AirBnB Success Stories

[C-mac]

Hi folks, keen to hear if anyone he had long-term success (I.e. 12 months+) by AirBnB-ing out their property on the regular?

Keen to hear of detail on how you manage it; key access (do you use the pin code key box/lock?), do you lay fresh linen etc.? Do you keep an itinery of pots and pans and stocked items to make sure short-term stayers don't take anything? How many days a week do you rent out a property? Do you clean yourself or hire a cleaning lady between tenant stay-days? Insurances?? What about seasonal lulls in tenants?

And most importantly; with all of the above costs in mind - does the extra work and running cost still make it worth it? Is the cash flow gain that exponentially greater to actually make it work your while instead of having just say a 6-month standard lease?

 

[depreciator]

I have two properties on Airbnb. They are very different.

Property #1 is a huge, open plan flat that takes up the top floor of a warehouse building attached to my house. It is a fabulous space and booked out up to 6 months in advance - there is even a booking in place for 2016. managing it is easy because it's right next door. I get the kids to help me clean before visits, but of late I have been targeting longer stays - there is a 2 month one happening now - so there is no cleaning needed. It has been on Airbnb for three years and definitely returns more than it would if rented out as a standard rental.

Property #2 is a one bed flat in a 70s building around the corner. I rent it out for a minimum stay of one month for two reasons: the first is so I don't have to get it cleaned too often, the second is so I don't upset the owner occupiers in the building (I am on the committee and I would hate to have to give myself a talking to.) I get over market rent for the flat and it is occupied probably about 95% of the year. It was also a useful place to store some spare furniture.

Doing high turnover stuff would only work if the place was next door - or at worst a very quick walk away. I'm lucky to not have any seasonal variation in bookings, but that's because of the area.

Scott

 

[pasey25]

Scott, what made you inclined to use airbnb as opposed to regular letting? is it just the return?

what do you think makes a place suitable for airbnb vs. regular letting?

 

[Aaron Sice]

Scott - more please!

 

[michellegfranci]

I think AirBnB's success lies in the suburb area of the property. If you have property in areas with high demand or close to lots of public events then you can do alright with it, but as has been stated, seasonal demand and the inconsistency of it can be challenging.

 

[depreciator]

Scott, what made you inclined to use airbnb as opposed to regular letting? is it just the return?

With the flat attached to my house, I didn't want a permanent tenant. It's good having the place there if we get visitors and my kids scour the calendar as school holidays approach and book it for sleepovers if it's free. Averaged over three years, it probably returns close to $30K per year - it's nice having a positively geared PPOR. If I let it out permanently, it would return a bit less than that. I also like the constant flow of interesting people coming through the place and we have had some great dinners with some fabulous people.

what do you think makes a place suitable for airbnb vs. regular letting?

Location would be the main thing. It needs to be a place that gets consistent demand all year round - without too many competing listings. There are lots of Airbnb hosts who get pretty disenchanted in the winter when bookings drop off because the demand/supply pendulum swings against them. Putting a strata apartment on the short term let market is also asking for trouble - especially in the eastern suburbs of Sydney

 

[vaughan]

I think AirBnB's success lies in the suburb area of the property. If you have property in areas with high demand or close to lots of public events then you can do alright with it, but as has been stated, seasonal demand and the inconsistency of it can be challenging.

Scott's places are in Marrickville. Not what I would consider an area of high demand like, say, the CBD or Bondi. Yet he's having great success.

 

[depreciator]

Bondi tends to get a bit of boom and bust demand - in the summer, every place would be rented out, but in the winter many would be empty.
I like longer bookings because fewer changeovers means less work. The people staying now are a recently retired couple from the UK on a huge trip. They are staying with us for 2 months and are good fun. It suits them to be on the edge of the city and pay a bit less than they would in the tourist areas.
We have also had people moving to Australia and looking for a base for the first couple of months to get their heads around Sydney and find jobs, somewhere to live etc. Those people have come from the UK, Germany, Ukraine, India and France. Marrickville is a great suburb to start out in - cheap food, trainline, close to the CBD. I have become very good at helping these sort of people find their feet in Sydney. When they enquire, I usually tell them they had best stay for 2 months - Europeans are surprised that it's so hard to find reasonably priced furnished flats in Sydney and we often end up in IKEA in Tempe toward the end of the stay (well, they do, I sit outside in the car and read the paper because I hate the place).

My favourite recent guests were a retired couple who stayed for over a month last year. They were from Washington DC where Joe had spent much of his working life as a lobbyist for Quaker groups. When he retired, they handed in the keys to their rental flat and gave away everything they owned - everything that didn't fit in their backpacks, that is. They were halfway through a 14 month trip and had stayed in more than 20 Airbnb places. They figured that if they lived simply, it didn't really cost them any more to live anywhere in the world compared with their costs in DC. They had a space reserved for them in a retirement home and figured they would keep travelling till they couldn't do it any longer. I asked Beth what they lived off when they were travelling and she said, in a mid west drawl, 'Well, a long time ago, way way back, I bought a bunch of shares in a funny little company called Apple. They've been good to us.'

