With the exponential growth of sharing-economy companies such as Uber and Airbnb it’s hard not to be intrigued and leave you wanting to know more.
With over 2 million listings worldwide Airbnb has grown into a short-term property rental juggernaut and with around 70,000 listings in Australia alone it is easy to see why people are looking at this as an alternative to renting their properties on a permanent or long-term basis. But is this right for me?
Airbnb has some fantastic advantages. The draw of our Noosa brand means there is the potential for significantly higher returns, owners have the ability to choose when to use the property personally, there is the ability to generate income when the property is vacant during work or holiday travel, and there is the opportunity to meet some amazing people from all around the world.
There are of course some disadvantages of offering your property for short-term rentals such as taking a booking from someone you have never met, having to lock away personal or expensive items, extended vacancy periods due to being in an undesirable location and having the hassle of organizing key exchanges particularly if you aren’t in the area.
There are now Airbnb property management businesses popping up around Australia to assist owners in managing their Airbnb bookings. These managers do everything from listing services to key handover, guest check-in, guest check-out and arranging of cleaning contractors. They can even provide guest reviews and gift baskets. The fee for this service generally ranges from 12% right up to 30% of the gross rental income depending on the services you require.
Permanent or long-term rentals require a lease agreement which are normally either 6 or 12 months. The significant advantages of offering your property as a permanent rental is that you have the stability of a weekly rental income without the seasonal factors coming into play and there is often little or no effort required from the owner. The tenant vetting process is more thorough and your property manager generally meets the prospective tenant which adds to your piece of mind. There is of course the disadvantage that you lose the flexibility to access the property for your own needs during the period of the lease and your returns may not be as high.
When you take into consideration your properties availability and in what season, location and competition it should make your choice easier.