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Managing Airbnb remotely

Discussion in 'Airbnb & Short Term Letting' started by geoffw, 30th Dec, 2015.

  1. geoffw

    geoffw Moderator Staff Member

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    I'm looking at the possibility of buying an Airbnb as a going concern. It's in another city, and I'm wondering about the practicality of managing it remotely, and hopefully the costs involved.

    Thanks!
     
  2. Gockie

    Gockie Be the change you want to see in the world Premium Member

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    I wouldnt do it unless you have a trusted person (maybe retired so they are available any time) close by in that location. But I wouldn't want to compel someone to stay in the area if they wanted to go on holidays or away. A young stay at home mother can be good if they live very locally, but being far away I'd want to already know them well first, and check if they are happy to help you out. I'd pay them a cut for each booking.
     
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  3. Ed Barton

    Ed Barton Well-Known Member

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    I hope you're not going to pay extra for it being abnb? Why would it be worth more?

    You can do the bookings remotely; from anywhere. But you're going to need someone local to clean and launder. What happens if the cleaning (wo)man doesn't show up? A change over clean on a 2 bed will be 100+. Laundering the bedding will be 50+. If you live locally you can pop in and do the cleaning yourself. You can have multiple linen and wash/dry/iron it yourself at your leisure. If you're doing it remotely you will pay. On only one 2 bed it will be top price.

    If you do go down this route, some advice... Hotels, which ABNB is, make the profit at the worst times of the year. It's easy to fill a hotel a peak times. As long as the turnover and other costs are covered it's best to have bums in beds.
     
  4. Depreciator

    Depreciator Moderator Staff Member Business Member

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    Do the numbers based on it as a normal long term rental because if you get do bed in by a neighbour, you'll have to stop doing the Airbnb thing. Unless, of course, the place has approval for short term letting.
     
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  5. D.T.

    D.T. Specialist Property Manager Business Member

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    There are also property management companies that look after these too.
     
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  6. Gockie

    Gockie Be the change you want to see in the world Premium Member

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    I just think they will charge an arm and a leg though for the most part. For instance, there's a big fee for key handover and a huge fee for cleaning (someone I know has a house in the Blue Mountains and she was paying the cleaner $170 for each changeover)
     
  7. Ed Barton

    Ed Barton Well-Known Member

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    and it's mostly justified. A hotel style room will take no more than 15 mins to clean, if done daily. If you've got a hotel then a cleaner can do 5+ an hour. That might be $10- labour per clean. If you only have one hotel style room then with 'call out fees' it's likely to be more like $50+ per clean. Same with the key handover/return - if you don't have a system that involves no extra labour then doing handover/return will cost $30+ a pop.

    $170 to clean a house once a week (to the standard of hotels) is not unreasonable at all. Laundry is also far more expensive than most people think.

    If your place only rents for a few bucks a week then these costs are very significant. If it rents for 10k a week then they become less significant.
     
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  8. Chilliblue

    Chilliblue Well-Known Member

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    That is a fair price for a proper house clean.

     
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  9. melbournian

    melbournian Well-Known Member

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    If it is in Melbourne there are companies that manage on u behalf. There is a company called hostkeep that does everything for u end to end.
     
  10. JacM

    JacM VIC Buyer's Agent - Melb N & W, Geelong, Ballarat Business Member

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    Agreed (that $170 is justified for cleaning). Some friends of mine have a holiday house which they let out to holiday folks. Just the sheer fact that it is a house means there is a fair whack of space to clean. Vaccuuming even when things are in good order is going to be 30mins easy. Then there's floor-mopping. There's washing of linen, making of beds, doing of dishes, cleaning of bathroom etc. I feel tired just thinking about it. I recall one occasion when the cleaner had notified them that she had attended the property to do the exit clean and there was something on the pillows which she hoped (but was unsure) was chocolate. $170 for a clean is cheap.
     
  11. Gockie

    Gockie Be the change you want to see in the world Premium Member

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    And that's why I have a 1br unit and a 2br unit for Airbnb... personally I would shy away from anything larger.... keep it simple and easy....
    But anyway... horses for courses... and if you are happy to pay fair dollars for the cleaner... it provides good local employment.
     
    Last edited: 9th Jan, 2016
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  12. geoffw

    geoffw Moderator Staff Member

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    The one I'm looking at is just a studio. Presumably cleaning would be considerably less.
     
  13. D.T.

    D.T. Specialist Property Manager Business Member

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    Where abouts Geoff?
     
  14. Casteller

    Casteller Well-Known Member

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  15. geoffw

    geoffw Moderator Staff Member

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    Melbourne - St Kilda. One block from the beach. Showing three years of airbnb rentals with gross 10% return. A friendly body corporate.

    I'm not going through with it. Working on equity for a startup doesn't do much for serviceability.
     
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  16. Ed Barton

    Ed Barton Well-Known Member

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    That's a really crap return. Would it even be 5% net?
     
  17. D.T.

    D.T. Specialist Property Manager Business Member

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    Better than standard real estate in the area (though more time involved)
     
  18. geoffw

    geoffw Moderator Staff Member

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    Around 7.5% net managing remotely. The gross return didn't include the cleaning fee.

    Being Airbnb the management of bookings is handled by the owner.

    But I was interested in the property for growth potential as well as good returns.
     
  19. Ed Barton

    Ed Barton Well-Known Member

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    Maybe if you want a job as a cleaner and launderer.

    If you add up the time of running an airbnb even at min wage I doubt you'd get more than a 5% return on average. I was surprised that a quick google said the commission is only 3% + tip - is that right? No doubt there's places where you can do a lot better without forcing grandma to do the cleaning for free.

    It's not about Airbnb (but maybe) but I've vaguely looked at holiday lets on the GC. High end, absolute beach front, say Palm Beach. It's a great deal if everything adds up. Unfortunately I think
    2+2 will probably equal 3.
     
  20. Ed Barton

    Ed Barton Well-Known Member

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    What sort of place? The gross to net ratio looks pretty good. Is it a high end place?