OH! Magazine - Australian Version October 2018 | Page 26
( FINANCE )
FIVE THINGS TO CONSIDER
BEFORE YOU AIRBnB
YOUR HOME
The co-founders of The Property Mentors explain
why you should look before you list, when it comes to AirBnB.
irBnB can present amazing
opportunities for home owners to
pocket some extra money; but ‘just
because you can, doesn’t mean you
should!’ Here are five things to consider
before you take the leap.
A
properties in your area, which will help
you to determine your competition. In
reality, some property types and suburbs
are simply not in high demand, and while
you may believe you have the best
property in the area, that doesn’t mean it
will be a popular AirBnB property.
What’s your appetite for risk?
One of the first considerations before
listing your property on AirBnB to increase
rental returns, is your appetite for risk.
One of the risks involved in this strategy
involves fluctuations in your cashflow –
one month you may have a very high
occupancy rate and the next month you
may not have many bookings at all.
Balancing your books and managing your
cashflow is critical, so you will need to
ensure you don’t drain your account every
month and have enough of a financial
buffer to get you through periods where
bookings are low.
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Presenting your property for potential
guests
Will your property be in demand? Assuming you’re comfortable with the
cashflow risk and your property is in an
area that will have sufficient demand, you
next need to determine how to present
your property to the market so it appears
in its best light. Your green shag pile rug
and family photos on the wall may make
you feel warm and fuzzy, but now you
need to put on the hat of your guests and
review how your property will be perceived
by strangers. If your property is already
furnished, you may need to declutter and
make the place feel comfortable without
feeling too personalised.
If you are comfortable with cashflow risk,
you next need to consider your actual
property, and realistically determine if
there is even any market demand for your
type of property. Areas that are within
walking distance to a CBD, close to a
business park, café or restaurant strip,
with public transport or other sporting or
entertainment facilities nearby, are most
often in high demand throughout the
year; other areas may only be in demand
seasonally – for example, beachside
towns may be extremely popular during
the warmer months but it may be difficult
to attract bookings during winter. A quick
search on AirBnB will show you other If you have an empty property, then this
gives you an opportunity to style it with
furniture and fit out the property to suit
the market you are targeting (e.g. are you
targeting families or young professionals?).
Always decorate to suit your target
market, but also be mindful that you want
your property to appeal to as many people
as possible, so a more conservative
approach will appeal to a wider market
and increase your chance of attracting
more guests. Of course, there’s also the
listing process to consider. You will need
to get professional photos taken, make
sure you have solid insurance cover, and
then list the property. Start by asking for
OH! MAGAZINE ( OCTOBER 2018 )
a lower price to test the market, then see
how you go with bookings and adjust your
price accordingly. Don’t start too high –
even if you feel your property is worth it.
AirBnB guests rely heavily on reviews, so
you need to attract people to book and
review first, so you can then build from
there. If you are the ‘new listing on the
block’, you may only be able to compete
on price in the first instance – even if you
have a stellar location and fancy furniture!
Be prepared for the admin
There is a lot of work involved managing
check-in and check-out, as well as
following up guest feedback, coordinating
cleaners and other maintenance items.
Doing all of this yourself may be quite
time consuming, but you are providing an
accommodation service, and remember
that people are used to receiving excellent
service from hotels, so they will expect
high levels of service from their AirBnB
host too.
Seek out the professionals
If you become serious about AirBnB, to
increase yields on your investment
property you can mitigate the risks
involved by using experts such as
Quickstay, who’ll manage all aspects of
the process for you.
Luke Harris and Matthew Bateman
Luke and Matthew are co-founders of The
Property Mentors, and the authors of Let’s
Get Real (Major Street Publishing
$29.95). For more information visit
www.letsgetrealbook.com.au