There has been a consistent take-up of Airbnb. The trend continues with the idea that this new leasing agreement can generate a higher rental income stream. If its to rent out a room or the entire home, many have been enthusiastic to learn more about it. The yields can certainly be higher, but let us share some great data researched by ‘The Conversation‘.
Taking note of the research conducted by ‘The Conversation’, Sydney is significantly ahead of Melbourne in regards to leasing Airbnb. Though the population density in both cities is roughly similar, Sydney is known to have double the amount of Airbnb. The trend also shows that the demand to lease out an Airbnb has been focused more around tourist locations rather than suburbs further outbound. Locations including the city itself, beach frontages and other inner city suburbs make up the bulk.
The demand for Airbnb certainly spiked with the needs of tourists looking for short term stays. In recent times this has diversified to meet the needs of business people. Many businesses are operating around the country. Corporate employees, property developers, manufacturers etc are also taking the opportunity to stay in an Airbnb. Many weddings and family events are also taking up the option. It provides the family with privacy while offering them a place to socialise in one place. With the rising costs of hotels renting an entire house under an Airbnb can be cheaper and more cost effective. Motels are a cheaper alternative, but the accommodation is generally old, outdated and uncomfortable.
Many property investors are considering renting their properties through Airbnb because of the higher rent that can be charged per night.
According to research, there has been an increase in property listings. Entire homes are up 18% from the end of 2016 to early 2017.
In view of property investors seeking this alternative investment return, many feel the return is no better than a traditional rent with a fixed term. Though the trend shows quite a substantial increase, this may start to stagnate over time give the fact that its a time consuming investment strategy. Having to clean the property after each stay, market the property on Airbnb and ensuring you have a signed agreement all require time.
Another important issues to consider before leasing your home is capital gains tax. If you start to lease your home through Airbnb, this tax assessable income may cause capital gains. A conversation that should be discussed with your tax accountant.
According to Airbnb, Australian hosts earn about $5,600 per year. This likely indicates that landlords are renting rooms out more often than an entire residence or they are leasing the property out partial times of year (short term only).
Is Airbnb right for you? Please contact us. We can sit down, assess your goals and objectives and provide guidance on the best way too lease your property.
While we have taken care to ensure the information above is true and correct at the time of publication, changes in circumstances and legislation after the displayed date may impact the accuracy of this article. If you want to learn more, please contact us. We welcome the opportunity to assist you.
June 2018
