By Rosa-Clare Willis, Hometime.io
The Airbnb market in Sydney is growing rapidly. The accommodation platform has announced that there are more Airbnb listings and users in Sydney then there are in San Francisco.
In fact, Sydney has been ranked fifth in the world for Airbnb users, a huge jump from being ranked 9th just 12 months ago. With 8.5 million visitors to Australia per year, it’s no surprise that more and more Aussie homeowners are listing their properties and joining the 14,605 other Sydney properties on the platform.
in recent years, Sydney property owners are leaning eagerly towards short-term rentals and bypassing the traditional long-term market in pursuit of higher yields to mitigate the rising Sydney property prices.
There are multiple platforms that facilitate short-term letting, however, Airbnb is by far the most economical option. When it comes to the cost of a listing, Airbnb charges a flat 3% commission on every completed booking. The platforms search algorithm is also the most accessible and easy to ‘game’ for first-timers.
If you’re weighing up whether or not to list your property on Airbnb, here are 4 reasons to consider:
1. Higher Yields by 30 – 55%:
Currently, the average nightly price of a 1-2 bedroom Sydney property is $206 per night with approximately 70% occupancy year round. Compare that the median long-term rental price of $650 per week in Sydney, and you’re looking at a 55% increase in rental yield. Even in the unlikely case of 60% yearly occupancy, a homeowners monthly yield will average at $3,759.50, a 30% increase from the long-term rental yield.
2. Full control & flexibility
One of the many great aspects of the sharing economy is the individual autonomy it allows. With Airbnb, you hold complete control over the availability of your home, the guests who stay there, the price you charge and much more. Life is ever changing, and you never know what your situation may be in 6 or 12 months, so having short-term tenants enables homeowners to be more fluid with their finances and plans.
3. Protection & Support
Airbnb has a $1,000,000 Host Guarantee to protect homes from accidental damage. This protection comes at no extra cost along with their Host Protection Insurance scheme. This scheme protects homeowners from liability in case guests hurt themselves, or your property gets damaged during their stay.
4. Pay off your Mortgage in less than 10 years
New studies have shown that property investment buyers are better off renting their homes on the short-term market rather than to traditional long-term tenants. This data claims that a three bedroom home in Sydney with occupancy rates of 80% could be paid off in under 7 years as opposed to 26 years with traditional long-term tenants.
While the Airbnb short-term rental market is lucrative and opportune for properties in the right area, it’s important to consider the amount of time and effort that short-term accommodation requires. On Airbnb, homeowners are dealing with guests rather than tenants. Therefore, their needs differ dramatically with guests needing a higher touch hospitality-type service as opposed to the traditional ‘set and forget’ of long-term tenants. Many homeowners who choose to list their properties on Airbnb have it managed by short-term rental property managers such as Hometime.
Hometime is An Airbnb Property Management company headquartered in Sydney. Hometime provides the complete suite of services for Airbnb properties, allowing Homeowners to increase their income without lifting a finger. Their expertise ensures that properties are booked for more nights at the best price and that each guest has a wonderful stay.
*Please note: If you’re considering an Airbnb strategy, please call us at CANE Financial on (02) 9386 4308 as there are a few things you need to know when applying for a home loan. This strategy may not be suitable for everyone’s circumstance.