 

[Deltaberry]

Hi folks, keen to hear if anyone he had long-term success (I.e. 12 months+) by AirBnB-ing out their property on the regular?

Keen to hear of detail on how you manage it; key access (do you use the pin code key box/lock?), do you lay fresh linen etc.? Do you keep an itinery of pots and pans and stocked items to make sure short-term stayers don't take anything? How many days a week do you rent out a property? Do you clean yourself or hire a cleaning lady between tenant stay-days? Insurances?? What about seasonal lulls in tenants?

And most importantly; with all of the above costs in mind - does the extra work and running cost still make it worth it? Is the cash flow gain that exponentially greater to actually make it work your while instead of having just say a 6-month standard lease?

The biggest issue I have with airbnb is:

- Your insurance policy is most likely void, then again insurance is probably void under many circumstances
- Time and effort
- Airbnb tends to only be filled in two circumstances (Friday, Saturday nights). Occassionally you get the 20 day short burst, which is the real winner. You can probably get 3-4 of these a year
- The risk is not so much with the 20-day people, but the folks who come and stay for 1-2 nights, trashing your place and causing a ruckus with your neighbours
- Lastly, not every city is susceptible to Airbnb. In Australia, probably only Sydney and Melbourne have enough events in the city to support continuous flow of tenants on 90% of your weekends. As an example, Melbourne this weekend has the White Night, and you can probably charge $600/night in a 2-bedroom, but people will fill it with 5 people
- Sydney always has a good steady influx, especially if you're close to shoreline and CBD (eg Bondi)

 

[C-mac]

Thank yoy Scott/Depreciator for the insights! Re Bondi I have a friend who says the opposite actually.. She's a UK girl herself and says that whilst 5-6 months of summer is ludicrously opportunistic and mega-return for her, in the lulls of winter she does something clever: she targets those backpackers who want to stay on and get their working holiday and other visas. See, this community are looking to establish themselves. Most agents won't give them a 6-month lease, so she cuts them a deal via AirBnB and says 'tell you what; summer is ending and you need to prove your worth to an agent to get a longer term proper lease in place - at a cheaper rate of course! - how bout you rent my place for a couple of winter months so you can stat applying for your own place in winter before the rush? I'll write you a glowing reference so spectacular at the end that any agency would be a fool not to have you!'. She finds a couple of these types every winter and the symbiotic deal works sell for both, all the while she is claiming mega-premium returns in summer and above-average returns in winter.

 

[depreciator]

Ah C-mac, you see your friend is being clever. I have told a few hosts in the east who bemoan the winter slow period that what they need to do is short term from, say, October till March and milk the summer, and then look for a six month tenant over winter. I suggest they list their flat on Gumtree to find the long stay tenants and steer them to Airbnb to do the booking. I have had more success on Gumtree than Airbnb looking for longer term tenants for my second listing.

 

[pasey25]

Scott, how are you managing insurance for your airbnb lets?

 

[depreciator]

Missed your reply, Deltaberry.
- I had mention made specifically on my file with the insurer that I was using the property for short term rentals, but I assume insurance companies always try and weasel out of everything.
- I minimise time and effort on my main place by having a 5 night minimum.
- I have a two month stay happening now, then there are a few shorter ones (1-2 weeks) and then some longer ones again after that. I have a great Canadian couple coming back again for 5 weeks mid year.

My monthly price is pretty reasonable (deliberately) which is why I get big chunky bookings. I keep my nightly price up ($130 and $140 for Fri/Sat) when I'm filling in the gaps between the long bookings. So for a 5 day stay that includes a weekend, that's $670. If it gets to a month out and there are still a couple of holes I want filled, I drop the nightly rate a bit - or let the kids have the space.

The main reason I'm full all the time, though, is that my space is pretty interesting - I get people from Sydney coming to stay sometimes because they have found it on Airbnb.

 

[antistar]

I have had a very positive experience with Airbnb for about 18months+ with a CBD apartment.

Overall return is very consistent and equals to 3/3.5 x times long term rental return for this type of property. In the hot months (Nov - March) up to 5 x.

Have a cleaning company who do a complete changeover between guests for me and managing the communication with guests is super easy via the app (takes me no more than 10-15min a day, and not every day either).

Occupancy has been solid - approx 320 nights booked out last calendar year with a month blocked out for when family was over.

I love the fact that I have access to this property whenever I choose to (with some reasonable planning) and have it available for friends / family to stay over. Additional to the return this is the best part.

