Any Airbnb Success Stories?

It seems like Airbnb has become more and more competitive and is turning into uber, my thoughts are these companies are flourishing by being able to pay below minimum wage, people don't take into account their time, repairs/ depreciation etc. When they do its pretty ridiculous some only breaking even etc. I have looked into Airbnb a few times and the numbers just don't add up, maybe its just my area, but is anyone else having using it as an investment strategy and having success?

 

I think plenty of people doing well, myself included. I probably agree that increased competition is something I'm seeing, and it might end up being a very property-specific strategy rather than a broad-brush thing that anyone can do with any property within a certain area.

 

Its more like anything that takes off. Everyone wants to have a piece of the pie. So they get into it without doing any numbers or a due diligence.
When so many of such people fail, they complain that its not worth it (regardless if they thought it through or not).
Then after hearing so many of those stories later people like me and you end up coming to conclusions that AirBnB/Uber etc is not so great after all.
Well the forum is full of people who’ve strategically planned for their properties to get into AirBnB and they’ve done great. And some may have actually backed off after doing their numbers.

 

I have put up quite a few posts in regards to the success we've had with airbnb, and I know quite a few others on this forum have also had great success. A summary of why I like airbnb:
- We have two apartments in inner Melbourne which we airbnb full time. These areas both have horrendous rental return. Airbnb means that we set up a bank account in January 2017 and have all incomings and outgoings out of that account and we've never topped it up. This is compared to being $100's of dollars out of pocket each week if we listed it traditionally
- We have another house in Ballarat for which we had traditional tenants. They were horrendous. We couldn't (easily) get rid of them until the end of the lease. Bad airbnb guests can be kicked out immediately (knock on wood we haven't had any bad ones yet)
- maintenance gets done immediately rather than having a problem fester.
- there are tools out there that mean very little time impact (i'd estimate 1-2 hours a week maximum).

 

I think it was easier when I started 3 years ago. Overnight i'd often be greeted with multiple requests to book, often looking to book the same nights so i'd preference the ones with the better fitting/longer stay enquiry.

Now, I still tend get full occupancy (at least 85% because I don't take 1 night stays), but the days of having multiple booking requests coming through overnight are basically gone. Airbnb might be doing something to blockavailabilities if a request has already come in for certain dates, but I still think the volume of enquiries aren't coming through as much. I think it's due to competition.

 

what sort of gross yields would you expect with airbnb's? say inner city location

 

I think the gross yields aren't worth comparing since it has a different cost profile to traditional renting. Ie furnishing , stocking food and essentials, cleaning, laundering, management, insurance, time, etc

 

Are gross returns ever worth comparing? Always use EBITDA as everyone's cost base is different.

 

I just met someone who is doing this and she says it's changed her life. A couple of her properties attracted not very good tenants but great travellers. I just started to look into it and wondering if it's worth it. The mowing alone for one of my properties just cost $150 so I think a granny flat or something would help split up expenses and boost returns.

 

I think you really need to do your research before necessarily doing it with your property - especially if the plan is to build a granny flat for it.

As I said earlier, I don't think its something you can just do anywhere or with any given property - I expect especially with more competition in the future, only certain properties will be the ones where its really profitable and worth the effort over a traditional long term rental.

 

This! I suspect the same. I noted that once I have a month booked ahead (my occupancy rate is about 75%-80%), the listing views drops significantly.
Another finding is that once I changed the booking setting from 1 day minimum to 3 days minimum, the listing views dropped as well, so at some stage I may need to bring it back down.
After 4 months hosting I now think Airbnb as a matching platform rather than a traditional hotel booking site where guests get to see all properties in a area. On Airbnb it matches guests with properties, once a properties is booked, other guests cannot see the property for the period they want.

 

Leased 3 apartments in the Melbourne CBD, subleased them on airbnb. Two were furnished, 1 we furnished. Makes more sense to do it that way than to buy and put it on airbnb because the landlord pays rates, body corp, etc.

When we started about 2 something years ago we were getting about $1750 to $2500 profit on each apartment on an average month. Summers were very busy.

Every day more apartments are listed. Plenty of management companies are driving the price down and there's an oversupply of apartments in the cbd so the margins are smaller.

