Edinburgh Airbnb Joint Venture Strategy: Approx. £100k Capital Project
Edinburgh · Airbnb / joint venture
In this project, two investors entered into a joint venture to purchase a property in Edinburgh.
Initial investment
- Purchase price: Approx. £300,000
- Deposit: Approx. £75,000
- LBTT & ADS (Land and Buildings Transaction Tax & Additional Dwelling Supplement): Approx. £28,600
- Legal & professional fees: Approx. £2,000
- Total capital requirement: Approx. £105,600
- Contribution per investor (50-50): Approx. £52,800
In this project, two investors entered into a joint venture to purchase a property in Edinburgh.
We helped the client secure a short-term let licence and organise the property's operation as an Airbnb.
During the year
- Occupancy: approx. 67%
- Average nightly rate: approx. £292/night
- During peak demand periods and festivals, rates frequently exceeded £400/night
- During quieter periods, rates were significantly lower
Annual performance
- Annual turnover: Approx. £71,000
- Net annual profit: Approx. £32,000
- Net income per investor (equal split): Approx. £16,000
- Return on invested capital (per investor): Approx. 30% annually
Although LBTT and ADS in Scotland can significantly increase the upfront capital required for these types of purchases, the Edinburgh market is still considered by many investors to be one of the strongest short-term rental markets in the UK. High tourist demand, international festivals, a strong corporate presence, and steady visitor numbers throughout the year create the conditions for highly attractive returns, provided, of course, that the right property is selected, in the right area, and with the right management.
Results
- Total capital requirement: Approx. £105,600
- Contribution per investor: Approx. £52,800
- Net income per investor: Approx. £16,000
- Return on invested capital: Approx. 30% annually (first year)
- In simple terms: Two partners split capital and income equally on a licensed Edinburgh short-term let in a top UK tourist market
Past performance is not a guide to future results. Figures reflect a specific client situation, market conditions at the time, and agreed fees. Your outcome will depend on your strategy, financing, and the property you buy.