The short-term rental market is an interesting and prosperous option and the spoils are not just available to those who own investment properties. In this article Advocate Property Services director, JO VADILLO discusses the short-term rental market and why the risk to guests needs to be considered and adequately covered.
There is a rise of homeowners who are now subletting their family homes when they are on extended vacation. These are homes that are not necessarily in a beachside location or major tourist markets, but instead allow for other travelling families to have the opportunity to all stay affordably under one roof and sometimes even bring the dog too.
So how do you mitigate the risk to your family home or investment property when offering it as a short-term rental?
Covering the risk
Step one on the journey to managing short-term rentals is to ensure you are allowed to use your property for these purposes. Many strata blocks have by-laws restricting the use of the properties for short-term letting purposes.
Insurance is the next hurdle, are you covered during the tenancy period?
If you are running a permanent Airbnb set up you need to ensure you are adequately covered for damage or theft.
Managing your property
Managing who lets your property can actually be easier than you think when using platforms like Airbnb.
You are able to set up the back end of your listing so the minimum stay requirements are at your discretion, you dictate the cost of the daily letting fee and your tenant pays for the cleaning.
You can also ensure you are not automatically approving applicants but rather they apply to stay. This allows you the chance to read about them and to also read their reviews.
You can mitigate risk by looking at the profile of your guests set up on Airbnb. People with small children will be less likely to play loud music at midnight than a group of guys in town for the State of Origin game.
If you are going to embark on the Airbnb journey as a full time offering you need to get some systems in place to ensure your tenants arrival is comfortable and obtaining a key is convenient.
You can have a script explaining the key retrieval process that is sent to all bookings. Images are really helpful, especially when guests are arriving late at night and expected to look under a rock in the garden in the dark.
It is always helpful to have a booklet inside the home explaining how to work the basics of the house such as the Wi-Fi, dishwasher, oven and washing machine.
Local café and shop recommendations also come in handy for out of area guests. Include brochures of nearby attractions and the closest public transport timetables too.
Outsourcing the cleaning and linen exchange is vital to the properties swift turn around time.
You need reliable local professionals who can manage this for you and ensure your timing allows for exiting guests and the arrival of new ones.
The little extra’s that make the stay at an Airbnb more memorable can be offering a well-stocked coffee machine, providing some milk, bread and basics. A greeting note and hello from the owners is a nice touch.
Do your research
The returns can be lucrative and if you don’t think you have anything to offer jump onto Airbnb today and see what else is being let out in your local area for short-term stays.
Give your property a name for the listing, take quality photos and don’t forget to treat it like a business.
Ask for testimonials and feedback; ask how could you improve the stay.
The difference could be to double your weekly returns for just a little extra management.
About Jo Vadillo:
Jo Vadillo is the owner and Director of Advocate Property Services Pty Ltd. She works with investors and homeowners to source new and existing properties that meet the best investment credentials to build a prosperous property portfolio for their clients. Jo is also a Board member of My Property Circles and runs Property Women, an organisation aimed to educate women on their journey to property success.
Jo is an author, mentor, public speaker, fierce negotiator and a terrible cook. When not immersed in her own property dealings and that of clients, Jo and her husband Greg are big travellers and go everywhere as an entourage with their 3 young sons.
General Advice Warning: The advice has been prepared without taking into account your objectives, financial situation or needs. You should therefore consider the appropriateness of the advice, in light of these objectives, financial situation or needs, before following the advice. We recommend that you speak to your accountant and financial adviser to help you determine whether direct property investment is right for you.