Airbnb has been popular with travelling Aussies for years now, but even at home Australian property owners are beginning to realise the potential of renting out their spare rooms, caravans, granny flats, cottages or apartments through the well-known home sharing platform.
The number of Australian properties listed on Airbnb more than doubled last year and is expected to continue growing in 2016. There are currently more than 70,000 listings live in the country, and 18,000 of these are in Sydney alone.
So what’s all the hype about and could renting out your property on Airbnb really be worth it? Here’s what you need to know.
1. Why should you consider hosting with Airbnb?
2. Potential for Airbnb hosts in Sydney, Melbourne and Perth
– Airbnb Sydney Data
– Airbnb Melbourne Data
– Airbnb Perth Data
3. 6 Tips for making your property more Airbnb-friendly
– Consider home improvements that can add value
– Show some personality
– Pay attention to the details
– Make the safety of your guests a priority
– Little extras can add big value
– Be a good communicator
It’s easy to see how hosting on Airbnb could be a convenient way to make some extra cash if you have an unused space or frequently find yourself away from home for months at a time.
In fact, according to a report authored for Airbnb last year by economist Gene Sperling, home sharing through Airbnb can be compared to getting a pay rise.
The report shows that the typical Airbnb host with a single listing can earn about US$7,500 in one year. It also found that the majority of hosts are middle-class working families who rent out their primary residence for a few months out of the year in order to supplement their income.
Homeowners use this extra income for everything from funding their own family getaways and travelling the world to paying rent and mortgages or covering unexpected medical bills.
Aside from wanting to save money, many travellers choose Airbnb over traditional accommodation because it provides them with a unique experience. For instance, last year during the northern hemisphere’s summer months, more than 30,000 guests stayed in unusual listings such as yurts, tree houses, cave homes, boats and castles.
Travellers who use Airbnb can have a positive impact on local economies too, because they often end up spending more money in locally-owned restaurants, coffee shops and other small businesses.
If you are thinking of listing your property on Airbnb, however, be sure to research what your legal obligations are when it comes to taxes, insurance and local council planning laws.
Cities where Airbnb has really taken off in Australia include Sydney, Melbourne and Perth, and fortunately AirDNA has compiled a lot useful data showing the potential of hosting in these cities as well as the types of properties that are likely to do well.
Here’s a quick look at some of the most notable findings for each city.
Sydney is Australia’s most popular Airbnb city, and in just one year, Airbnb guests and hosts in Sydney supported more than two million AUD in economic activity, with the typical host earning $4,500 a year by renting out their property for just 37 nights.
There are currently over 21,000 active rentals in Sydney, with an annual median occupancy rate of 80%. On average, the daily rate for different types of listings in Sydney is as follows:
Entire place listings with three bedrooms bring in the most revenue in Sydney, followed by one and two-bedroom properties and studio apartments. But all types of properties bring in the most revenue from late May until early September, during the northern hemisphere’s summer months.
Melbourne is another popular Airbnb city, with more than 12,800 active listings, and an annual median occupancy rate of 80%. On average, the daily rate for different types of Melbourne listings is as follows:
Entire place listings with three bedrooms bring in the most revenue in Melbourne, followed by one and two-bedroom properties and studio apartments. But all types of properties bring in the most revenue from late May until early September, during the northern hemisphere’s summer months.
Although it has significantly fewer rentals than Sydney or Melbourne, Perth has become increasingly popular on Airbnb over last few years, and now has over 4,200 active rentals with an annual median occupancy rate of 80%.
On average, the daily rate for different types of listings in Perth is as follows:
Entire place listings with three bedrooms bring in the most revenue in Perth, followed by one and two-bedroom properties and studio apartments. But all types of properties bring in the most revenue from late May until early September, during the northern hemisphere’s summer months.
Perth’s most popular listings include a luxury duplex that can accommodate up to five people near the city centre and this quaint little hideaway on the edge of town, which is actually a renovated granny flat.
Getting good reviews from your first few guests is vital to the long-term success of your listing, so if you’ve decided to host on Airbnb, it’s important to make sure your apartment, spare room or any other space you might be looking to rent out provides good value for money.
With this in mind, we’ve compiled tips from some of Airbnb’s Super Hosts on how to pimp up your property to make it more guest-friendly, and ultimately increase your asking price.
1. Consider home improvements that can add value
Even if you can’t completely renovate the property you’ll be renting out, there might be some smaller home improvements you could make to add value.
Airbnb host Michelle has a number of listings in Cape Town, South Africa, including the luxurious Everview Suite. She also won the Unique Listing Award in 2015.
“After doing extensive research, we realised that the main things we wanted to incorporate into our property from a rental perspective were en-suite bathrooms and a swimming pool,” she says. “We also wanted to maximise the gorgeous views of the ocean, Lion’s head and Table Mountain.”
If you can’t make any major changes, Christine says it helps to focus on having neutral colours as well as smart, clean and well designed bathrooms and well-equipped kitchens.
Other smaller things that can result in more bookings and are easy to implement include free Wifi, comfortable indoor and outdoor seating as well as flexible sleeping arrangements.
“We designed our house specifically to be able to have two single beds in each of the three bedrooms,” she says.
“These can be configured either as two single beds or as one king sized bed, which gives guests quite a lot of flexibility in terms of sleeping arrangements for different kinds of groups such as families, couples or friends.”
2. Show some personality
One thing new hosts should keep in mind is that many people choose Airbnb because they want to experience something different and aren’t necessarily looking for traditional hotel atmosphere.
