Maximising your property’s success on Airbnb.
By Rich Harvey, Managing Director and Founder propertybuyer
The rise of Airbnb (and new companies like Flipkey and VRBO) have created a wave of new opportunities for homeowners. Not only is it an easy way to earn extra income, but it’s also a way for property investors to recoup their the property value in a more flexible and, studies suggest, faster way than traditional renting.
In addition, these property sharing services allow you to let out your whole house, or just a single room in it. This means you can make money off your property without moving out and, unlike traditional renting, you can choose how many days of the year you’d like to do it.
Thinking of buying a property or leveraging one you already own? Here’s what makes the perfect Airbnb home, and the pros and cons of using the service as a means to recouping your investment.
Is It For You?
Many homeowners who would previously have considered long-term rental have found that, that in a good month, they can actually make more money using Airbnb.
A 2017 global study by global real estate company Nested has found that Sydney, Perth and Melbourne are in the top 50 cities where homeowners can recoup the cost of their investment faster using Airbnb.
Their research indicated that a three-bedroom home in Sydney could be paid off in around seven years when listed on Airbnb, and that same property could take about 26 years with a traditional tenant paying the median rental price for that area.
On the other hand, Airbnb is short-term rentals, and you could end up with unexpected vacancies - especially if you live in an area with a quiet off-season.
In addition, Airbnb is a ‘hosting service’, which means it’s up to the host to provide the furniture, supplies, amenities and information about the area, your home and more. Airbnb hosts are expected to make themselves available to travellers for information, and they also have to arrange the multiple check-ins every month, so it can be more labour intensive than a typical renting situation.
What gives a home ‘Airbnb potential’?
Uniqueness of the listing:
Airbnb’s most popular listing isn’t an affordable apartment in a tourist hotspot like Paris or New York. It’s actually a treehouse in Atlanta, Georgia. Yes, that means people are actually choosing the accommodation over the destination, which shows the power of an attractive listing.
You may not have a treehouse to offer, but if your home is unique or offers visitors an ‘authentic’ experience of your city then it’s likely to be a popular listing.
There’s a reason that people choose Airbnb over hotels, and it’s because they’re after an experience. Any home that’s got something special or different about it is going to be more successful on Airbnb than a listing with less soul.
Business and pleasure:
A spot in a remote beach location is lovely, but it’ll limit the number of people interested to vacationers. People use Airbnb for business as well, so a location like Manly does double duty: it appeals to holidaymakers and business travellers alike.
Major cities and tourism hotspots are obviously the most popular areas in every country.
Sydney is Australia's Airbnb hotspot, accounting for more than 25% of the nation's listings.
Lastly, because many tourists are unlikely to have cars, proximity to public transport or being close to cafes, markets, restaurants and other activities (galleries, historic areas, hiking trails, wine farms) can also be a selling point.
Entire houses over shared rooms:
People who have entire houses to rent out will obviously earn more income from their guests, and renting in this way is also more versatile, because you can rent out all rooms in your house to different guests over the same period if you can’t find a single guest to rent out the entire home.
Size and versatility:
Size: Two bedroom, two bathroom apartments tend to be the most versatile type of listing.
Bathrooms: If you’re thinking of renting out a single room in your home, an additional bathroom (so guests don’t have to share bathrooms with hosts) can mean you can add to the rental price.
Views and decor: Views and stylish decor choices make for more popular listings and allow you to charge more for your listing.
If you’re a homeowner or a property investor, Airbnb and its contemporaries are worth considering.
As of October 2017, Airbnb has about 150 million users globally, and in Australia almost 20% of the adult population has an Airbnb account. What’s more, those of you in Sydney are living in one of Airbnb’s top 5 markets globally, so it certainly bears thinking about.
When it comes to recouping your investment, the area you’re in and the type of listing you’re offering will make an impact on your ability to rent or list your property on Airbnb, so be sure to do the maths before you commit.