We're wrapping it up next month because we can't be bothered anymore and lost the desire to keep expanding quite some time ago. Still make some money but if you want to do it full time you'll just need to get a large number of apartments to make it worth it.

 

I had some apartments located in non-tourist areas, only close to airport. I found airbnb isn't worth it compared to long term rent.
Yes, a booking can make double compared to long term rent, but need to factor in vacancies and all the other additional costs.
The only good benefit I found with airbnb is it allows cash flowing very quickly on listing. and that then allows you to find long term tenants without feeling every week vacant is money lost.

 

Don't see any value in renting a room in your own home as you lose a portion of your capital gains.
Much better to rent out whole home for up to six years and you don't lose capital gains
Investment property or rental ok in a strong market. We have people renting out rooms in there own home our area for $40 a night minus ex's. What is the point?
You become a tax collector for the goverment.
A fee collector for Airbnb
and a sheet washer. Yuk

 

Now that I have finally got a handle on doing this after 7 months, I can dedicate a bit of time writing about this. I would say that Airbnb in typically lower rental yields like Sydney and Canberra are great! As it stands my average weighted gross yield is 7.41% across my portfolio and that's all thanks to Airbnb where my average weighted gross yield is 8.35% (with a significantly higher net yield than the long term rentals).

As a Pricing Analyst I've had a number of years of experience in pricing goods and services so the important thing is to attempt to turn your place from a relatively elastic to a relatively inelastic good i.e. something that sets yours apart from the other hundreds and thousands of Sydney places so that people won't substitute yours for another cheaper and identical "good". I target people who are comfortable being in what I describe as a budget hostel living arrangements and you're sharing amenities with people you know whether that's family or friends rather than strangers where you can't leave your valuables lying around. There are far fewer competitions for the 6+ guests group who are happy to sleep in close proximities in exchange for cheaper accommodations. With the $10/guests extra cost you can easily earn $150+/night for a 2 bedder (that can sleep between 6-10 people) or $200+ (sleeps 4-10 people) for a three bedder in Canberra and at the same time the guests are paying same or similar prices per person per night to hostels so that's what I call a win-win situation.

If you have the time I would recommend that you do the cleaning yourself for it to be far more lucrative. With all the mental stuff I do everyday, I find it almost relaxing to do cleaning for an hour and do some thinking! After just over two years of accumulations I'm able to finally maintain a positive gearing before depreciation which I never expected when I started investing and I've worked out that in the next couple year based on current salary we will reach financial independence (for me this means being able to pay all our expenses comfortably) with our projected savings in the offset account (reducing interest amount). The interest amount is far the largest component of expense you'll pay each year so once you get this down, you're sitting a nice little earner!

The only thing I would like Airbnb to add is for the ability to set a minimum number of guests but for now, I'm setting a price thats undesirable unless you have more than 4 guests.

 

Can you increase exposure by listing the same property on other sites at the same time such as booking.com, Trivago and Stayz.com as well as Airbnb and monitor or link the availability calendar somehow to increase the chance of greater bookings?

 

You are putting 10 people in a two bedroom unit?
Marg

 

Keep in mind insurance and whether short term accommodation is a lawful use under the relevant town plan before jumping into Air BnB

 

Correction: I'm giving groups the opportunity to include up to ten people into the booking if they wish. There is no pressure for them to do so. At about ~$20/person/night if they want to save money and do so then I'm happy to obliged and I've got all the necessary amenities (1 King, 2 king singles, double sofa bed, two ottomans into single beds and two queen air mattress). I've tried to look for the maximum amount of people I'm allowed to have and I can't seem to find this anywhere.

I've received a lot support and encouragement from the groups I mentioned above who are relieve that at last there are I'm providing them with affordable accommodation as they struggle to find such a place when they go on holidays, especially in Sydney!

I'm not sure what you issue is, if they book the place then it means the place is suitable. I'm an Economist by trade, if the demand is there then I'll supply the product and especially this one as I knock out a fair few competition and you have to set yourself apart if you do Airbnb in Sydney. I've only received good feedback and haven't had any issues with any guests yet and don't expect to as if they wanted more space they'll go elsewhere!