By far, this is the most common question we are asked & with good reason! The answer to this question depends on your investment property…namely;
- Features (number of bedrooms, bathrooms, appliances, air-conditioning, car parking)
- Furnishings (interior design + quality of furniture, extra touches to make it stylish)
A recent article by AirDNA, revealed that the more expensive the property, the lower the return on investment. Although this article is using American Cities for its analysis, it can give an idea into Australian cities. Again, Location, Features & Furnishings are a major factor, regardless of the size of your mortgage, as these directly contribute to your income via Airbnb + Booking.com. Earlier this year, we (SleepOver Brisbane) started managing a property in Holland Park West & at first, I was reluctant to take on a property which would have lower nightly price + did not expect the demand for the area would be as great as inner city suburbs.
Happily, I was wrong
The amount of effort required to managing a property is the same, whether it is a 1-bedroom apartment in New Farm, a 4-bedroom house in Ascot or a 2 bedroom in Holland Park West…. sure, the cleaning is more, but the communication + guest contact / requirements are the same. As AirDNA found, less suspecting suburbs can be the ones that make the most profit. Holland Park West is one of these gems.
The first month (April) on Airbnb saw occupancy at 97%, with an average of 86% up until September. The average nightly fee is $97.50. Realestate.com reports the average 2-bedroom apartment in Holland Park West is $363. The maths are…. Airbnb = $682.50 p/week Lease = $363 (this apartment would be more likely $330-$350) Almost double! When you are considering moving your investment property to Short Term Rental, you also need to factor in the setup cost + ongoing costs (electricity, water + internet). Saying this & using Holland Park West for this Case Study, your water, electricity + internet will not be $350 per week… more like $100. So gross revenue will be approximately $250 p/week or $13,000 per annum. Not enough to retire on, but certainly will help pay off your mortgage faster or use the income to buy another! Note* This Case Study has involved using SleepOver Brisbane, to furnish + setup the property & ongoing management. Holland Park West has 25 reviews, with a 100% 5* rating.
The missing element to making money via Airbnb is….
- Get us to look after it for you!