Hi,
Just hoping to get some ideas with regards to getting an apartment in the Melb CBD and renting it out as an ABnB. We live some distance out of the city and thus want to have something that is basically self managing in terms i.e. hiring a cleaning company who ensures the place is clean and stocked up as required.Would this be a worthwhile venture? I would like to get enough income from the Abnb to cover most of the cost of the investment.
Are there businesses in Melbourne who take care of aBnB? I am guessing there must be a market for this?
Look forward to some discussion on this.
AirBnB can work out well.
Only problem is that banks won’t take into account the income generated from an Air BnB property unless you can show a year or two of tax returns. With a normal rental – they only need to see the most recent rental statement or a rental appraisal from a local property manager.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
An important question to consider is the lack of certainty versus having a lease agreement. Would the AirBnB rate compensate for the risk? I would suspect probably not after you factor in all the costs. Cheers
Hi Ravi,
Renting an apartment via Airbnb and other short term booking websites is definitely a worthwhile venture.
Unfortunately we only manage short term rentals in Sydney at the moment, however, for the properties we have managed on behalf of property investors, we’ve managed to secure at least a 40% higher rental income from short term guests compared to long term tenants.
A key consideration in renting an apartment on Airbnb is to ensure you have adequate provisions to manage the guests. As hospitality is fundamental when hosting guests through it, which is where a property manager like us (MadeComfy) can assist, as we specialise in Airbnb property management.
Happy to assist anyone looking at renting their apartment on Airbnb as an option in Sydney and discuss the returns/yields we estimate to deliver.
Regards,
TimTim | MadeComfy
http://madecomfy.com.au
Email Me | Phone MeHi Ravi,
I’ve been thinking of this too. For the initial purchase from the bank I would get a rental evaluation from an agent to satisfy the bank requirement.
For further property purchases, it would be difficult to prove income from the 1st property, so you may want to guarantor it in a Company name and then you can show company earnings over the period of 1 or 2 years in a profit and loss statement to prove viability of the venture. Keep in mind you would lose any CGT discounts on future sale of the property under a company name and everything would get taxed at a flat 30% without clever accounting. Something to consider though.
There are management companies out there. The cheapest I’ve seen charges something like 20%, sorry I don’t remember the name, but looking around that seems to be the minimum you would pay for key management and cleaning.
Also check out State, Council and Strata restrictions on Airbnb and short term lets in general in any area you buy. Many people don’t bother to check and do it anyway, but there have been cases of people getting caught out. At the moment it’s a new investment vehicle and still quite a minefield! Don’t be deterred though, usually the regulations haven’t caught up with the technology, but there’s a risk they might.
Cheers,
Matt
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