Short term rentals vs. standard residential lettings: 5 reasons why you should go short term
Higher rental income
Standard residential lettings are synonym of safety and fix revenue. However, the habits are changing and people travel much more than they did in the past, be it for few days or weeks, and Australia is no exception. This new trend has been accompanied by a huge rise in popularity of short term rentals between individuals such as Airbnb or VRBO, now being a serious competition (and threat) for the hotel industry.
It’s not surprising that tourists are now considering more and more property rentals compared to hotel rooms. That is exactly on that point that you should play your cards. You as a host are competing directly with hotels but have the advantage to host more people in the same property for a cheaper price while your guests have access to a kitchen, internet, and the opportunity to live like a local in Melbourne.
By opting for short term rentals, you might get your weekly rental income in just a night or two. So imagine the increase in rental income if your property is rented permanently, it’s a completely new potential. The sooner you acknowledge it, the more you will have the edge over newcomers on this market because you will have already prepared your property to comply with short term rentals requirements.
Extra clean most of the time
Renting your flat on short terms rentals means it will need to be cleaned before the arrival of new guests. Here, there is no room to think about the pain of cleaning your property yourself as your guests will be paying for the cleaning, which is a common standard of the industry so that your home or vacation place looks bright and fresh.
This might be repeated few times a week according to the number of bookings you generate. Knowing that your property will be cleaned to hotel standards few times a week is certainly a comfortable thought. If you rent your place through a basic real estate agency, will you have the guarantee of your place being maintained to high standards by your long term tenant(s)?
Flexibility of personal use
Congratulations, you just bought a new property! Now you are going to rent it for a long period to a tenant you don’t know. Do you ever get that feeling of restraint happiness because you have a new property but you’re not going to enjoy it as it will be occupied by your tenants?
It becomes like an abstract investment, one you can’t touch or appreciate until you reimburse your mortgage many years later. You could definitely make a much better use of it by renting it through short term rentals. While keeping the advantage of having a performing investment, if your flat is managed though short term rentals, chances are that you could get the equivalent of your standard residential income few months.
What would you do with your property the rest of the year? That is entirely your decision. You might want to keep earning as much as you can by keeping it on the short term market and spare few days to host family, friends or even yourself. Short terms rentals basically give you that flexibility to get a higher yield while being able to benefit from your property which would have been kept to high standards.
If you don’t do it, others will take advantage of it
Airbnb and other short term rental platforms are incredibly popular and people start to understand the extra value it can bring by renting their place rather leaving it unoccupied while travelling.
In an era where travelling is more accessible and becoming the norm for the majority, they will not underestimate the interest of renting themselves their property while going on vacation or long weekends.
Melbourne is looked after
Sydney recently made it in the world top 10 cities most popular for Airbnb. This has forced Airbnb to strengthen their position in the key market that is Australia. Australian listings on Airbnb can now enjoy a relative peace of mind because they are eligible for the Airbnb $1,000,000 AUD host guarantee, a privilege only shared by few other countries.
This is a serious indicator that the Australian short rental market is due to grow considerably in the coming years. And Melbourne owners are fully benefiting from it. On top of this, Melbourne which has now been elected 5 years in a row most liveable city in the world, attracting more and more tourists every year. The Australian Open, the Formula 1 GP, the International Comedy festival, the Jazz festival, the Film festival, the Great Ocean road, Philip Island, major music festivals and world famous singers or bands, Melbourne is hosting and attracting some of the world major events. So, do you want to be part of it?
Obviously, short term rental management is a full time activity, but luckily a company such as AirSolved provides Airbnb property management for a fraction of your increased earnings. The best thing is that you’ll just need one meeting to get you started. Contact us today if you’d like to know how we can help you with your property management in Melbourne.