How to start Airbnb business in Kenya, capital,costs, profits, challenges

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Airbnb is one of the most profitable businesses in Kenya at the moment. It’s also among the easiest businesses to start. There are several details you need to know about this business before you start venturing in it.

Airbnb is just a temporary home for an individual which has the comfort of sleeping, bathing and cooking. It’s not like in hotels where food is cooked and served by the hotel workers. In the Airbnb, you buy your own food and cook it.

How to start the business

Start by identifying a location with security, plenty of water and enough population that would hire your rooms. The capital required depend on the number of rooms you wish to rent. If you want to rent 1 bedsitter, then the capital can be as low as Ksh 200,000.If you want to rent entire building of several rooms, you will need Ksh 1 million to Ksh 10 million.

Items required for the business

  1. Bed
  2. Beddings
  3. Bathroom and water
  4. Cooking gas
  5. Utensils
  6. Chair and tables

All these items in one room will cost up to Ksh 300,000.If you have two rooms, you will need Ksh 500,000 to furnish it.With 10 rooms, you will spend more than Ksh 1 million.You can take a loan from bank or Sacco to furnish the house.

Documents required for the business

  1. Proof of Premises Insurance Coverage: It’s important to protect your business and your clients for any unforeseen eventuality.
  2. Recent Health Clearance Certificate: A copy of the current health clearance certificate, issued within the last three months, is required. This certificate affirms that your property meets health and safety standards, ensuring a comfortable and safe environment for guests.
  3. Food Handlers’ Medical Certificate: If you provide food-related services, ensure you have the medical certificates of your food handlers. This certification underscores your commitment to maintaining hygienic and quality dining experiences for your guests.
  4. NEMA ‘No Objection’ Letter: Obtain a ‘no objection’ letter from the National Environment Management Authority (NEMA). This demonstrates compliance with environmental regulations and showcases your commitment to sustainable practices.
  5. Environmental Compliance Documents: Depending on your property’s status, either an Environmental Impact Assessment (EIA) for new facilities or an environmental audit for existing facilities is necessary. These documents emphasize your dedication to maintaining eco-friendly operations.
  6. Tourism or Space Development Plan Compliance: Align your business with local tourism or space development plans. This illustrates your integration into the community’s growth and development vision.
  7. Lease Agreement or Deed of Conveyance: Keep a copy of your property’s lease agreement or deed of conveyance on hand. This confirms your legal entitlement to operate the business on the premises.
  8. Work/Entry Permits for Non-Kenyans: If non-Kenyans are involved in your business, ensure their work or entry permits are in order. Alongside this, maintain copies of testimonials for non-resident directors, demonstrating your adherence to legal requirements.
  9. Company Registration Certificate: For new applicants, provide a certificate of registration for your company. This validates your business’s legal existence and standing within the industry.
  10. Memorandum and Articles of Association: Similarly, new applicants should furnish the memorandum and articles of association. This outlines your business’s structure, objectives, and operational framework.

Those are items which you must have if you want to operate as many Airbnb rooms as possible. But there are many people in Kenya which operate the business without the necessary documents. You may be allowed to operate without them at the beginning but if something happens to your client or to the premise, you will pay hefty price.

The licenses will cost Ksh 70,000 to Ksh 300,000 depending on the size of the business.

Airbnb profits

If you rent a bedsitter in Nairobi for Ksh 10, 000, you will be charging Ksh 1,500 to Ksh 3,000 per client depending on the season and location. There some rooms which get more than one client per day. Assuming your room is occupied for 20 days a month and each client pays Ksh 2,000.You will make Ksh 40,000 that month. If you subtract expenses which range between Ksh 15,000 and Ksh 20,000.You will make Ksh 20,000 that month. Let’s say you have 5 such rooms. It means per month you will make over Ksh 100,000.

There are entrepreneurs who rent entire building of, say 5 floors. They pay Ksh 300,000 per month. With such huge number of rooms and if well managed, you will earn profit equivalent to the rent amount. You will collect over Ksh 600,000.

But the challenge is to buy items for all the rooms. You will need a capital of more than Ksh 5 million.

I will suggest that when starting Airbnb business, start with one room. Learn from that small business and after mastering it, rent more rooms. The business might look easy but challenging.

Also, ensure that your clients trust you. Never install cameras in your rooms. If they discover that you monitor their activities, they will stop booking them.

You know, most of the clients you will be getting is through referrals. If your services are good, they will refer others to your business.

When furnishing the rooms, use the best and highest quality items like seats and beddings. This way, you will make your clients comfortable, they will be coming again and again.

There is one thing that you should not forget. That the business won’t work perfectly without incidents. Your client might die while sleeping. Your client might cook food and get sick. There might be an incident of security. It’s because of such incidences that you need to fully register the business and acquire necessary licences.You should also have standby lawyer to defend you in case of any incident.

Profits: With a well-managed Airbnb business, you will earn Ksh 70,000 to Ksh 10 million per month depending on the size of your business. It’s hard to make losses in this business.

Best location for the business

Nairobi, Nakuru, Mombasa, Eldoret and Kisumu are the best places for the business. There are also other small towns which can do well,like Kisii,Kericho,Machakos and Thika.The business will do well where the population is high and visitors always visit that town.

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