The astonishing success of Airbnb has had a profound effect on the short-term rental market. In its wake, we have seen the rise of many companies offering various services that work hand in hand with the Airbnb business model. One of the most successful and promising of those companies is Airsorted. I visited their Farringdon offices to sit down with Founder and CEO James Jenkins-Yates.
Airsorted: The Inspiration
James founded Airsorted with the aim of making it as hassle free as possible for people to share their homes.
It was early 2015 and he had quit his job in finance to dedicate his time to learning how to code. In order to subsidise his living expenses, he put his bedroom on Airbnb and lived in his lounge.
It was at this point that he realised how time-consuming and stressful short-term renting could be.
‘When you include all of the cleaning, laundry and admin etc that goes into the process, you realise that this is a second job, not just a second income.’
For people who have to hold down jobs, James thought, and for those who rent property in a far away country, running an Airbnb must be exhausting.
‘Amazingly, there was no real competition at the time,’ James continues. ‘It took me 27 minutes to put together a landing page and then I threw £100 worth of Google Ads at it.’
Straight away he was generating ‘loads’ of leads. As a result, he found himself running around town delivering keys and replacing linens for his brand new customers.
‘I soon realised that each person’s needs were very similar. They needed help with access, cleaning, interior decorations, stuff like that. It only took me about two weeks of that dashing all over the place before I was confident I had proof of concept.’
James was smart with his early observations: it wasn’t just the hassle that was drawing people to his new service, but also the fact that Airbnb hosts are awarded a star rating by their guests. These ratings directly impact the amount of rent you can charge.
By hiring James to take care of everything, the hosts could relax in the knowledge that they are generating income and that their rating would remain strong.
Building a strong model
Airsorted offer the choice two pricing structures:
- 14% of total income.
- Guaranteed monthly rent.
The first option is pretty clear; Airsorted handles all of the property management for your guests and take 14% off the top in return.
The second option is interesting; it essentially means that Airsorted rent your property from you on a permanent basis in return for an agreed, guaranteed monthly amount. They then go ahead and sublet it to Airbnb customers.
‘The nature of the market means that we can also actively encourage repeat custom. After a host has used us a few times, the awesome feedback and ratings that we have secured them means that they can increase the rent on their property by up to 25%.’After a host has used us a few times...they can increase the rent on their property by up to 25%.’Click To Tweet
Removing barriers & attracting clients.
Such an ability helps to negate one major barrier to property management; the cost. People are often concerned about losing too much of their income on something they could do themselves with a touch of elbow grease and a smattering of can-do spirit. But by ensuring that each property is marketed to its maximum potential and promising the strongest possible returns, Airsorted still proves a financially viable option, especially if you have a regular stream of guests.
Interesting James tells me that most of Airsorted’s clients have never used Airbnb before. They know they want the income, but they also already know that they’re not willing to take on the great responsibility that is operating and maintaining their investment.
There is also another interesting customer base that James tells me about;
‘Airsorted can help landlords make extra profit on their rental investments, effectively 15 months worth of rent in 12,’ claims James. ‘We have many clients who will let their property on the traditional market during the winter, and then move it on to Airbnb via Airsorted for the three months of summer.’
Demand for rentals over summer is so much higher that you can charge double that which you normally could. Therefore, in those three months, you can make 6 months worth of rent....you can’t be afraid of taking a risk if you want to get out ahead of the pack.Click To Tweet
Looking forward, James has a very clear goal:
‘We want to be global. We are currently in London, Dublin, Sydney and Edinburgh; in the next 18 months we hope to move into 15-20 different countries.’
It’s not big bet to say that Airbnb will continue to grow, and if Airsorted has even shown us a little of what it’s capable of achieving very short spaces of time, there must be a well earned confidence among the C-Level and the staff.
I close by asking him whether such confidence leads the mind to think about the tempting possibility of making a pivot. One which leaves them facing straight at the long-term rental market, as well as the short? It wouldn’t require a huge adjustment, and many of the stagnant property old-boys are notoriously unprepared for possible disruption, are they not? James remains coy in his answer:
‘I guess no, it wouldn’t take an awful lot for an Airbnb property management company to pivot towards more long term rentals.’
It will be interesting to see if this is a route that Airsorted and it’s contemporaries attempt to follow. The instant success that James found with Airsorted proves that the demand is there for an affordable, profitable and convenient property management system. And if James has taught us anything here, it’s that you can’t be afraid of taking a risk if you want to get out ahead of the pack.