Hi everybody
Just thought I start a thread for any other investors like myself that have IPs and rent them out on short term basis. I have been doing so for over a year via a Melbourne CBD apartment and below are some learnings I have to share to get the discussion started:
Positives:
- returns on short term are 2.5 to 3 times what I would get from a normal rental
- by not having a long term lease I have possesion of the property and can use it anytime it is not booked. Or if I need it (family coming over etc) I can cancel any bookings with fair notice and use it as I wish
- maximum depreciation due to apt being furnished and can add anything from tea and coffee to toilet paper to my tax expenses
- serious positive cash flow
Negatives:
- not exactly 'passive' as I meet and greet each guest in person and do a monthly mega wash of about 6 sets of sheets and towels. Cleaners come in and go on request
- banks don't recognise the money in as income until it becomes a part of your tax return the following year. Which is ok as you just need to be patient.
In short on the upside you get supercharged returns and on the down side you still have to 'work' for 1-2 hours a week.
Anyone else have any experiences with short term rentals out there? Would love to hear some more stories / thoughts and tips.
Many thanks
Just thought I start a thread for any other investors like myself that have IPs and rent them out on short term basis. I have been doing so for over a year via a Melbourne CBD apartment and below are some learnings I have to share to get the discussion started:
Positives:
- returns on short term are 2.5 to 3 times what I would get from a normal rental
- by not having a long term lease I have possesion of the property and can use it anytime it is not booked. Or if I need it (family coming over etc) I can cancel any bookings with fair notice and use it as I wish
- maximum depreciation due to apt being furnished and can add anything from tea and coffee to toilet paper to my tax expenses
- serious positive cash flow
Negatives:
- not exactly 'passive' as I meet and greet each guest in person and do a monthly mega wash of about 6 sets of sheets and towels. Cleaners come in and go on request
- banks don't recognise the money in as income until it becomes a part of your tax return the following year. Which is ok as you just need to be patient.
In short on the upside you get supercharged returns and on the down side you still have to 'work' for 1-2 hours a week.
Anyone else have any experiences with short term rentals out there? Would love to hear some more stories / thoughts and tips.
Many thanks