Important things to know when renting out your short stay accommodation or Airbnb

What is it that has you swooning over a website, looking at a potential home to stay in whilst on business or trip away? What do you look for?
 
Most people look at the image and presentation of the property first to see what it’s like inside. Professional photos make all the difference in your property listing being seen up the scale or never to be contacted down the bottom of the listing. But what makes the professional photos stand out? Decor.
 
So you thought you might just buy some stuff on Gumtree and dress it up a little to start your bookings off with a few bookings. Then, slowly bookings seem to drop off and decline and you’re wondering why you’re at the bottom of the list and not seeing any bookings for weeks. Well, let’s have a look at this issue.
 
You can’t dress up mutton as lamb as they say. You can fake it, but fakes are usually trying to hide something or it’s just not working for them. If you’re going to use “everyone’s IKEA furniture”, be unique with your ornaments or soft furnishings such as cushions, throws, prints, vases etc. Go op-shopping or vintage, or look at other homeware/linen stores for some variety.
 
Uniqueness is what “sells” your space. Being the same as everyone else is average, so if people want average, they check into a hotel not a short stay home away from home. You may have a great view, but is your bed comfortable, clean and with incredible linen? Kmart patterned linen doesn’t cut it. If you really do need to go basic, choose a waffle quilt cover set, but find an amazing throw blanket or cushions. With so much selection, there’s no excuse for BORING!
 
Save a little to engage an interior designer. A designer or stylist sees what you can’t see and if you want to move up the ladder on your Airbnb listing, get your place looking amazing with a little help. It’s better to be clueless and hire a visionary, than to do nothing and lose income.
 
Think about it…what have you got to lose?

How to make guests feel welcome

 

When you first walk into a hotel, it can feel a little sterile and monotonous. When you walk into a short stay rental, whether it be via the Airbnb platform or other, you want to walk into a home, not a hotel. Guests who book on these platforms are looking for escapes away in a comfortable home, not a hotel, otherwise they wouldn’t have booked with you. So, how do you make a guest feel welcome in your humble abode? It depends upon the guest, but you cannot cater to everybody, but you can put some things in place that will leave an impression with your guests and help them to feel welcome.

  • Leave a bottle of wine – A bottle of wine is always a nice gesture to leave for couples, but not for everybody, especially if they don’t drink, but if they don’t, usually guests either leave it alone or put it in the fridge.
  • Leave a personal note – You can either leave a personal note on some beautiful stationery, use a black board or white board or send them a message via text or the Airbnb platform (if that’s the company you’re using for your listing).
  • Personal meet and greet – This is great if your space is a private room, as the guest stays with you in your own home. If you prefer to meet and greet for an entire property, make sure you are in regular contact for meet up/check in times. You want don’t what your guests to feel lost or abandoned, so guide them with effective communication. Once you meet them, ask them open ended questions about their trip. Be helpful and offer to be of assistance, but limit yourself to your availability. You don’t want someone owning your spare time for every minute query.
  • Leave a care package – Hotels usually have a bar fridge full of alcohol and snacks. Keep it simple and creative to put together your own. Bread and particular sweets or biscuits are popular, but what about something a little more gourmet? There is a risk though if your guests have allergies and can’t eat certain foods, but you could always ask your guests in advance if you don’t mind sharing the surprise of a nice care pack.

Basic actions can make anyone feel welcome. You don’t have to spend exorbitant amounts of money to help guests feel welcome, all you have to do is think about what you’d like if it was you as the guest and go from there. If you’ve ever spent time in a short stay before, think about how you felt welcome or didn’t feel welcome. Don’t over think it. It’s all about the experience and creating something special, than do nothing and leave the guest feeling insignificant.

Creative touches for your Short Stay that won’t cost the earth!

When you stand back and look at your short stay space, what do you see? Does it appear boring? Have you had feedback that says your space is plain, uninviting and missing something? So, what do you do? Ignore the feedback or get proactive and find a stylist who can assist or do it yourself.
So lets take a basic living area for example. It’s a simple contemporary space, a neutral coloured lounge with a few simple chairs and a basic white coffee table. You walk in and nothing catches your eye, so why not add these…? Beautiful colourful cushions to brighten up the room and add a sense of cuddly comfort.

