“Australian investors are increasingly shifting their attention to investing in short-term rentals.
These investments can be very lucrative, but the overall return that you enjoy on your investment will be affected by numerous factors.
If you are interested in investing in short-term rentals or if you are looking for a way to bolster income from a new investment property, put these helpful tips to use.
There are many fabulous vacation destinations throughout Australia that may draw travellers to different areas. Sydney is among the most popular vacation destinations, but Alice Springs, Cairns, Melbourne, and others rank high on the list of hot vacation areas as well.
When you choose a popular vacation area, you will enjoy the benefit of having more people view your online listing for a short-term rental and potentially choose to stay at your property.
Remember that there is more involved in selecting an ideal property location than focusing on a specific city. For example, you may be able to charge a higher rate if your rental property is located close to popular attractions in the city.
Short-term rentals in Australia are usually marketed through several popular booking sites.
These booking sites allow you to create a customized listing with images and text. While it is important to have attractive images that showcase all of the highlights of the property, views, and location, you also need to create text that sells the property to the reader.
Read through property profiles on various booking sites, note the phrases that stand out to you, and think about the voice of the text as well. Try to understand the criteria that make some properties more appealing than others. You can even write down some phrases that you may want to incorporate in your own profile.
Spend ample time writing this profile, and ask family or friends to make suggestions before you post it.
Before you lease your property to your first tenant, you need to take a few steps to protect yourself.
First, you need to contact your insurance company to determine changes that may need to be made to your insurance policy.
Second, you need to research local laws regarding short-term rentals. These vary significantly based on your location in some cases. So, if you own a short-term rental in one area in Australia, do not assume that the regulations will be the same for investment properties that you buy in other markets throughout the country.
Some regulations may make it more desirable to invest in a property in a specific area. For example, recently in NSW and only weeks before the discussion paper on new holiday letting legislation was released, Fair Trading has modified its Strata Living handbook to warn strata committees and owners corporations that they can’t pass by-laws restricting holiday lets.
Before you invest in a short-term rental property, you need to crunch the numbers to determine if the property could be profitable for you.
In order to accurately estimate the income that you may receive from the property, you need to know the occupancy rate in the market. It is not feasible to expect your property to be leased 100 percent of the time or even 90 percent of the time in most cases. Occupancy rates may also vary by the area of town where your rental property is located. Seasonality and local events that might affect occupancy and rates include concerts, games, special events (Grand Prix, Melbourne Cup, Riverfire Festival, etc). Therefore, look for the most focused occupancy rates that you can find.
When researching occupancy rates, pay attention to seasonal fluctuations for touristy destinations, or main point of attractions such as close proximity to universities, hospitals or locations that have high activity of a fly-in/fly-out workforce.
For example, in many prime vacation areas throughout Australia, the summer months are a popular time for visitors to travel. During these times, occupancy rates may be so high that you can reasonably charge a higher rate for your rental properties.
During non-peak seasons, however, you may need to lower your rates to maintain a reasonable occupancy rate. The combination of the occupancy rates and rental rates per season must be taken into account when you estimate income potential for your short-term investment property.
When you estimate the income potential for your investment property, you may see dollar signs. However, all rental properties also have expenses that must be taken into account.
For example, you may need to pay for regular repairs and maintenance work, utilities, cleaning services after tenants vacate, replacements for items that are broken or damaged inside the unit, taxes, insurance, a mortgage payment and more.
Expenses can add up significantly, and it is critical that you include all applicable expenses in your estimate. You can then subtract your total expenses from your income estimate to determine what your net profit may be.
Short-term rental properties require a substantial amount of time and attention. Potential tenants may contact you for more information about the property and you will need to track and process these leases to avoid double-booking.
In addition, you will need to handle collecting funds, giving keys to the temporary tenants, be the main point of contact during their stay to answer/attend to any queries and issues, cleaning the property after they leave, managing your finances and more.
Many investors prefer to outsource these tasks to a short-term property manager. If you choose to do this, look for a skilled manager who has experience with short-term rentals in the specific market that you are investing in. Remember to factor the property manager’s fees into your expenses.
Also, be aware that no two short-term property managers are the same. The key to maintaining a steady ROI with your investment property is to work with an agency that has experience managing several booking platforms at once and minimising your vacancy rate.