Based on demand to my airbnb inbox alone, I could easily fill another 2-3 apartments at similar rates. At that point (anything over 1, maybe 2 listed apartments) you can get a part timer to manage / run it for you.

Airbnb, Uber, all the novelties of the sharing economies will eventually get regulated in AU but as usual the law is a few steps behind innovation. Until then many of us will make some hay, then some will adapt and most will drop off. I would encourage anyone thinking about it to give it a go in the current environment.

 

[antistar]

- Airbnb tends to only be filled in two circumstances (Friday, Saturday nights). Occassionally you get the 20 day short burst, which is the real winner. You can probably get 3-4 of these a year
- The risk is not so much with the 20-day people, but the folks who come and stay for 1-2 nights, trashing your place and causing a ruckus with your neighbours

Definitely avoid 1 night stands. My min stay criteria was 3 nights, now 5.
10-15 days is ideal, anything longer is easier but with a lesser return.

Also re folks trashing your place - Airbnb has a great pre-selection criteria. I mostly only let middle aged couples stay in mine (or mature couples in general). Never an issue and some of the older ladies give the place such a good clean before they leave that puts the cleaners to shame!

 

[nomadic]

Do you guys do a meter reading for the elect and charge guests for usage? I've stayed at a couple of places where they do a reading at check in and check out. Some give an allowance and others make you pay for the power used.

Is there anyone here doing Airbnb remotely with an interstate property and how do you organise key collection, check in/out and cleaning? I guess you have someone you trust on the ground or find someone on Airtasker to do it for you?

Good article here about a guy who bought an apartment just to rent out on Airbnb.

http://gizmodo.com/i-bought-an-apartment-just-to-rent-it-out-on-airbnb

In 2012 I bought an apartment specifically to rent out on airbnb. I've been managing it remotely for the past year. This post includes everything I learned as well as some revenue numbers. The place I found was in Las Vegas and it cost $40,000. It's a 750 sqft 1 bedroom, 1 bath. There's a shared pool with a hot tub and even a tennis court. Perfect for the weary traveler who wants to relax after a long journey.

 

[jodes92]

We bought our PPOR (2 bedroom apartment, no parking) and still had about 4 months left on our lease for which we couldn't end it without massive penalties... so we decided to AirBNB it out.

We scoured gumtree for some bargains and managed to furnish the place for about $2k all up (including linen, crockery, appliances etc) (those in brackets we purchased new!)

So far we have had the place listed for 2.5 months and have had 2 nights empty. For the first couple of months, we had the price "lower" to attract more bookings but still managed to collect enough to cover our mortgage and price of furniture (which we definitely couldn't do with a long term rental). It has been a bit of a pain though with all the cleaning as we have done it all ourselves and haven't stipulated a minimum stay (although we do charge a cleaning fee). We have just hired a cleaner but also just had our first complaint! (he didn't change one of the doona covers... grrr).

Now that we have built up some good reviews, we have upped the price significantly and are still getting lots of bookings- over the next 3 months, we only have a few nights free and we have even delayed moving in as we received a month look booking we just couldn't resist! We have also received a bunch of bookings we declined as we thought we were moving in (which we may not now).

We also received a 3 month booking request for Oct-Dec which we are contemplating whether to take.... We could achieve around $5,000 per month but probably closer to $2500 if we rented it out long term.

We do lose sleep though on the implications of strata and if they suddenly put their foot down and are trying to obtain more long term bookings !

We are located half way between Bondi and Sydney CBD so great location which I think helps.

One of the easiest ways to make the extra cash is we charge a set price for up to 4 people and then an extra $45 for the 5th person- the $50 futon we bought off gumtree for the 5th person to use has paid for itself many times over !

As for damage, we werent' particularly picky when approving guests (even letting those with no reviews or verification stay) and so far (knock on wood), we only had a small section of a blind snap off- which is not even noticeable. So far everyone has left the place spotless, even taking off sheets, cleaning dishes and taking out the rubbish.

All in all, now the price is higher, it seems to be worthwhile. If only we can keep on getting the longer bookings, and keep strata happy, we will continue indefinitely and continue to rent !

 

[Ausprop]

We have just hired a cleaner but also just had our first complaint! (he didn't change one of the doona covers... grrr).

professional property mangers in short let accomm only change the doona covers every 4 or 5 guests. There is just too much linen otherwise.

 

[jodes92]

professional property mangers in short let accomm only change the doona covers every 4 or 5 guests. There is just too much linen otherwise.

Interesting to know Ausprop- thanks! We generally only change it every second guest but we just had a one-month stay move out so it definitely should have been changed !

 

[cadence]

professional property mangers in short let accomm only change the doona covers every 4 or 5 guests.

Will think twice before staying in one if those places now