An Airbnb investment property business is a business that involves one or more real estate investors pooling their resources and expertise to achieve a particular goal or develop real estate projects basically for Airbnb purposes. When a house is rented out entirely or in part on Airbnb after being purchased, it is seen as an Airbnb investment.
The market share of the vacation rental business is significantly dominated by Airbnb. With a market share of around 20 percent of the whole vacation rental market, Airbnb is projected to be worth about $93 billion going forward.
Steps to Write an Airbnb Investment Property Business Plan
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Executive Summary
Kylian Freeman® Airbnb Investment Properties, Inc. is a standard and registered Airbnb investment property business that will be located in Fort Wayne, Indiana but with an active presence and network all across major cities in the United States.
We have been able to secure all the necessary permits and licenses required for us to participate in the real estate industry. Kylian Freeman® Airbnb Investment Properties, Inc. is positioned to service the Airbnb market in the United States of America. Kylian Freeman is the founder of Kylian Freeman® Airbnb Investment Properties, Inc.
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Company Profile
a. Our Products and Services
Kylian Freeman® Airbnb Investment Properties, Inc. will rent out furnished apartments, houses, and professionally managed resort-condominium complexes on a temporary basis to people. We will also offer services such as front desk check-in, 24-hour maintenance, in-house housekeeping, and concierge service.
b. Nature of the Business
Kylian Freeman® Airbnb Investment Properties, Inc. will set up the Real Estate project as an independent limited liability company (LLC). The parties will sign the joint venture agreement, which details the conditions of the joint venture such as its objective, the contribution of the capital member, how profits will be split, ownership rights of the project, etc.
Please note that an Airbnb investment property is not limited to an LLC. Corporations, partnerships, and several other business arrangements can all be used to set up a joint venture. The exact structure of the JV determines the relationship between the operator and the capital provider.
c. The Industry
Kylian Freeman® Airbnb Investment Properties, Inc. will operate in the real estate and vacation rental industry.
d. Mission Statement
Our mission is to buy land in advance, work with landowners, and then create a plan for what to construct or rebuild on that site. We will enlist investors and forecast the revenue that the new residences or enterprises will generate from the properties.
e. Vision Statement
Our vision of to be listed among the top three Airbnb investment property companies in the United States of America.
f. Our Tagline (Slogan)
Kylian Freeman® Airbnb Investment Properties, Inc. – Your Reliable and Trusted Airbnb Investment Properties Company!
g. Legal Structure of the Business
Kylian Freeman® Airbnb Investment Properties, Inc. will be formed as a Limited Liability Company (LLC). According to this agreement, each company member is responsible for the profits and losses the company incurs.
h. Our Organizational Structure
- Chief Executive Officer
- Project Manager
- Company’s Lawyer/Secretary
- Admin and HR Manager
- Head of Construction and Renovation
- Business Developer/Sales and Marketing
- Accountant
- Customer Service Executive/Front Desk Officer
i. Ownership/Shareholder Structure and Board Members
- Kylian Freeman (Founder and Chief Executive Officer) 40 Percent Shares
- Léonard Renn (Co-Founder and Chief Operating Officer) 30 Percent Shares
- Anderson McPhail (Board Member) 10 Percent Shares
- Thiuram McShera (Board Member) 10 Percent Shares
- Thelma Bobby (Board Member and Secretary) 10 Percent Shares.
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SWOT Analysis
a. Strength
- Managing partners bring industry expertise and put time and effort to manage the project, while limited partners provide the capital required to fund the project.
- Ideal location for Airbnb (thriving real estate and vacation rental market)
- Access to finance from business partners
- Robust relations with property owners and properties investment moguls
- Good returns on investment for investors.
b. Weakness
- The new business will be competing with well-established property developers and other Airbnb investment property companies
- Inability to retain our highly experienced and qualified employees longer than we want
c. Opportunities
- Fort Wayne, Indiana is a thriving market for Airbnb (thriving real estate and vacation rental market)
- Good support structure for Airbnb investment property companies.
i. How Big is the Industry?
It is safe to assume that the Airbnb investment property business is one of the largest industries in the United States of America, given that the market size of the real estate sector, is estimated to be $156.2 billion in 2021.
ii. Is the Industry Growing or Declining?