Investing in a short-term rental property in Australia may be a profitable idea. But selecting the right property in a hot market is important. You may also see that some properties are more profitable for you to invest in than others.
Spend time analysing several options before making a decision about which property to invest in. It may be helpful to consult with a qualified short term rental property agency with a solid track record about investment properties so that you can make a more informed decision about which property to invest in.”
“Who doesn’t want to run a tech-savvy rental for guests to love?
After all, there are plenty of products out there to outfit your home with – and we’re sure you’d love to make it to Superhost status!
Below are the top 9 items you can take advantage of to add some affordable high-quality tech to improve your short-term rental for guests.
This seems like a pretty simple one, every rental should have WiFi for your guests. Plus, you most likely already have WiFi installed, so why not allow your guests to have access to it.
You can easily set up a temporary password and charge your guests a little extra for WiFi included in their stay.
Wouldn’t it be cool if you could unlock your door without a key? Well, with an August Smart Lock you can.
After installing this smart lock in your home, you can create virtual keys for your guests, while being able to remotely access your home at any time.
Additionally, you can monitor who enters and exits your home per the key codes you assign each guest. The August Smart Lock system also helps provide a safer experience for your guests by preventing both lockouts and break-ins.
What’s a better way to experience music in your home than with a wireless sound system?
Not only will it make music sound great, but your guests will love it! Not to mention, since there are no wires, your guests can place it anywhere in your home.
Wireless sound systems are also incredibly easy to setup, as long as you have a digital music streaming service and smartphone, tablet, or computer.
Your guests might not be from your region of the world and might not have the right adapter to charge their electronic devices. Give them a hand and prepare universal adapters around your home to prevent them from getting frustrated when their smartphone loses battery.
Water purifiers are a must have for any home, so why not in your rental? It will not only make your water safer to drink, but also make your guests grateful for your hospitality.
Plus they’re relatively affordable to purchase, easy to install, and filters are cost-efficient enough to regularly reorder, depending on how long you’re renting out your property.
Just because you have a TV doesn’t mean that you should assume your guests enjoy staring at a blank screen – or the limited supply of regular TV stations! Instead, buy your home an Apple TV and let them take advantage of Hulu, Netflix, and more streaming services if they’re planning on spending the night in the comfort of your home.
If you don’t want to purchase an Apple TV, you can just as easily purchase a gaming console for your guests to take advantage of your personal DVD collection or download TV streaming apps, depending on which console you buy. However, keep in mind that gaming consoles can be costly, at nearly $400 for a single console.
Installing a WiFi-connected smart thermostat can help prevent your heating bills from getting out of control and offer a cool, modern way for your guests to adjust the temperature of the rental. Although it may cost you a few hundred dollars, it’s a worthy investment, which you can remotely control from your smartphone, tablet, or laptop.
You don’t want your guests getting cold in your rental, so it’s worth buying a few space heaters to put in your home – especially if you live in a winter hotspot.
Generally speaking, a space heater can warm an area of your home with a few select features, such as automatic shut-off, oscillation, and more. However, this usually depends on which model you buy.
Nevertheless, your guests will appreciate a warm, toasty experience while it’s chilly outside!
What tech items do you include in your rental that we’ve forgotten?“
“When looking for the best locations for high-income rental properties, there are many factors that you need to consider.
For example, if you were simply looking at high rental rates, Sydney would have to make the cut. However, there are many other important factors that influence the volume of rental property returns including the rate of income as compared to the original investment, the availability of short-term rental services in the chosen destination, the stability of the government and economy, and the long-term value of your rental property.
Investing in a city that boasts a high volume of short-term rental properties can provide higher rental returns. Short-term rentals have been shown to increase the return on an investment property between 25-75%. Plus, in most cities worldwide, the popularity of sites like Airbnb automatically increases the amount of return for property owners.
In this post, we’ve listed the five best places in the world to invest in property for short-term rental purposes. All of them have great fundamentals when it comes to the government and economy, and all of them enjoy a good tourist season.
So even if buying foreign real estate is just a pipe dream from where you currently stand, sit back and enjoy as we reveal where you can buy the best offshore assets.
In terms of long-term rentals, Colombia boasts high rental yields between 6.5%-9.6% as compared to only 4.39% in Sydney, Australia. Colombia is a highly underrated yet increasingly popular country for travellers. While it was once seen as the home of drug cartels and violent crime, it’s now considered the second safest economy in South America in which to invest.
