Am I mad?

I'm still booked over 90% of the time - and some of that 10% is when I take it off-line because friends are staying and we want to use the space for something else. I still look forward to meeting guests and hearing their stories. And in a house full of women, I like having the odd bloke around to have a beer with.

 

Airbnb is all about location. The best demand will be in very highly demanded tourist areas and hopefully priced according to local hotel and competing property. Chasing Airbnb yield from short stay non tourism can be a risk.

We have a property with Booking.com in a foreign tourist town (3 units). Its very busy in summer and winter and surrounded by very costly hotels. Tourists like quality amenities and dont get the advantage of comparison. They tend to give bad reviews based on let downs. Maintain expectations and they are usually quite happy. Neither us or the former owners have even given a discount or refund since we disclose everything honestly upfront. We dont take deposits, we dont do reservations without full payment and caution travel insurance since there are no refunds. Its 80% booked by 4mths ahead and 100% after that. We used to have those little gaps of 1-2 days and now throw them on Airbnb the month ahead and they go in days. In return we wear higher clean + linen charge but for the net rent its not a concern and are thinking of raising prices for the super short stays and holding 7+ day bookings (only) to offset that anyway. (We lose 15% to Booking.com + 15% to the local PM incl changeover) In Jan when a blizzard locked the town down nobody could leave or arrive and those there just stayed on. They were grateful (and were all insured !!) and we released the other bookings money back to them. Funny most of them rebooked anyway.

Australians love to whinge and nitpick Aibnb or any hotel / restaurant. Europeans tend not to unless misled. I found a hair in my meal,, drink, bed, bath etc ??? and they want it all free.

 

Thanks all for the replies, very interesting to hear from first hand experience (poor essedonfan), Seems to be a mixed response so may come down to both good management and good luck.

Does anyone know how they enforce the 180 night stay in Greater Sydney? Are hosts required to send forms off to council each time someone stays?

Will we see an end to investors buying these properties and putting up for STR if Labor get elected and implement their negative gearing and CGT changes or are STR properties generally positively geared?

Besides usual public liability insurance, should STR managers get any other types of cover (any first hand experience)? If so, any idea of cost?

Cheers all

 

Thinking of a reply for this post has caused quite a bit of inner reflection and I think most of the problems lay with me!

As a whole, people are idiots and I struggle dealing with idiots. I thought I was the helpful type too but no matter how idiot proof you think you make something people just go to prove how uncommon common sense is.

I hate cleaning. But I am also a bit of a control freak so haven't trusted that job to anyone else yet. Ten percent of the time the place is in good condition, 60% of the time it's grubby but nothing a decent clean won't fix and 30% I want to burn the house down and start again. If I outsourced the cleaning then that would take away a lot of the hassle but then that eats into the profits (but then there's also the consideration of what I earn on a daily basis and what I'm forgoing to clean the property). There's also aspect of organising the cleaners too.

The wear and tear. Holy. Moly. Luckily my husband and I run a handyman business so a lot of it we can deal with ourselves but people just seem to have no regard for the space around them. We expected extra wear and tear but but not quite the amount that it is. We lived in the property (new build) for 4 years and it still looked brand new when we moved out and now it looks old and tired. There's even other 'wear and tear' stuff I hadn't even considered such as going through as many sheets and doonas that we do due to lube stains. No amount of cleaning seems to get rid of that stuff.

Reviews can make or break you. One bad review and it's game over...Not quite but if there's a few similar properties on the market and one has a couple of negative things said about it but others don't have anything bad said, which are you going to book?

Unfortunately, most of the ones I've seen that have bad reviews are the ones that are professionally managed, which is another thing stopping me from getting someone else to look after it. As you say, or want to do, a lot of people outsource it and they just don't have the same level of care or attention to detail and the balls gets dropped and the guests are let down at various points. Whether it's check it, cleaning not up to par, lack of supplies provided, poor advice etc.

There's probably heaps of other pain points but they're the main ones I can think of at the moment!

 

HI Kinnon,

Thanks for taking the time to reply and sorry to make you self reflect.

Worked in a support role many years ago so feel I understand your problems with uncommon common sense. I also love the feeling of helping people and would hope that over time, with continual improvement, I could increase the ratio of good over bad.

Sounds like you are very busy people with all those roles, no wonder you don't suffer fools. I'm very interested in your comment - "most of the ones I've seen that have bad reviews are the ones that are professionally managed, which is another thing stopping me from getting someone else to look after it."

How can you tell if a property is "professionally" managed by looking at the ad? Something I may want to be careful of in the future.

