The short-term property market is booming, and it’s easy to see why – Australia’s beautiful beaches, stunning scenery and cosmopolitan cities make for an excellent holiday destination. Add to that the fact that Australians are some of the most friendly and welcoming people in the world, it’s no surprise that more and more people are choosing to vacation Down Under.
With the rise of Airbnb and other online platforms, it’s easier than ever for property investors to get started in this lucrative business.
Plus, with the current state of the economy, many people are looking for ways to boost their cash flow with some passive income.
If you’re thinking about starting a short-term rental business, there are a few things you need to know before getting started. In this blog post, we’ll walk you through everything you need to know about how to get started, from finding the right property to marketing your listing and everything in between.
Before You Jump Into a Vacation Rental Business: Research the Market
Before you start listing your property on Airbnb or any other platform, you need to do some research. Not the typical real estate research you read about or hear from many so called ‘property gurus’ out there. We’ll leave that to them, what we focus on are some specifics related to short-term rental:
- Is your property well-suited for short-term renting? Not all properties are suitable for short-term rentals. Whether or not your business will succeed depends on your property’s location, target market (i.e. business travellers, families, couples), compliance regulations (see discussion below) and property condition. You need to think from a guest’s perspective and research if there is actually short-term demand.
- What are similar properties renting for in your area? Pricing your property too high will discourage guests from booking, but pricing too low will leave money on the table. That’s why it’s crucial to check out the competition and see what similar short-term rentals in your area are receiving. You can also talk to other hosts and property managers to get their insights on pricing strategies. You really want to compare the difference between what you can get on the short-term market vs putting a long-term tenant in. You may find our comparison calculator handy.
- What amenities do guests value? Guest expectations vary, so you need to know what type of experience and amenities you want to provide. Do your guests want a luxurious experience with all the bells and whistles or something more basic and budget-friendly? Once you know what guests are looking for and where your property fits in the market, you can ensure that your listing includes all the relevant information.
- What time of year is the highest demand? Demand for vacation rentals fluctuates throughout the year, so you need to be aware of busy periods in your area. For example, if you live in a popular tourist destination near the beach, demand will be higher in summer than in winter. Preferred length of stay also changes with the seasons, plus major events provide an excellent opportunity to increase yields. Knowing when demand is high will help you optimise your pricing and avoid periods when bookings are slow.
Answering these questions will help you price your property competitively while maximising profits and ensuring you’re able to meet guest expectations.
You might also be interested to read: What To Consider Before Making Your Home An Airbnb
Get Clued Up On All Your Legal Compliance Requirements for Your Short-Term Rental Property
There are a few legal considerations that short-term rental owners need to consider when running an Airbnb business. First, you’ll need to ensure that your property is appropriately zoned. For example, most councils across Australia require you to be in a zone that allows short-stay holiday accommodation.
You may also need to apply for a special licence or permit from your local council. Some states even require owners of short-term rental properties to pay higher council rates.
Along with making sure you comply with the legal obligations of owning a short-term rental property, there are also business considerations you have to factor in. For example, now you’re generating cash flow, you will need to include this income when lodging tax returns.
You may want to consider speaking to an accountant or business advisor to develop a business plan and find the best way to structure your Airbnb business, to maximising profitability while still meeting all your tax requirements.
Get the Right Insurance for Short-Term Rentals
If you’re going to be renting out your property on a short-term basis, you’ll need to ensure you have the right insurance coverage. Your standard home and contents insurance policy probably won’t cover incidents like damage caused by guests or theft.
We recommend speaking to an insurance broker about landlord insurance and getting additional coverage or looking into a standalone policy specifically for short-term rentals.
Market, Market, Market
For your short-term rental business to succeed, you need to do more than just create a listing – you need to actively promote your rental property. The most successful rental property owners are those capable of effectively marketing their properties to potential guests.
There are several ways to go about implementing a marketing strategy, but the most important thing is to make sure that the property is visible to as many people as possible. One way to do this is to list the property on popular vacation rental websites. Another strategy is to promote the property through social media channels.
And the better your listing is, the more likely you will receive real traction. For example, having professional photos taken is always a good idea because you can highlight any special features of your property.
In the description, go into detail about what makes your listing unique. Be sure to also mention any nearby attractions or landmarks that might be of interest to guests. If you put in the effort to create a well-designed and informative listing, you’re more likely to get the exposure you’re looking for.
Consider Hiring a Professional Property Management Company
Running a short-term rental business can be an extremely lucrative endeavour, but it is also a full-time commitment. If you’re not prepared to dedicate your full attention to the business, then you might want to consider hiring a property manager.
Good property management companies will be intimately familiar with the local market and will work tirelessly to ensure that your rental is booked solid. They’ll also handle all of the day-to-day operations, leaving you free to focus on other things.
Of course, hiring an investment property manager will come at a cost, but if you’re not prepared to commit to the business full-time, it may be the best way to ensure that your short-term rental business is successful.
How GrowHOST Property Managers Can Help You Succeed
GrowHOST was born out of the desire to bring professional Hotel Industry expertise to the Holiday Letting sector and help investors make the best possible returns on their investment.
We’re a team of experienced property management professionals with backgrounds in hotel management who saw an opportunity to offer our skills and knowledge to those looking to get into this growing market.
Our mission is simple: we want to help people make money from their short-term rental business by providing them with all the tools and advice they need to succeed. Whether you’re an experienced investor or just starting out, GrowHOST provide a plug-and-play management service to make your Airbnb property a raging success.
Get in touch today, and let us show you how easy we make it to get started!
Key Takeaways
Starting a short-term rental business can be a great way to earn some extra income—but it’s not without its challenges. Be sure to do your research, get the right insurance, and comply with the law before getting started. With a bit of time and effort, you can be well on your way to becoming a successful short-term rental business owner.