Keen to make some extra bucks by turning your investment property into a short term rental? Here’s what you need to know:
If you’ve thought about renting out your investment property for some extra money, you’re not alone. Since 2008, Airbnb has clocked in a whopping 150 million users across 190 different countries. And, it can also be a solid source of extra profit.
The latest income and occupancy rates through Airbnb in Australia
- Sydney (NSW) has 29,367 active rentals achieving an average daily rate of $230, and an average monthly revenue of $2,965 with an occupancy rate of 65%.
- Brisbane (QLD) has 6,912 active rentals achieving an average daily rate of $150, and an average monthly revenue of $2,083 with an occupancy rate of 67%.
- Melbourne (VIC) has 22,361 active rentals achieving an average daily rate of $193, and an average monthly revenue of $2,939 with an occupancy rate of 67%.
- Adelaide (SA) has 3,550 active rentals achieving an average daily rate of $188, and an average monthly revenue of $2,886 with an occupancy rate of 67%.
- Hobart (TAS) has 1,211 active rentals achieving an average daily rate of $208, and an average monthly revenue of $3,740 with an occupancy rate of 77%.
- Perth (WA) has 5,490 active rentals achieving an average daily rate of $140 and an average monthly revenue of $2,256 with an occupancy rate of 75%.
- Darwin (NT) has 415 active rentals achieving an average daily rate of $151 and an average monthly revenue of $1,596 with an occupancy rate of 60%.
- Canberra (ACT) has 1,108 active rentals achieving an average daily rate of $157 and an average monthly revenue of $2,614 with an occupancy rate of 72%.
How to turn yourinvestment property into an Airbnb rental
Before investing time or money into transforming your property, it pays to ensure you tick all the legal boxes. Phill Whyte from City Plan Planning says each State has their own specific requirements and legislation which must be approved first. Failing to measure up can result in considerable fines, not to mention the associated stress.
“It’s best to be proactive and get the relevant approvals in place from the start rather than let Council become aware of an unlawful activity that is already generating complaints and might compromise a potential application,” he says.
If you live in a building with a body corporate, it’s best to contact them seeking permission to rent out your space. Whyte says the majority of complaints come from neighbours or the manager of the complex in which the Airbnb is being undertaken .
The income you make through Airbnb is often subject to taxation, so check in with the Australian Taxation Office to ensure you keep the correct records and pay the right amount of tax. You may also be eligible for some tax deductions related to running your rental – including the money you spend getting your property set up and marketed.
And while Airbnb does provide insurance to renters using their platform, it’s important to read the fine print and ensure it covers you adequately. If not, talk to your home and contents insurer about potential policy adjustments to cover your rental comprehensively.
Do your research
Before creating your makeover plan, log in and look at what is currently on offer in your area. This will give you an idea of what guests are looking for and what people are paying for similar properties. It also allows you to figure out what will make your property stand out from the rest – meaning you may be able to attract a premium price or higher occupancy rate.
Your location and size of your home will alter what people are looking for; if you’re near the beach, carpets and rugs will create additional work for guests, while an outdoor shower will help them keep the place clean with little effort. A small apartment is more likely to be booked by couples, meaning a luxurious and romantic fit out will be more appealing, while larger houses in family friendly locales will be looking for enough bathrooms, barbeque areas, separate living rooms, entertainment spaces and plenty of kitchen tools.
Neither last nor least, sign your property up with Airbnb, reading your contract carefully and asking questions about anything you don’t understand. It’s free to list, and they only charge an Airbnb service fee of around three percent once you have a booking. You’ll need pictures that show off your property (though avoid misleading snaps, they’ll only lead to disappointment and bad reviews) and a comprehensive lists of amenities and offerings – the more detail, the better!
Words by Melanie Hearse
Thinking of purchasing an investment property and turning it into a holiday rental? Speak to eChoice and get the pre-approval you need to start the property hunt.