Cheers

 

The nature of written responses and the method of check-in usually indicates a professionally managed property.
I have plenty of time on my hands and often have long exchanges via AirBNB before people arrive. Sometimes it feels like I'm welcoming friends. In 7 years I have met every guest on check-in. As noted, I live next door so it's easy. One arrived at 11pm last night from the airport. I had the heater on in the pad and some food ready for her so she could have a snack. When people arrive in the daytime, I take them for a walk and show them my favourite café, Vietnamese place, the train station etc.
People who manage multiple properties understandably have no time for that stuff. But what I do feeds into the reviews people give my pad, so there is a partial reason behind it aside from the fact that I like meeting new people and hearing their stories.
Scott

 

@Depreciator after having listened to a podcast with Joe Gebbia (co-founder of Airbnb) it sounds you are using the platform for its fundamental objective - providing people the local experience and not just a place to stay. Not to say others aren't, but it just struck a chord given the whole idea came from Joe and his mate renting out air mattresses in their living room during a major design conference in the US and subsequently spending 3 days attending the conference, taking their guests around with them, showing them places etc and then after the guests left, the lightbulb went off.

 

Yes, I'm a bit of a poster boy for the original Airbnb. They use our place sometimes for publicity and sent a New York photo journalist called Todd Selby to stay a few years ago. Around that time I had an email exchange with Brian Chesky, one of the Airbnb founders. Airbnb has strayed a long way from the vision of the early days, but that's the what happens when a business grows as it has. I embody the early Airbnb but only because it fits with my personality. Ultimately, Airbnb is a platform to advertise a rental property and it's one with functionality that I like.

 

I stopped using airbnb as a user due to ******** cleaning and booking fees, start to find hotel cheaper, just booked Sydney Hotel is cheaper than airbnb

 

Yep. Not hard at all to find cheaper. But it's not always about price. I have stayed in Airbnb properties because I have wanted an experience a hotel couldn't give me (and because I have wanted to be able to cook the occasional meal). Similarly, people stay in my pad because they want an experience they won't get in a hotel. We've had guests who have made ceramic plates, cups and bowls in the studio downstairs. If they are staying for longer than a week, there is time to fire them and glaze them and fire them again. That makes a pretty unique souvenir. We have an English couple who come once a year for over a month. When they arrive, the bowls and cups they made on their first visit are on the table waiting for them.

 

Cleaning fees are a tough one! We charge $75 for one Airbnb and $85 for the other but make a significant loss on our cleans (Cleaning the whole place from top to bottom plus changing linens really adds up!) We'd love to not charge a cleaning fee but then it makes it uneconomical to rent our places out for a night or two as it starts to eat into profits.

Hotels can be cheaper but like @Depreciator I love Airbnb's for a bit more space (eg kitchen) and being able to stay in an interesting area, rather than the CBD of a city.

 

I think my cleaning charge is $50. I have two teenage girls I am training up on cleaning. Cleaning the Airbnb pad has become part of their regular chores in exchange for pocket money. One day they'll wise up.

 

I have a cleaning fee of $37 for a one bedroom apartment. As a guest I hate high cleaning fees as well, so I've made the choice to keep it low.

I can understand the attraction to use the cleaning fee as a fixed tariff to discourage shorter bookings, but I think its better to just actually change your booking settings to either have a longer minimum stay, or higher per-night rate coupled with higher discounts for stays longer than X nights.

 

Between booking fees and cleaning it add up a fair bit if I need to find a home like Airbnb I use site that don’t charge fee like stayz and it turn out cheap too.

 

segway

Airbnb has an IPO coming up

If you have $50k to invest - would Airbnb be a buy for you?

 

What city is your place in Depreciator? Sounds great! I just raised our cleaning fee to $150 from $125. If 8 people stay that is a reasonable cost to split, as mentioned, there is no way that would even cover it, it takes two of us four hours even if not really grubby!

 

Mine is in Sydney - Marrickville. If I do it myself quickly, the clean takes an hour. If I have two teenagers helping, it takes longer. It's one big open room, so pretty easy.
I just went and had a look at the listing and realised I need to update the photos. I've done a bit more to the space and changed some furniture.
Google 'massive warehouse loft apartment' and it shows up. Too hard to search via Airbnb..

 

So no deal in the end. Too many problems with accounts and (lack of) supplied information to warrant spending any more time investigating it further. Shame.

Thanks for all the input, every bit helps.

 

Thanks for the update, you did your due diligence and there will be another opportunity for you.

 

I have been thinking about doing Airbnb for a property in the Byron Hinterland. I have spoken to some of my friends who have properties in Byron and Suffolk Park and they do everything themselves (a granny flat out the back), one lives in Brisbane and has it cleaned (sometimes she has to clean it herself if she can't find anyone) but handles everything else herself. They do exceptionally well, and have done for several years. I also know someone who has a cheap house on North Stradbroke in the Couran Resort and Airbnb, even though it isn't in the resort pool, he pays them a fee to clean it- makes more money from Airbnb then he would in the pool. I don't know if I would buy a business like this, it could be easier and cost effective to set one up yourself. On the Byron community pages there are many of these businesses advertising to manage Airbnb.