Hello from newbies to the PI scene - ACT and Qld

Discussion in 'Airbnb & Short Term Letting' started by Alan CBR, 23rd Aug, 2019.

Join Australia's most dynamic and respected property investment community
  1. Alan CBR

    Alan CBR New Member

    Joined:
    20th Aug, 2019
    Posts:
    2
    Location:
    Canberra
    Hello all, We are entering the PI landscape. Have a small farm in NSW, but also an apartment in the ACT and soon also one on the Gold Coast. Farm will remain 'home'. Looking to learn about short term rental (i.e. the Airbnb thing) for the ACT property and perhaps also for the Qld one.

    Interested in people's experiences with that approach and also how to set up the accounts and book keeping. We will have mortgages and offset accounts etc.

    I use MYOB for my small business and so any tips for how to use that for tracking things in the PI area would be greatly appreciated.

    Thanks, Alan
     
  2. The Y-man

    The Y-man Moderator Staff Member

    Joined:
    18th Jun, 2015
    Posts:
    5,160
    Location:
    Melbourne
    Welcome.

    FYI On this site, PI = principle and interest (loans)
    IP = investment property

    :)

    The Y-man
     
  3. The Y-man

    The Y-man Moderator Staff Member

    Joined:
    18th Jun, 2015
    Posts:
    5,160
    Location:
    Melbourne
    We just use excel....

    The Y-man
     
  4. Alan CBR

    Alan CBR New Member

    Joined:
    20th Aug, 2019
    Posts:
    2
    Location:
    Canberra
    Thanks Y-man. Of course. My typing is less than great, I think I meant IP.... Thanks for the tip about excel.
     
  5. The Y-man

    The Y-man Moderator Staff Member

    Joined:
    18th Jun, 2015
    Posts:
    5,160
    Location:
    Melbourne

    In all honesty there is NOT a lot to track with properties - although Air BNB will be a bit more complicated, but for most properties the property manager will keep track of things that were spent through their management. That is why people often route their bills for the property through the PMs so that they get a consolidated report from them at year end.

    Even if you don't, just a matter of keeping a folder of bills / invoices for each prop.

    Only other time you'll need some fancy formula work is if you don't have an offset and have mixed purpose loans - eg you redraw from a loan and use for a mic of income producing and non-income producing purposes.

    The Y-man
     
  6. Todd

    Todd Well-Known Member

    Joined:
    16th Oct, 2016
    Posts:
    130
    Location:
    Canberra
    Welcome Alan
    I have done the airbnb thing in Canberra a few years back with an apartment in Braddon so thought I would share some figures to help out. My advice is to really look at your figures closely, because with rents being pretty high in Canberra and vacancies very low, short term rental may not be that much more lucrative than just renting it out on a 6-12 month lease. Some costs associated with short term renting:
    Airbnb or other sites fees - usually around 5% of gross takings
    Cleaning - 2 bed apartment around $120 per professional clean approximately. may not include cleaning linen
    Management fees for short term - around 20% of gross takings (fair enough considering the time to communicate to guests before, during and after stays, manage calendar, key collection etc etc)
    Upfront costs to furnish and equip property and to replace damaged or stolen items. Approximately 15k to furnish an apartment.
    Electricity and water usage
    Wi fi - free unlimited wifi expected by guests these days
    For example:
    You may gross $1200/week for a 2 bed apartment in Braddon. Take out 20% management fees ($240), 2 x cleans ($240), 5% booking fees ($60), lets say $20/week wi fi and $25/week electricity/water. You are down to about $615/week net. Then you have the uncertainly of whether the place will get booked out. You could probably rent the same apartment for about $550/week unfurnished or $600/week furnished (in Braddon). You may then pay 7-8% commission to your property manager.
    We did the short term thing for a couple of years in Canberra then decided just to rent out furnished. No hassle, 12 month leases, no stress about bookings and almost the same return
    Don't want to discourage you too much if you have your mind set on it but consider the hassle and figures closely
    Welcome to PC!
    Todd
     
    geoffw and The Y-man like this.
  7. S1mon

    S1mon Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    544
    Location:
    canberra
    i do the air bnb thing in caberra /. have for a few years. happy to answer any specific questions. works for me but yeh i do the cleaning etc which is a pain (but worth it for the $)