Published in · 5 min read · Aug 11, 2017
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As the founder of Hey Tom — A company that specialises in managing short term rental properties for customers in Sydney, Melbourne and the Gold Coast in Australia, I often get asked ‘What should I look for when buying a property specifically for Airbnb?’
There isn’t a single quick answer. So I thought it would be best to describe some of the factors that you should consider.
Companies like Airbnb have opened up pandoras box in the last few years. Not just because they have challenged traditional notions of accommodation but because they have also challenged the notion of traditional home ownership and property management. As we progress to a more transient society, people are working flexible hours and travelling more, and in general wanting more choice.
This has opened up a great opportunity for home owners to have more flexibility in the way they manage their investment properties.
For example, we have 1 customer who has chosen to renovate his own home and do it all himself. By putting his home on Airbnb rather than giving it to a long term tenant he is able to block off days when he is free and has the time to go in and do a bit of work.
We also have customers who due to work commitments need to live in two different places. Rather than having to stay in Hotels they are able to use a service like Hey Tom to fill the gaps and have people stay in their home whilst they are in a different city for work.
Here are some of the important factors I would consider if I were looking to Purchase a house or apartment for renting on Airbnb or similar short term letting platform:
Location:
Location would be one of the most important factors to think about when considering the success of the property. Try to think about what areas are good for tourists. Is it a walkable suburb? Is it close to Amenities such as Public Transport, Hospitals, Schools and Universities? Are there entertainment precincts nearby? Would business travellers find it convenient to get to the CBD? These are important to consider as there are definitely areas that draw more people to them in any City.
In Sydney for example the areas that we have had the most success in are Darlinghurst, Surry Hills, Potts Point and immediate surrounds. Occupancy rates in these areas are very very high and they are not as affected by seasonality as in beach side suburbs such Bondi or Manly.
Unique
When airbnb first took off one of the things that caught people’s attention was the ability to stay in unique forms of accommodation; Castles, Tree houses, Yurts, Caves, Igloos etc. Whilst I don’t think that it’s very practical to have an Igloo in Australia there are unique factors we can look for in a property which will make it stand out.
-Unique design, interesting features or colours that stand out.
-Views of the Harbour, City, Mountains, Parks etc.
-Private rooftops (This is killer).
-Private Outdoor entertaining areas.
-Anything that has a cool style or particular and easily identifiable style.
https://www.airbnb.com.au/s/sydney/homes?allow_override%5B%5D=&room_types%5B%5D=Entire%20home%2Fapt
Check out some of the top rated places in Sydney and see how the unique and interesting ones have lots of great reviews. Great reviews = more bookings. These days people love to stay in a place that is “gramable” — nice to instagram.
Cleanliness
Whilst it’s not necessary for the potential place to be new there is a certain level of cleanliness that is expected. Particularly with bathrooms and kitchens. Remember, your property will be run like a small business and reviews are very important. Guests pay particular attention to cleanliness and it’s easier to get these reviews if there is a good baseline of cleanliness to begin with. A fresh coat of paint is always a good idea if a place is looking tired.
Access
It’s very important to consider how a guest will access your space when you are considering buying a place. It’s imperative to have a “self check in” option such as a lockbox, smart lock, or combination lock on the mailbox, which will allow your guests to check in at their leisure. It’s also handy if you need to organise a cleaner or tradesperson and need to give them access remotely. In our company for example we will always do our best to meet and greet your guests and certainly be available if they have a problem but it’s not always possible to met them as they arrive. The main two reasons being that sometimes people are unsure when they are arriving, or they are planning to arrive very late at night. We have thorough automated check in instructions which are sent to every guest and most are comfortable with a self check in option. This has become more widely accepted in the last few years and most travellers are familiar with the process and happy to let themselves in. Just make sure that you have a comprehensive House Manual which answers the common questions for them.
Strata
Whilst apartments have some great appeal in that you can often get great views and sometimes rooftops, they do provide their own challenges. Access (See above) can be problematic in some larger security buildings. As can Strata. It’s important to check with the strata by laws before purchasing to see if providing short stay accommodation is allowed. As such it’s better to go for houses where possible to avoid this complication or smaller blocks of units where there will be less resistance.
That said it is always important to consider your neighbours and how operating this kind of business will effect them. For this reason it is handy to use a professional management service who will be able to monitor your guests and be there if there are any issues.
Size
People often ask, what is the best size place for an Airbnb? The answer is that there isn’t one. Both huge mansions and tiny studios have their place in the market. Look for something that you are happy with and the money generated is mostly relative to the size and location of the place.
Do keep in mind however that more beds = more money. And it doesn’t necessarily have to be more bedrooms. A comfy sofa bed in the living room of a 1 bedroom is quite fine for a lot of guests who are staying for a short while. Being able to sleep 4 people in a 1 bedroom dramatically increases the price you can charge. The same goes with a 2 bedroom apartment which can sleep 6. Keep in mind local laws however which may have a limit on the number of occupants allowed to stay in a single dwelling.
If you keep these 6 handy hints in mind when purchasing a place for Airbnb you will have a much higher chance of success. Of course I would also recommend using a professional Airbnb Management service such as Hey Tom if you are time poor or don’t have easy and quick access to the premises.
Good luck and happy hosting :)
