AIRBnB HANDY HINTS

Q Magazine - - Q Wealth -

5 things to con­sider be­fore you AirBnB your home Is AirBnB just a fad – a short term craze – or is the global gi­ant here to stay? AirBnB has dis­rupted the ho­tel and short­stay ac­com­mo­da­tion mar­kets and con­sumers are vot­ing with their wal­lets – its pop­u­lar­ity is cer­tainly not slow­ing down any time soon. AirBnB can present amaz­ing op­por­tu­ni­ties for home own­ers to pocket some extra money but “just be­cause you can, doesn't mean you should!”.

Here's 5 things to con­sider be­fore you take the leap:

What's your ap­petite for risk?

One of the first con­sid­er­a­tions for any home owner con­sid­er­ing list­ing their prop­erty on AirBnB to in­crease rental re­turns is their ap­petite for risk. One of the risks in­volved in this strat­egy in­volves fluc­tu­a­tions in your cash­flow – one month you may have a very high oc­cu­pancy rate and the next month you may not have many book­ings at all. Bal­anc­ing your books and man­ag­ing your cash­flows is crit­i­cal, so you will need to en­sure you don't drain your ac­count every month and have enough of a fi­nan­cial buf­fer to get you through pe­ri­ods where book­ings are low.

Will your prop­erty be in de­mand?

If you are com­fort­able with cash­flow risk, you next need to con­sider your ac­tual prop­erty and de­ter­mine if there is even any mar­ket de­mand for that prop­erty. Ar­eas that are within walk­ing dis­tance to a CBD, close to a busi­ness park, café or res­tau­rant strip, with pub­lic trans­port or other sport­ing or entertainment fa­cil­i­ties nearby are likely to be in high de­mand through­out the year. But other ar­eas may only be in de­mand sea­son­ally. For ex­am­ple, beach­side towns may be ex­tremely pop­u­lar dur­ing the warmer months but it may be dif­fi­cult to at­tract book­ings dur­ing win­ter. A quick search on AirBnB will show you other prop­er­ties in your area, which will help you to de­ter­mine what the com­pe­ti­tion is like. In re­al­ity, some prop­erty types and sub­urbs are sim­ply not in high de­mand, and while you may be­lieve you have the best prop­erty in the area that doesn't mean it will be a great AirBnB prop­erty.

Pre­sent­ing your prop­erty for po­ten­tial guests:

As­sum­ing you are com­fort­able with the cash­flow risk and your prop­erty is in an area that will have suf­fi­cient de­mand, then of course you need to de­ter­mine how to present your prop­erty to the mar­ket in its best light. Your green shag pile rug and fam­ily photos on the wall may make you feel warm and fuzzy, but now you need to put on the hat of your guests and re­view how your prop­erty is pre­sented. If your prop­erty is al­ready fur­nished, you may need to de-clut­ter and make the place feel com­fort­able but not too per­son­alised. If you have an empty prop­erty, then this gives you an op­por­tu­nity to style it with fur­ni­ture and fit out the prop­erty to suit the mar­ket you are tar­get­ing. Are you tar­get­ing fam­i­lies or young pro­fes­sion­als? Dec­o­rate to suit your tar­get mar­ket but also be mind­ful that you want your prop­erty to ap­peal to as many peo­ple as pos­si­ble, so a more con­ser­va­tive ap­proach will ap­peal to a wider mar­ket and in­crease your chance of at­tract­ing more guests.

Of course, then there is the list­ing process – you will need to get pro­fes­sional photos taken, make sure you have solid in­sur­ance cover and then list the prop­erty. Start by ask­ing for a lower price to test the mar­ket, then see how you go with book­ings and ad­just your price ac­cord­ingly. Don't start too high – even if you feel your prop­erty is worth it. AirBnB guests rely heav­ily on re­views, so you need to at­tract peo­ple to book and re­view and build from there. If you are the ‘new list­ing on the block', you may only be able to com­pete on price in the first in­stance – even if you have a stel­lar lo­ca­tion and fancy fur­ni­ture!

Be pre­pared for the ad­min:

There is a lot of work in­volved man­ag­ing check in and check out as well as fol­low­ing up guest feed­back, co­or­di­nat­ing clean­ers and other main­te­nance items. Do­ing all of this your­self may be quite time con­sum­ing, but you are pro­vid­ing an ac­com­mo­da­tion ser­vice and re­mem­ber that peo­ple are used to re­ceiv­ing ex­cel­lent ser­vice from ho­tels, so they will ex­pect high lev­els of ser­vice from their AirBnB host too!

Seek out the pro­fes­sion­als:

Com­pa­nies such as Quick­stay spe­cialise in AirBnB man­age­ment and are ex­perts in de­ter­min­ing all as­pects of list­ing your prop­erty on AirBnB, from analysing cash­flows, oc­cu­pancy rates, pric­ing strat­egy, clean­ing ser­vices and of course guest ser­vices. If you are se­ri­ous about us­ing AirBnB to in­crease yields on your in­vest­ment prop­erty, you can mit­i­gate the risks in­volved by us­ing a com­pany such as Quick­stay to man­age all of this for you.

AirBnB can be an amaz­ing strat­egy to in­crease yields, but for most home own­ers you will need to weigh up the time in­volved in do­ing all of this your­self ver­sus en­gag­ing an ex­ter­nal pro­fes­sional com­pany to man­age the en­tire process for you.

Luke Har­ris and Matthew Bate­man are co-founders of The Prop­erty Men­tors, a Mel­bourne-based busi­ness com­pris­ing an elite team of prop­erty pro­fes­sion­als who ed­u­cate, mo­ti­vate and fa­cil­i­tate clients from all around Aus­tralia. Their new book, Let's Get Real (Ma­jor Street Pub­lish­ing $29.95) is now avail­able.

For more in­for­ma­tion visit www.lets­ge­tre­al­book.com.au/give­away

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