to run Airbnb on your property now after we got the license we prepared the property put in basic Furniture took care of the

things that guest might need filled it with toiletries tows Etc now when it comes to listing on Airbnb the process is quite straightforward you have to create an account as a host there is an option to put a property as listing there you fill in your your property details put in some pictures verification from your end would also be required and after all this is done the property is listed a tip here from my side would be to focus on good quality pictures because first impression matters when

a guest is scrolling through to book the state they will first look at the pictures and then click on your listing to know more about the property now since we have listed we have made close to 4 lakhs as profit that is after deduction of all expenses paying off bills taking care of repairs Etc this is in a period of approximately 5 months now some key lessons that I learned in this journey of running an Airbnb in Goa first is to do things the legal way for example in Goa we require a tourism li

cense to run short-term business on any property similarly in other states the laws May differ but I would always advise to do things the legal way to avoid any kind of future trouble that might come up you're going to interact with different guest you're going to have different people in your property and if something goes sideways then if you're doing things legally you will have nothing to worry about and it will save you tons of headaches second please do market research and understand the s

cope of your Airbnb returns in short term the daily rental will depend on the location of your property plus its demand if your property is in an isolated location and the tourist footfall there is not much then the daily rental will also be not high thus the ROI on Airbnb differs from property to property understand your location look at other similar kinds of property as yours in the same or nearby locations ask locals how the tourists there are how much are they willing to pay and then you wi

ll understand it better a side tip here would be when you're running your Airbnb try to distinguish your property from other ones in your area that can be done if you're providing a unique service or you're giving a better priz than the other host third and most important in my opinion reviews matter and do not be shy in asking for it when a guest check out do not hesitate to ask them for good reviews or feedback of your property Airbnb organically promotes those properties which have good revie

ws and that you get when you provide your guests with good experience and the best way to do so in my personal experience has been to put yourself in in your guest shoes that is treat your Airbnb property as a house where you are going to live in this way you'll understand what requirements are to be fulfilled what are the gaps there what amenities can improve your state can improve the experience and make your guest more comfortable now before I close out my part an additional bonus tip for all

the newcomers in this Airbnb game focus on cleanliness and hygiene for your guests it doesn't matter if you have a 1 bhk 2 bhk a villa a penthouse your guest would care about the hygiene of your property more than whether it has direct beach access or not so these are the points that I learned and I really hope that they help you