Available data points to the fact that the real estate and Airbnb investment property industry is growing. As a matter of fact, the market size of the industry is expected to increase by 0.4 percent in 2021.
iii. What are the Future Trends in the Industry
The real estate sector as well as the Airbnb investment property line of business are evolving, and industry players are inventing how to create smart homes. The future of the real estate sales sector will undoubtedly be impacted by technology and climate change (the “go green” campaign).
iv. Are There Existing Niches in the Industry?
No, there is no existing niche idea when it comes to the Airbnb investment property business. This is so because the Airbnb investment property line of business is a subset or a niche idea in the real estate industry.
v. Can You Sell a Franchise of your Business in the Future?
Kylian Freeman® Airbnb Investment Properties, Inc. has no plans to sell franchises in the nearest future but we will open our doors to accommodate more partners and investors.
d. Threats
- Arrival of new Airbnb investment property companies and even property development companies within our market space
- Unfavorable government policy and regulations.
- Community resistance
- Liability problems
- Continuously changing consumer demands especially as it relates to style and design of properties et al.
i. Who are the Major Competitors?
- Awaze
- Airbnb
- Vrbo
- Marriott Homes & Villas.
- TurnKey Vacation Rentals.
- onefinestay
- Vacasa
- Evolve
- Utah’s Best Vacation Rentals
- Roelens Vacation Rentals and Management
- Isle of Palms Vacation Rentals by Exclusive Properties
- Interhome
- Sykes Holiday Cottages
- The Travel Chapter
- Original Cottages
- iTrip Vacations
- My Property Host
- Happy Holiday Homes
- City Relay
- CorpHousing Group.
ii. Is There a Franchise for Airbnb investment property Business?
Well, for now, there are no known franchise opportunities for the Airbnb investment property business.
iii. Are There Policies, Regulations, or Zoning Laws Affecting Airbnb investment property Business?
Yes, there are county or state regulations and zoning laws for Airbnb investment property businesses, and players in this industry are expected to work with the existing regulations governing such business in the county or state where their business is domiciled.
In fact, there exist zoning regulations that regulate land use, lot size, building heights, density, setbacks, and other aspects of property usage in almost every town in the United States.
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Marketing Plan
a. Who is your Target Audience?
i. Age Range
Adults above the age of 18 having the financial means to do business with us make up our target market.
ii. Level of Educational
There are no restrictions on the level of education of those who are willing to engage with us as investors or purchasers of the homes we create.
iii. Income Level
The people we are aiming to conduct business with will have an annual income of between $70,000 and $124,000.
iv. Ethnicity
There are no restrictions on the people we will work with when it comes to their ethnicity.
v. Language
There are no restrictions on the languages that individuals can speak, and we are eager to collaborate with everyone, create homes for them, or lease our Airbnb properties to them.
vi. Geographical Location
Everyone is welcome to associate with us or conduct business with our organization, regardless of their location.
vii. Lifestyle
No investor or client will be prevented from working with us or conducting business with us because of their race, culture, or way of life.
b. Advertising and Promotion Strategies
- Host Themed Events That Catch Attention.
- Tap Into Text Marketing.
- Make Use of Bill Boards.
- Share Your Events in Local Groups and Pages.
- Turn Your Social Media Channels into a Resource.
- Develop Your Business Directory Profiles.
- Build Relationships with players in the real estate and brokerage industry.
i. Traditional Marketing Strategies
- Marketing through Direct Mail.
- Print Media Marketing – Newspapers & Magazines.
- Broadcast Marketing -Television & Radio Channels.
- OOH Marketing – Public Transit like Buses and Trains, Billboards, Street shows, and Cabs.
- Leverage direct sales, direct mail (postcards, brochures, letters, fliers), tradeshows, print advertising (magazines, newspapers, coupon books, billboards), referral (also known as word-of-mouth marketing).
ii. Digital Marketing Strategies
- Social Media Marketing Platforms.
- Influencer Marketing.
- Email Marketing.
- Content Marketing.
- Search Engine Optimization (SEO) Marketing.
