The Airbnb explosion in Sydney

Or cashies?

 

"get under get down". Like that one.
If you stay down for too long you will always be down.
Big worry if you are young and talking like that.

 

how could yo be under the threshold unless your unemployed

then you still have all the other issues attached & you can't say your doing it as a hobby, it is a commercial transaction. If you have other rentals, your cooked if caught on this one.

 

Not having a go, but could ? why not do ?

There was a story on the other night about people down there who own multiple units in a normal residential area is how they were painting it, who professionally run AirBNB & it is causing bother to the other owners and building managers.

But I have rented apartments before where some are owner occs, some normal renatls and % are short term stays, difference is the physical professional management I guess.

 

Coz I have one apt atm as oppose to 3 years ago which I live in while the rest were sold and yeah I rather not do Airbnb and share with others. there is some truth to it but unless u get some difficult short term tenants again have no real Airbnb experience as a landlord but rather the guest.

 

Can you send the significant other to work while you manage a bnb or two whilst eating chips watching Dr Phil?

 

Ahh...yeah, I see, I think if you were doing others, you would need to be pretty close by as it seems a hands on thing.

Maybe managers will get onto managing things for people who want to do this but are remote, time will tell if it really flies or is just a novelty.

 

You know what, it probably would not be a bad thing if you can afford to hold the type of property that would reliably attract people so it was used properly, but I will keep my existing job, I also do not like Dr Phil, he is one of those that throws stones whilst surrounded by glass

If this had come along 10 years ago, I know someone in my family would have been doing it and would have smashed it out of the park, they now have little interest in more money and dealing with people (which is the main problem with most of these types of things)

 

I remember a while back in another post I saw this girl doing 4 X 1 bedder at $150 per night near southern cross station in Melbourne CBD. She had 70-80% occupancy and was most likely living in the building.

 

No such thing as demand catches up to exceed supply. demand meets supply at the equilibrium price and quantity traded.

 

Demand catching up to supply means less stock, pressure increases on prices. When demand exceeds supply, very low to no stock, prices remain strong and even climb further.

Thats all im saying.

 

And its usually in that unbalanced peiod that people have the opportunity to make money/lose money (short term) depending on which side of the equation they bought at.

 

My experience/ 2 cents as a Air BnB host for the past couple of months of a Studio Apartment. Air BnB are a transaction/volume business, they are absolutely in the game of high number of units available to the market with frequent transactions. With that in mind, Air BnB would aim for a property in ever block in every suburb.

I think the model works at it's best when you have hosts that manage single/double and perhaps 3 sites under their portfolio. At that point you can offer a real experience for the traveler, something unique but also a business transaction.

What I am seeing in Melbourne (take South Yarra for example) is cartel activity, where you have now established PM companies that many manage 5-6 properties in the one building, scaling off economies of scale with cleaning and key service. They currently rent the apartment for peanuts (new 50-70 sqm apartments, great location) for $70-$80 a night in peak season. 100% book rate, with 100's of ratings. The flood of properties will push out the single/double property Air Bnb host and then over time they will increase price with their monopoly.

This creates a cheap hotel service and the expectations of all travelling guests is that of low cost.

Just my observations, interesting to read the Airbnb forums as many hosts are exiting for this reason. Anyone had similar experience in metro areas?

Jeremy

 

I set about doing a test to see if it is viable to operate Airbnb apartment as I had free time over the last month.

I found it hardest to find a suitable apartment to rent. Every time I suggested subletting the owners were objecting to it. Finally one agreed although for slightly higher rent. I check with building management and they were ok with it too as long as there is no problems from guests.

The place was already furnished and near CBD, so that was great. One aspect I noticed is that you had to have a really good location if you want to make it work and have max occupancy.

We spent about $1000 more to get the place to a certain standard. We started of with rate that was 10% less than the surrounding places since we didn't have any reviews.

We set the min night for Jan and Feb for 2 nights. After we got some reviews we increased this to 5 night min.

So this is occupancy percentages so far at 11/01/2016 (after about 17 days):

Dec: 25-31 : 100%
Jan: 90%
Feb: 96%
Mar:74%
Apr: 20%
May: 51% (had a lady book the place for half the month)
Jun: 13%

After first 3 reviews we increased the price which is significantly more than the surrounding properties. We also increased the cleaning fee from $50 to $130. We were thinking of increasing it again but best not to be too greedy.

I have to thank my wife for this and her communication with guests. She is very attentive and accommodating. She knows how to convert the inquiries into bookings. Another thing is the design of the apartment. This is where her touch again worked very well.

My wife is between jobs and when she realized how much she was making through Airbnb she is considering doing this full time with at least another 2 properties.

We underestimated how much cleaning needed to be done. We change all the bed sheets after each guest, we leave a bottle of wine and buy chocolates. Every guest we had so far mentioned the little touches and how much it means to them. We can do the cleaning ourselves right now since it is only one place however my wife is training both our mums on how to do the "proper" way. So when she has 3 planes she can attend with same care.
We tried a cleaning company but unfortunately the standard she is after was just not there.

I have done forecast for the first 6 months and so far we are exceeding the forecast. The profit after all costs each month is anywhere between 1700 - 2300, depending on occupancy. Considering how it is going so far i think it will be closer to the upper range.

We got his place for 6 months only to test this. We will catch up with realestate agent to extend a lease by a year.

This was during "hot" season so we will see how it will go during "cold" season. Anyone already AirBnBing in Sydney last year? How did you guys go during winter?

 

Great to read that analysis, Excalibur.
Yes, to do it properly it can be a lot of work.
I have had my place on Airbnb for 4 years now. It is a pretty unique space so I have no problem filling it - booked solid till mid April.
It is a self contained space, but in a building attached to our house so servicing it is easy.
I think it takes a few months for new Airbnb hosts to find their feet. I am pretty choosey and knock back about 90% of enquiries - I have worked out the guests who are best for our place. I have a 5 night minimum, but tend to attract longer stays. Again, this works for me.
Scott

 

Good to hear Scott. I did do a lo of research before we got this place and it made sense to do it. We currently live 15 minutes walking to the apartment so its easy to service it. We wouldn't want to look for other places that are far away.

So far it has been very enjoyable and a lot of people are really nice and have wonderful and interesting stories! My wife is also rejecting a lot of queries if she doesn't like the people. When we had 2 nigh minimum the average length of stay was 4 days. I think we can have 100% occupancy if we wanted to fill the gaps. Although no point as it can be a lot of work.

We noticed too that people are after something unique, so wife is always working on new fun ways to achieve that.

In your first 2 years how did you go during winter? did you have to reduce your price a lot?

 

I don't change the price much for the seasons. I do have a good monthly rate, though, so I tend to attract longer stays, which I like. I have a couple from London arriving on Feb 1 for 2 months - they stayed for the same 2 months last year.

 

@geoffw
Only 4 days here.. Yes you are right about small complexes, this one looks like 6 apartment's and the owner owns 2 of them.
We are staying in Poblado. Coming over the hill when coming from the airport is an amazing site all the high rises.
Did the cable cars yesterday and went to Guatape (the rock) today.