I'm doing another Airbnb pad - reluctantly

I have a local flat that is vacant on Monday. It's the one I renovated earlier this year and the short term tenants are moving on.
I had no takers for it as a permanent rental via an agent at $420pw, so I thought I might Airbnb it, but put it on for a minimum stay of 30 nights.
Looking on Airbnb yesterday when I did a search of flats available for 30 days from October 1 at under $3,000pw, only 13 showed up - and some of them were a fair way out of town.
I put it on Airbnb and Gumtree.
The Gumtree listing was $495 per week and I got a hit in a couple of hours. He's having a look on Saturday and I suspect he will take it.
The Airbnb listing worked out at $580 per week and I got a hit on that overnight. Pity I sort of said the Gumtree bloke got in first.
Decent priced furnished accommodation is very hard to find in Sydney. Just as well I have a lot of spare furniture.

 

When we came back from a year stint at overseas, we were looking for short term (3-4 months) furnished accommodation in Sydney- it was very very hard. We thought we got one from furnishedaccommodation.com.au but was cancelled by them due to storm damage. We end up renting a run down unit around parra and costing nearly $650 per week

 

This post has inspired me along with the success @Gockie has had with Airbnb.

Here's my situation on an IP in Alexandria.
Large 1-bed, 1.5 bath with balcony (65sqm total with 55sqm internally) and pool/lift/supermarket/bbq area in building. Very close to green square station and cafes.

First question: what would say 'minimum 1 week' airbnb achieve for this property? Currently I'm getting 475pw from a fixed tenant. Is say 900-1000pw reasonable for this type?

Second: what standard is expected for this location and type? I.e. obviously each week I'd leave a weeks worth of linens, toilettries, tea towels etc. But anything else? I would need to furnish so.. high end i guess bed, lounge, dining table (there is a study nook too). I guess i'd need to pay for all utilities of course plus broadband. Anything else? Flowers/plants? Bbq on balcony? A local guidebook for the area? A bottle of wine/champers in the fridge??

I ask because im in a rock and a hard place with the tenant...I've got a great tenant who has been there for 10+ years. Tenant is on month to month and pays below market rent. Tried to bring tenant rent up via agent and also get them on a 12 month fixed lease. Tenant won't have a bar of it and will threaten to leave if rent is too high. At the lower rate on month to month tenant is happy to stay a long time! It is a risk because with all the new OTP in the area dumping on markets, tenant could easily jump ship to a brand spanking new rental, fpr same rate as id increase rent here, to.

Any guidance from those executing this strategy currently, would be great!

 

@C-mac you're expecting the same rent from a 10+ year old property as a brand newie? Not going to happen even if you repainted and refurbished.

 

Without knowing the market in Alexandria, I'm sure you could double the current rent per week on Airbnb, but....
1. You need to furnish the place. Not flash, but at $900 per week it needs to be well equipped. Furniture is easy, but boy there is a lot of little stuff you need to get for a kitchen especially.
2. You might have problems doing Airbnb in your building - lots of hosts have that issue.
3. Yes, you will be paying utilities.
4. You're going to need a cleaner solution.
5. There will be vacancies in the winter.

 

As @Depreciator suggested, you can double the rent when doing AirBnB. Take into consideration the points he suggested, especially cleaning!

I have detailed my experience with AirBnB
Would you AirBnB your IP ?

I would recommend it, but you need to look at it as part time job. If you have more than 4 places then it becomes full time job.

 

Yes, the cleaning. If you pay someone it eats into your profits and they will inevitably let you down. If you do it yourself, you ideallyneed to live close-by.
I'm doing this flat minimum 30 days rental because I don't want to deal with it too much despite the fact that it's only a ten minute walk away. (The 30 day minimum should also ensure I don't get other residents off-side.)

 

C-mac. I'd bank on $850 per week. Just Ikea level furniture is fine. I found European students moving out of Sydney, all their stuff was ikea (and with instructions) and bought nearly everything off them for a song. Everything was no older than 18 months old.

Winter I had no vacancies (just make the prices reasonable) and New years jack the prices right up.

 

@Depreciator... Airbnb has started a new thing in Sydney where other people can host your spaces and they just get a cut. You wont need to have such high min stays and increase your yields potentially.

 

Often on Gumtree people sell whole house lots of furniture and stuff - I'm guessing it's usually overseas students returning home.
I had heard about that Airbnb thing, Gockie. With getting other people to manage the property, the increased revenue from more frequent renting would possibly be absorbed by their fee. It's a good thing for people who don't live close to their property, though.

 

That's exactly how I bought.

I think so... I could do it for my Brisbane one. But I wouldnt want to be the doer (unless I worked very parttime)... i'd rather be the owner.

 

I did the numbers on getting someone else to manage it for a fee and all you would get is extra 30% than what you would get if you rented long term.

 

Okay, so the bloke from Gumtree who looked at flat moves in tonight. It's $495pw and the place was only vacant 5 days. It will be an open ended arrangement as he is not sure how long he is going to stay in Sydney. I would have had in total 10 enquiries from Airbnb and Gumtree combined.
One enquiry was from a local couple who need to move out for a few months while a reno happens to their home.
If the bloke bails before Christmas, I will fill it easily and at a higher rent. He's a good guy and will give me plenty of notice.
So I have confirmed that modest, short term furnished property in good locations in Sydney is very sought after. I would only ever consider doing it for a minimum stay of one month because I can't be bothered managing more frequent turnovers.
Scott

 

Theres a huge demand for short term rentals of less than 6 months....

 

Property managers hate them, of course - it's a hassle keeping track of the inventory. They discourage people doing it which keeps the supply very scarce.

 

Would be interested to see how you get on with the 1mth thing. That i think would be better than frequent short stays

 

It's only a ten minute walk from home, but I'm not interested in doing shorter stays there. More money, but more work. In my other flat around the corner, I have just had people move out after a one year stay. That one was nice and easy to manage.

 

By good locations do you mean inner city? Where is your unit located? and is parking important? I have some in Ultimo area but would need to be minimum 2 months stay as per body corp in accordance with sydney city council rules so perhaps they're not suitable.

 

So true! my PM hates furnished apartments for long term rentals, let alone short term.

 

If Body Corp specifically says min 2 month stay, personally I wouldn't try to do it there. Ps. Best to have a car space too.