“Let your own personality shine through as a welcoming beacon to your guests,” says Airbnb host Lia, who rents out a number of private rooms and a guest studio in Pasadena. She was also the winner of Airbnb’s Community Award in 2015.
“There is a guest for every type of listing. If you like bold colors or designs, there is someone out there on your wavelength, so don’t feel you have to change your style to a calm Zen design to attract guests.”
She notes that while it’s important for your property to be immaculately clean and have a thoughtful and convenient layout, it’s also good to get creative with your design concept
“I’m fortunate that my grandfather was an artist, so I have lovely art in my home, and I’m also a photographer so my own photos are part of the design mix,” Lia explains.
But, she emphasises, you don’t need to be a professional artist or spend a lot of money to decorate your walls, as you can use posters or even create your own art.
“Try cutting up old calendars or magazines and making collages of words and pictures that appeal,” she says. “Choose theme words like ‘Dream,’ or ‘Laugh’ or names of places around your area and then put together images that speak to the theme words.”
3. Pay attention to the details
The devil is in the detail, and it’s often the little things that let new hosts down.
Airbnb host Frans, who rents out a Charming Villa near Amsterdam in the Netherlands and was the winner of Airbnb’s Memorable Arrival Award in 2015, notes that it’s important to mark your front door clearly with your name and number to make it easy for guests to find your home.
He also suggests marking your private spaces as well as bathrooms and toilets to avoid confusion.
“It’s handy to have a socket adapter in the room or maybe even install a socket with a USB port so everybody can charge their phones, laptops, or tablets,” he says.
“Leaving a printout of your Airbnb travel guide together with emergency and taxi numbers, your personal phone numbers and any important passwords is a good idea too.”
When setting up your listing, he says it’s a good idea to ask for an Airbnb photographer and prepare the rooms as you would for guests. Writing a short but catchy description of yourself can also make people feel more comfortable booking your property.
Another thing that can help guests feel welcome, according to Airbnb host Lia, is including extras that many guests forget to pack or can’t carry on an airplane, such as boxes of tissues, small shampoos and body lotions, a hair dryer, iron and ironing board, bath robes and even kitchen basics like coffee and tea, salt and pepper and dish soap.
“I also leave my guests a plate of welcome cookies from the bakery around the corner from my home and there is a jar of small candies in each room. I’ve had guests mention the candies fondly in their reviews, and it’s a small touch that is fun and simple,” she says.
4. Make the safety of your guests a priority
Airbnb host Christine, who rents out the quaint Wombats@Glenbrook studio apartment in New South Wales and was the winner of Airbnb’s 2015 Hero’s Award, says it’s important to ensure that all services and facilities are in good working order before accepting any guests.
“That faulty tap or loose switch that you know how to manage may turn out to be an expensive liability or safety hazard when in the hands of an unfamiliar user,” says Christine.
“Aside from damaging your reputation as a host, poor property management can also invalidate your home insurance if you’ve knowingly increased the risk of an accident by not attending to something that should have been fixed or removed.
For example, I recently had all my battery operated smoke alarms replaced by a licensed electrician as I was repeatedly finding myself delayed and inconvenienced by having to replace a stream of flat batteries,” she explains.
She says using skilled and qualified tradespeople is essential to avoiding property damage and safety risks, and when you do find a good tradesperson, she advises staying loyal and paying your accounts promptly to increase the likelihood that they’ll make time for you on short notice when a domestic emergency occurs.
“Take the time to thank them for a job well done, as they’re the people who fix your broken bits and help to ensure that your guests have a smooth stay. That’s certainly been my experience.”
5. Little extras can add big value
If you’re looking to increase your nightly rate, there might be some fairly inexpensive additions or alterations you could make that would allow you to up your asking price.
For instance, investing in a sleeper sofa or fold out bed allows you to accommodate more people, which means you can charge more too. Or if you live near a beach, you could include the use of surf boards or snorkelling gear in the price.
Airbnb host Lia recently decided to transform one of her rooms into an enclosed studio apartment by closing off one door, which she says has significantly increased bookings.
“The room has two doors, so I closed off one of them by putting a bookcase in front of it and adding a latch on the door so it can’t be accidentally opened from the other side,” she explains.
“I also had a lock installed in the door to the porch so that the room has a more private apartment feel, and added a kitchenette by shifting the furniture arrangement and adding a small fridge, microwave, kitchen island cabinet and a dining table.”
Of course, Lia did need to hire an electrician to add an outlet on its own circuit to accommodate the fridge and microwave, and also paid for the kitchen island cabinet and fridge, as well as the locksmith and lock, which all added up to around US$800, but she says the investment has definitely paid off.
“My bookings for this room have increased so that now it is booked almost 100% of the time and I can charge US$25-35 more than before, and even more in peak season,” she says.
6. Be a good communicator
One thing all four hosts emphasised is that communicating clearly with your guests before and during their stay is extremely important if you want to get good reviews.
“Stay in touch with guests as much as THEY would like,” says Michelle. “Some guests like to have local recommendations of restaurants or things to do, while other guests have a clear idea of what they want to do and just want some space and privacy.”
In both cases, however, she says it’s important to be available so that guests can contact you if they need to.
Lia says it’s also important to vet your guests carefully before they book and have a brief conversation about why they are coming to your area and what your house rules are.
“Remember you are running a hospitality business and customer service counts,” she says. “It can be a challenge to offer good customer service if the guests are not the right match for your house. It’s hard to be polite if guests aren’t considerate of your needs too.”