- Affiliate Marketing
- Mobile Marketing.
iii. Social Media Marketing Plan
- Start using chatbots.
- Create a personalized experience for our customers.
- Create an efficient content marketing strategy.
- Create a community for our target market.
- Gear up our profiles with a diverse content strategy.
- Use brand advocates.
- Create profiles on relevant social media channels.
- Run cross-channel campaigns.
c. Pricing Strategy
Kylian Freeman® Airbnb Investment Properties, Inc. will be careful to account for profits, insurance, premiums, licenses, economies of scale, and the total package for each property when developing our pricing plan
In all our pricing strategy will reflect;
- Cost-Based Pricing
- Value-Based Pricing
- Competition-Based Pricing.
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Sales and Distribution Plan
a. Sales Channels
Utilizing partners and third parties, such as referral partners, affiliate partners, strategic alliances in the real estate and brokerage industries, and freelancers to help direct clients to us, is a key component of our channel sales strategy.
The 4 Ps of marketing—place, pricing, product, and promotion—will also be utilized by Kylian Freeman® Airbnb Investment Properties, Inc. By thoughtfully incorporating each of these marketing tactics into a marketing mix, we can create a portfolio of noticeable, in-demand properties that are offered to clients at a price that is both competitive and affordable.
b. Inventory Strategy
Kylian Freeman® Airbnb Investment Properties, Inc. will operate an inventory strategy based on a day-to-day approach for ordering, maintaining, and processing products in our warehouse because we will need the necessary building materials on a regular basis.
We will approach the development of our strategy with the same level of care and diligence as we would if we were formulating an overarching corporate strategy.
c. Payment Options for Customers
Here are the payment options that Kylian Freeman® Airbnb Investment Properties, Inc. will make available to her clients;
- Payment via bank transfer
- Payment with cash
- Payment via credit cards
- Payment via online bank transfer
- Payment via check
- Payment via mobile money transfer
- Payment via bank draft
d. Return Policy, Incentives, and Guarantees
The nature of the products (properties) we offer at Kylian Freeman® Airbnb Investment Properties, Inc. does not allow return policies or incentives, but we will guarantee our investors that their investment will yield a profit. Through all economic cycles, we will set our operating margin at between 15 and 20 percent of the gross development value (GDV).
e. Customer Support Strategy
We will solicit input from customers as part of our customer service approach. With their wants, experiences, and pain points in mind, we will be able to serve all our clients and investors and provide them with exceptional Airbnb properties. To be able to accomplish this, we will work using a powerful CRM program.
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Operational Plan
Capacity planning, location planning, layout planning, quality planning, and method planning are all included in our operating plan.
The plan will have a marketing, sales, and operations component, and overall, we want to increase our revenue by 25% in the second year. Attracting investors would be part of the plan’s operations section and would allow the company to expand its assets and service offerings and support revenue development.
a. What Happens During a Typical Day at an Airbnb investment property Business?
- The office is open for the day
- Documentation and other administrative works are conducted throughout the day
- Airbnb apartments are rented out
- Housekeeping
- Marketers go out in the field to market our Airbnb properties and services
- If there is an ongoing property development project, the required team and machinery are sent to the field to carry out the project.
- The team and machinery return to base (office) after the day’s job
- The report of the day is written and submitted to the required authority
- The office is closed for the day.
b. Production Process
There is no production process when it comes to Airbnb investment property business except the construction of properties, ensuring the properties are ready to welcome guest and rent are collected.
c. Service Procedure
There is no defined service procedure for an Airbnb investment property business.
d. The Supply Chain
Key figures in the real estate and brokerage industries will be relied upon by Kylian Freeman® Airbnb Investment Properties, Inc. to refer business deals to us.
e. Sources of Income
Kylian Freeman® Airbnb Investment Properties, Inc. makes money from renting out furnished apartments, houses, and professionally managed resort-condominium complexes on a temporary basis.
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Financial Plan
a. Amount Needed to Start your Airbnb investment property Business?
For Kylian Freeman® Airbnb Investment Properties, Inc. to effectively launch our Airbnb investment property business in the United States of America, an estimate of $3.5 million is required. Please be aware that this sum covers our staff salary for the first month of operation.
b. What are the Cost Involved?
