Chatting with my friend Shaf Rasul we stumbled across an interesting business idea. Finding high yield, low risk property investments by using AirBnB.
Around the world there is a huge variance in the price of properties, however there is a lesser variance on AirBnB rental prices.
What does this mean? (For the examples assume that the occupancy is 50%) A £180,000 property in central Edinburgh may rent on AirBnB for £65 per night, 6.59% yield. In contrast a £40,000 property in Warsaw might rent for £45 per night, 20% yield. While a beach side cabin in the Philippines that cost £13,000 rents out for £80 per night, 112% yield... The yield on properties abroad could be far, far higher than yields achievable in the UK, and those properties are accessible at far lower capital amounts.
By scrapping average nightly price per bedroom from AirBnB then contrasting it with the sale price of properties around the world per bedroom, it would be possible to produce analytics on where yields are highest around the globe.
Well wouldn't it be risky to invest in foreign countries? No. AirBnB solves that problem. Rather than invest and manage the properties aboard, how about using AirBnB to find 'Super Hosts' in the high yield areas. Super hosts are AirBnB hosts who have continual exceptional performance, they receive over 70% five star reviews, and have less than an hour response time to enquiries.
By either lending money to super hosts, or doing a profit share with them, or buying a building for them and renting it to them, there are a host of ways to access high yields, while maintaining low risks.
One of the many property ideas I might explore in a few years after I've finished with Apply.Property and need to invest my billions!