The lively city of Medellin is wealthy, somewhat safe and fashionable. In fact, it’s one of the top tourist destinations for visitors from USA and Canada. It has a dedicated permit program to allow for short-term rentals from sites such as Airbnb, and it also happens to be strikingly beautiful.
For the savvy investor, buying in Medellin is a smart choice because the weather is summery for most of the year. There are lush forests and bird reserves just outside of the city, and an impressive public transport system to help visitors get there. Its rich cultural scene and phenomenal fine dining scene are the icing on the cake.
The excellent weather is an indisputable drawcard when it comes to Medellin’s potential for a short-term rental as tourists tend to visit all year round.
If you are looking for some of the highest rental yields you can earn, the capital city Amman in Jordan should feature in your investment shortlist. With a long-term rental yield of 10.65% that has the potential to skyrocket to 15%-20% through Airbnb or other short-term rental services, Amman is hard to ignore.
Aside from very good infrastructure, Amman has idyllic weather with an average temperature of 25°C in July and 8°C in January. It has laws that are favorable to landlords, and transaction and maintenance costs that are very reasonably priced.
While it’s a thoroughly modern city in terms of lifestyle and culture, it has numerous ancient ruins and a richly storied history. Once treated as a mere pit stop on the way to Petra, Amman is now considered one of the easiest cities in which to enjoy the Middle East experience. Safe and spectacular – what more could you want?
Due to the depreciation of the Malaysian Ringgit, Kuala Lumpur is undervalued when compared to other Asian cities. Long-term rental yields sit around 5.75%. For short-term rentals, rental yields are at 7%-10%. Because the ringgit is experiencing a 20-year low, currency appreciation could boost rental returns as well.
Kuala Lumpur is Malaysia’s largest city as well as its capital. It has historic monuments, soaring skyscrapers, mega-sized malls and lively street markets as well as an exciting contemporary art and design scene. The weather is hot and humid year-round, which makes it perfect for travellers looking for an exotic summer vacation.
It’s undoubtedly the most popular tourist spot in Malaysia, and it’s quickly becoming a hotspot for property investors from all over the world. If you’re looking for a stable real estate market, this is the place: real estate prices have not gone down in 15 years, Airbnb is allowed by law, and the rental system is kind to landlords.
Wellington, the capital of New Zealand, has excellent long-term rental yields of 6.88% to 8.43% that could rise to 10%-15% if you rent out your property on a short-term basis.
New Zealand has a strong legal system and a government that closely resembles Australia’s, Airbnb is completely legal. It has also been recognised as the least corrupt nation in the world, according to Transparency International’s Global Corruption Index. Plus, it’s beautiful.
The city of Wellington is known for its harbour setting and laidback vibe. With waterfront promenades and world-famous cuisine, it’s jam-packed with museums, theatres, galleries, boutiques and bars. In September, the World of WearableArt takes over the city – this renowned international design competition sees thousands flock to the ‘Land of the Long White Cloud’ and short-term rental returns can therefore be very generous.
In general, New Zealand offers a stable economic environment for investment. It was even ranked 1st for Investor Protection in the ‘Doing Business’ report by the World Bank in 2016.
Brussels has, for Europe, a relatively high long-term rental yield of 4.87% that may be raised to 7%-9% for short-term rentals. Airbnb is legal in Brussels, its economy is very stable, and its government makes foreign purchase and ownership of real estate very easy.
Brussels is the administrative capital of the EU as well as the country’s own capital. It’s a small city composed of 19 municipalities – tourists tend to be particularly drawn to trendy St.Gilles or upscale Ixelles. The weather is unpredictable, but fortunately a lot of the cultural attractions are housed indoors, so this doesn’t pose a deterrent to travellers.
Brussels is known for its vast green spaces and the shopping scene is also exceptionally good. Beer (and beer festivals) are obviously a drawcard, and travellers can generally get by speaking English without the need for a phrasebook.
Renting out your investment as a short-term solution for tourists can help you obtain a better yield than renting long-term, and the cities above are all designed to make it easy to rent short-term. There are so many good investment opportunities across the globe but these five cities are, without a doubt, some of the most likely to provide big bang for your buck. Combine this with a listing that syncs to the top 50 booking platforms, like MaisonNets, and you will maximize your profits.
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