Airbnb : Side Hustle or Side Hassle?
So you want jump on board the short-term rental money-making train? Read on for the where, what, how and why of cashing in on Airbnb…
MAX OUT YOUR AIRBNB ROI
You’ve heard enough good things about Airbnb properties. You want in.
But just remember, you’re not buying a house or an apartment, you’re buying a business.
So, when you’re inspecting, you’ll need to leave your emotions at the front door of that Sydney terrace, Brisbane apartment or Melbourne warehouse space. And that’s just the start.
If you don’t want your side hustle to become a side hassle, you’ll need to plan, plan, plan and first of all, make sure you buy in the right location. If you’re not sure of exactly what you’re doing then engage a buyers agent to help you get it spot on, first time.
So, you’re ready to buy? You’ll first need to consider if you want to run the Airbnb property yourself or set up a key pad entry and have cleaners and Airbnb managers look after your property. More on this later, first let’s look at what’s out there so you can run the numbers.
The old real estate adage Location! Location! Location! could not be more true for Airbnb. Visitors do not want to get lost on public transport or travel distances to get to their meeting or tourist destination. You can’t really go wrong with inner city locations in any of the capital cities. But here’s a breakdown of the big winners.
Sydney is Australia’s most popular city for short term rentals. In 2017, it welcomed 41,000 Airbnb reservations. The expectation is that the uptrend will continue through to the end of 2019. Currently, Surry Hills and Pyrmont are high performers with North Sydney and Randwick earmarked as growth areas.
Avg. monthly revenue $2755
Melbourne has the highest percentage of short term rentals in Australia. The top performing Airbnb apartments are 1 and 2-bedroom apartments with stacks of character, professionally styled properties in the inner city and high end CBD with amenities. Style matters in Melbourne it seems.
Avg. monthly revenue $2640
It may not be as big as Sydney or Melbourne, but Brisbane does have a distinct advantage – all year-round warm climate, so your bookings will be less affected by seasonality. It’s great for business travellers and is the half way point between the Sunshine Coast and Gold Coast. Choose a property with city or water views, close to restaurants.
Avg. monthly revenue $2033
It may not have as many hosts as other cities, but it does have the highest occupancy. And hey you might just have a polly staying at your place. Not a bad claim to fame!
Avg. monthly revenue $2721
Saving the best for last, Hobart. You can charge more here and there are also less hosts. Limited competition, high occupancy and more affordable property by comparison. In Hobart, you really could be onto a winner.
Avg. monthly revenue $2997
THE FIT OUT
So you’ve purchased your Airbnb business. Now it’s time to create your own personal Airbnb brand. And that starts with styling it. Each different location will demand a different style – as you read with the Melbourne market. But you can choose to style it however you see fit. Minimalistic styling isn’t a bad option for any market – it’s non-offensive and of course less is more – more money in your pocket!
Whether you are going for the minimalist look, homely or anything else, here are a few things to consider buying for any property – as well as all the standard bits and pieces.
A mattress protector – the bed must be kept in good condition
Extra blankets and pillows
Lamps – to give the room a good feel
Spare chargers for iPhone and Android phones
Bath mat that is easily washable
Liquid hand wash
Shampoo, conditioner and body wash – in neutral scents
Washer and dryer as standard
Washing detergent and fabric softener
Also include some cleaning products/items too – you’d be surprised, guests will clean up after themselves if you supply the necessary tools
Choose metal, plastic or wooden utensils for durability
Kitchen cleaning products
Don’t forget the dishwasher tablets!
KEEP IT SAFE
Document everything! Every square inch of your place. You need to photograph it and create a spreadsheet of everything in the house or apartment. Airbnb does provide some cover, but it would be worth talking to your insurance agent too.
AUTOMATE YOUR PROPERTY
There are a range of different key pad entry systems to choose from these days, so you don’t need to be there when they guests arrive.
You can also automate the old-fashioned way too, if you’d like to be more hands-off on your Airbnb business. There are plenty of people in the gig economy looking for work – you can use Airtasker for cleaning and there are a range of other services that cover Airbnb management. All of which come at a cost though.
CREATE LOCAL PARTNERSHIPS
As well as making money from your Airbnb, you can also make a little extra passive income by creating partnerships with businesses and attractions. If you send customers their way, you may receive a kickback. All money is good money!
The list of advice for Airbnb rentals goes on. But the most important thing to remember, you are the CEO of your own little enterprise, so keep that business thinking front of mind and before long, your side hustle could become a lucrative full-time gig.