When it comes to your property asset, you want to know that you are pursuing the right route to high returns. For many Australians, this has traditionally been through long-term leasing but with the rise of popular travel sites Airbnb, more are now opting for a short-term accommodation solution which allows you to flex your rate in peak seasons, and avoid the property management fees that can chew into hard-earned rental returns. At Quickstay, one of the most common questions we are asked is whether short-stay delivers better returns than longer-term options.
Let’s take a look at the figures
A property owner in our Quickstay portfolio had a stunning St Kilda apartment that wasn’t attracting the rental yields that it should have for the location and style of residence. After another tenant moved out, they decided to test the waters with AirBnB. After a 12 month period, their beachside accommodation was scarcely unoccupied with a staggering 35% return uplift, which equates to an additional $5,000. Not surprisingly, they have been blown away by these results and have enjoyed the hands-free approach that Quickstay’s short-term accommodation management affords.
Here are where the numbers landed:
|TRADITIONAL RENT||QUICKSTAY MANAGEMENT|
|Weekly Rent: $350||Average Nightly Rate: $114|
|Management Fee: 7%||Occupancy Rate: 71%|
|Marketing/Admin Fees: $400||Yearly Return: $29,543|
|Yearly Fee: $3,249||Airbnb Fee: $2,068|
|Return After Fees: $14,951||Return After Fees: $20,216|
|AVERAGE NIGHTLY RATE: $41||AVERAGE NIGHTLY RATE: $54|
It’s natural to have reservations about short stay management, as the share community is a relatively new concept for property investors. The truth is, Airbnb, Booking.com, HomeAway and TripAdvisor offer a saturating coverage over the holiday market, world-wide. Where a renter may not be looking to put down long-term roots, a holidaymaker may find an area more appealing to enjoy their short-stay escape. Quickstay manages your visibility on all of these platforms, ensuring that you are represented in the best light to a wider group of bookers across the world, whereas long-term leasing options would just focus on Australian booking sites to secure residential tenants
Minimal set-up cost for maximum return
Preparing a property for renters comes with a range of unseen costs. Short-term accommodation still requires an effort on the property owners’ part, but these furnishings and fittings will serve a different market that is looking to immerse themselves in a community and city for a short space of time. Therefore, structural work and spend isn’t often required.
A South Yarra property owner previously had their investment with a local real estate agent yet struggled for 8 weeks to get a tenant because there were 200 similar properties in the area also available for rent. They contacted Quickstay to open their property up to the holiday rental market and after 12 months of having their property managed by Quickstay, they haven’t looked back (apart from wishing they’d contacted Quickstay much earlier)! With a small investment of $3,000, this property owner was able to refresh her 1 bedroom apartment with a contemporary look and feel that attracted a monthly rental income of $2,300 versus $1,600 previously. That’s an attractive 43% uplift.
There are many more stories like these in markets across Australia, with property owners afforded the luxury of high occupancy and full-service management from our Quickstay specialists. Short-stay may not be the best solution for all investments. But if you aren’t sure whether a short or long-stay solution is best for your asset, get in touch today and we can walk through your unique circumstances.