Everything you need to know before you invest in Airbnb apartments in Prague
Post date: Dec 22, 2016 9:11:51 AM
Everything you need to know before you invest in Airbnb apartments in Prague
In continuation of our previous article on this topic, we are delighted to present before you the updated figures in regards to Airbnb activities in the city of Prague. These figures are derived from the Airdna site that assembles and analyzes the data regarding the activity of the Airbnb rented homes worldwide. As of December 2016, Prague had 5170 vacation units of the Airbnb type. Of them, 980 are considered by the organization to be Superhosts, that is those who offer extraordinary service. Throughout 2016, Prague was the site of 10,000 Airbnb transactions, of which 30% were performed in vacation units with a five star ranking.
Hosting grades
The Airbnb vacation units in Prague are divided into 3 hosting grades according to the following illustration:
Hosting in the entire apartment- 75.4%
Hosting in a private room- 22.7%
Hosting in a shared room- 1.8%
Size of the vacation units and the effects of size on pricing
Most Airbnb rentals in Prague occur in vacation units that include a single room as described in the aforementioned illustration.
The size of the vacation unit affects the price as described in the illustration in the next graph.
A calculation of income per room results in the following figures:
Rental of two rooms- 103.5$ per room
Rental of three rooms- 97$ per room
Rental of four rooms- 116.5$ per room
The conclusion is that it is economically most beneficial to rent out single room vacation units that result in an average income of 145$ per night. Nonetheless, in order to avoid the intense competition due to the high availability of this type of vacation units, an additional option should be considered: namely, offering for lease studio apartments that will result in an income of 131$, more than the per room income of 2, 3 and 4 room vacation units.
Income by month
The income deriving from renting out vacation units via the Prague Airbnb site are typified by an average daily rate per month described in the below figure:
Rental period
Use of Airbnb type vacation units in Prague is according to the following distribution of rental period:
Rental period of one day to three days- 61.6%
Rental period of four days to six days- 20.2%
Rental period of one week to nine days- 12.8%
Rental period of more than ten days- 5.4%
However, the pattern of availability of Airbnb units in Prague is significantly different from their actual use:
Availability for over ten days- 38.5%
Availability for a day to three days- 27.8%
Availability for four to six days- 17.4%
Availability for a week to nine days- 16.3%
What this means is that there is considerable demand for short rental periods (one day to three days), and that this demand exceeds supply, which means most leases (over 60%) are made for a short rental period of one day to three days, but the supply for these ranges is low: less than 27.8% of the vacation units in Airbnb are available for these periods.
In summary
Given the above, renting out a vacation unit in Prague in the framework of Airbnb is most desirable for studio apartments rented out for short period, particularly for June to September. It is also economically desirable to rent out one-bedroom apartments for a short period but such apartments can expect fierce competition since most vacation units in Prague are of this size.
For additional details regarding investment or purchase of real estate, assets in Prague please contact us, and we will be delighted to be of assistance.