                                                         Playful cushions for your lounge suite and living area
Then you think “hmmm…there’s still something missing”, you want to add more, but you’re still not sure what to add…here’s a few more ideas…
What about a little “sumfin, sumfin” adding a mirror above the lounge suite? I like the way this mirror makes the room pop!

                                                                                    A mirror frames a room
So there’s one more thing. Prints. Who can forget prints?! Humans love to look at beautiful colourful things. It all depends on your taste, but let’s just add a print(s) to an otherwise contemporary room. Check this out for some ideas:

                                            There are lots of places offering inexpensive prints for your walls
So, what’s next? Well what about a few knick knacks, vases, ornaments and other unusual pieces. There’s a myriad of candles or aroma therapy oils to choose from (although be careful with candles as it can be a safety and insurance issue). You can never run out of ideas and if you get stuck, you know where to find me to style your home!

Is Airbnb or Short Stay Rental for you?

According to Domain.com.au, Melbourne city’s rental picture looks like: rents are at record highs and rising faster than incomes, the number of properties available for rent is shrinking and properties defined as “affordable” to those on low incomes are disappearing, therefore leaving properties empty. One and two bedroom apartments geared towards investors, do not get to the rental market for the above reason as well as owing to the facts that they are kept empty by foreign owners or are leased through accommodation sites like Airbnb.
So, properties that sit vacant can be leased through Airbnb and other accommodation sites to create income for owners and agencies, which oversee properties. Seeing that this is time consuming for the agency, handing over bookings and management to a third party is ideal.
Contrary to popular belief, holiday rentals often experience less wear and tear than long-term rentals. Before a guest comes in, the property is cleaned. When the guest checks out, it is cleaned again. Most likely your service provider is doing a good job maintaining cleanliness and keeping an eye out for marks and scratches or any breakages. If you are attracting the right guests for your property, your property will remain well looked after.
The benefits of renting a property as a holiday home come at a cost. Rental returns are higher but so are operating costs. These costs are reflected on the attached spreadsheet.
Furthermore, this type of strategy is generally not as ‘set and forget’ as a traditional tenancy. There’s a need to be aware of the distinct risks that holiday homes attract. These can include:
Income
The risks of cyclical income exist with holiday home rentals, but they can be offset by cash flow planning through the year.
Damage
Guest screening, security deposits and solid terms and conditions can mitigate damage to the property. Insurance is even more important.
Neighbourly disputes
These can arise with any property investment, but specific risks apply to holiday homes. Adopting the Holiday and Short Term Rental Code of Conduct can help to minimise any disruption to residential amenity.
Regulatory risks
Ensure that there is the appropriate permission and meet the local regulations of holiday rentals to avoid compliance action by councils.
Traveller cancellations
This can impact cash flow. If there is the right risk profile, and the type of keen budgeting and money management skills to ensure cash flow is sufficient year-round, a holiday rental could help generate thousands of extra dollars in rental returns. This general income comparison of a holiday rental versus traditional rental paints a picture of what could be:

Income comparison of short stay vs traditional rental

 

Double the profit with an executive lease
Short-term rentals don’t just refer to holiday lettings; they can also include corporate or executive rentals, which can add a serious premium to weekly asking price. It can be lucrative, depending on where your property is located. The main thing investors need to keep in mind is that they have to be realistic and understand what their average rental income will be over the year, because not all listings will attract a tenant year-round.
Generally, executive or corporate leases range from three months up to 12 months, depending on the location and size of the property. An executive with a family may stay for a longer period, whereas an inner-city apartment suitable for one or two occupants is more likely to attract shorter leases.
That latter category is usually the more sought-after property type for executive leases, and will need to be fully furnished. The owner/investor can make around 20–30% above regular rent.
Insurance risks: What short-term landlords need to know…
There are certain traps for the unwary investor when using non-traditional property strategies, and insurance has the potential to be one of them. Specialist short-term landlord insurance is available, but it costs more than the standard product because risks tend to be higher. Regular landlord insurance policies also don’t generally cover property investors who rent by the room, an important consideration for those contemplating an Airbnb, short stay accommodation strategy.
It’s up to you, but to me it makes sense. Double your income or lose!