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. 26 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