- Business Registration Fees – $750
- Legal expenses for obtaining licenses and permits – $7,300
- Marketing, Branding, and Promotions – $5,000
- Business Consultant Fee – $2,500
- Insurance – $5,400
- Rent/Lease – $200,000
- Other start-up expenses like commercial satellite TV subscriptions, stationery ($500), and phone and utility deposits ($2,800)
- Operational Cost (salaries of employees, payments of bills et al) – $100,000
- Start-up Inventory – $15,000
- Store Equipment (cash register, security, ventilation, signage) – $4,750
- Furnishing and Equipping – $80,000
- Liquid Cash for Execution of Projects: $2.5 million
- Website: $600
- Opening party: $3,000
- Miscellaneous: $2,000
c. Do You Need to Build a Facility?
Kylian Freeman® Airbnb Investment Properties, Inc. will build a new facility for our Airbnb investment property business and it will cost us $3.5 million.
d. What are the Ongoing Expenses for Running an Airbnb investment property Business?
- Transportation cost
- Cost of building materials and supplies
- Utility bills (internet, phone bills, signage and sewage et al)
- Salaries of employees
e. What is the Average Salary of your Staff?
- Chief Executive Officer – $85,000 Per Year
- Project Manager – $72,000 Per Year
- Head of Construction and Renovation – $70,000 Per Year
- Company’s Lawyer/Secretary – $68,000 Per Year
- Admin and HR Manager – $45,000 Per Year
- Business Developer/Sales and Marketing – $42,000 Per Year
- Accountant – $40,000 Per Year
- Customer Service Executive/Front Desk Officer – $30,000 Per Year.
f. How Do You Get Funding to Start an Airbnb Investment Property Business
- Raising money from personal savings and sale of personal stocks and properties
- Raising money from investors and business partners
- Sell shares to interested investors
- Applying for a loan from your bank/banks.
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Financial Projection
a. How Much Should You Charge for your Product/Service?
At Kylian Freeman® Airbnb Investment Properties, Inc. our fee will be based on the location and type of property we want to put out for short-let.
b. Sales Forecast?
- First Fiscal Year (FY1): $1.5 million
- Second Fiscal Year (FY2): $2.3 million
- Third Fiscal Year (FY3): $3.9 million
c. Estimated Profit You Will Make a Year?
The ideal profit margin we hope to make at Kylian Freeman® Airbnb Investment Properties, Inc. will be between 16 and 20 percent on development costs.
d. Profit Margin of an Airbnb investment property Business
Kylian Freeman® Airbnb Investment Properties, Inc. will collect developer fees as the project progresses that will range from 5 percent to 10 percent aside from making profits off every Airbnb property that is put out for rent. Please note in planning our property development project, we will make sure that the bottom line shows a suitable return for the money and effort we put into it.
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Growth Plan
a. How do you intend to grow and expand? By opening more retail outlets/offices or selling a franchise?
Within the first five years of starting the company, Kylian Freeman® Airbnb Investment Properties, Inc. will expand its business by first creating more offices in significant American cities, and then by enlisting more partners.
b. Where do you intend to expand to and why? (Geographical locations)
- Toledo, Ohio
- Indianapolis, Indiana
- Cleveland, Ohio
- Wichita, Kansas
- Detroit, Michigan
- Louis, Missouri
- Cincinnati, Ohio
- Columbus, Ohio
- Lincoln, Nebraska.
The reason we intend to expand to these geographical locations is the fact that available statistics show that the cities listed above have the highest and most thriving real estate markets in the United States.
As a matter of fact, the median listing price for a home in Fort Wayne is $199,947, which is around 102% less than the $617,890 national average. Fort Wayne is a good chance for those looking to invest because home prices there have dropped by 7.6% since July.
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Exit Plan
Kylian Freeman® Airbnb Investment Properties, Inc. desires to merge with a global real estate firm so that, after the founders retire, the business can be in capable hands.
The objective of merging two or more Airbnb investment firms on a global scale is to attempt to achieve synergy, where the new company’s management team and board of trustees are well-organized and the total is bigger than the sum of its parts.-