Property Management Tips

When it comes to rental real estate, passive income is one of the most attractive benefits. The idea is to purchase a home and rent it out. Of course, some properties require fixing and furnishing first before you can earn from them. Once you are through with the improvement process, it is time to look for a tenant.

Any homeowner (or landlord) has one critical mission: to find a tenant who will stay in the property for the long-term. The only time you will have to do anything is when the tenant leaves. Having a long-term tenant will give you a lot of free time, unless when a problem crops up. Nevertheless, it is a hassle-free investment, especially if you already have a property manager taking care of the rental.

This procedure does not apply to short-term rentals or BnBs. As the name implies, BnBs mostly operate like bed and breakfasts. You are in the same industry as with hotels, motels, and inns. The hospitality industry is a huge challenge and being a BnB host is more than just earning a passive income.

In fact, you cannot just wait for the monthly rental payments. Since the accommodation you offer is only short-term, the guest turnover is fast. Then, you have to clean up after each guest and take care of the next. It is exhausting and a lot of work. But why are more and more people opting for BnB over long-term rentals?

Pros and Cons of the investment

In 2010, a survey stated that only one in 10 people chose short-term rental during their trip. However, five years later, this number rapidly grew to one in four holidaymakers. The most recent data showed that seven out of 10 millennials choose BnBs with local hosts.

Holiday rentals are becoming more popular over recent years, and it is easy to see why. If you plan on being a part of this sector, you can gain from the following advantages:

  • People love staying at short-term rentals.

    The word is out, and numbers do not lie. According to a study, short-term rentals are much cheaper, compared to famous hotels. Travellers can save up to 39% on accommodation, which is why they would pick BnBs over hotels in a heartbeat.

  • Short-term rentals offer more comfort.

    When travellers stay in a hotel, it means they are confined to one room. There may be useful amenities around, but they have to share these facilities with other guests. While it may not be a problem for most people, others prefer to have the whole space all to themselves.

    BnBs allow guests to spread out if there are multiple rooms. Some properties only have one or two bedrooms, making them even more attractive to guests. People want privacy, which is not something they can get out of a hotel.

  • BnBs function like a home.

    Short-term rentals are actually houses of the owners who may not often use the property due to specific reasons. In this case, they have some of the essentials of a real home, including a fully functional kitchen and a private pool.

  • Your kids will love staying in this type of accommodation.

    Young kids do not like hotels. Imagine staying in one or two rooms for at least one night. Adults already feel frustrated about the situation, but kids feel much worse. They are unwelcome in many areas of the hotel as well. Parents usually end up staying with them overnight without enjoying the city. It is difficult to maintain their attention, so you need to find ways to entertain them.

    When you are at a hotel, you have to be careful about not disturbing the other guests. With BnBs, you can freely let your kids play without worrying about the neighbours. Plus, it is safe because they remain inside a gated home.

  • Pet lovers love BnB rentals.

    How many hotels allow pets to stay with their owners? Unfortunately, many hotels have pet restrictions, whether you have a small or large dog or even a cat. With short-term rentals, you usually do not have to be concerned about leaving your pets behind. Most BnBs accept guests who bring their pets along, and you can even let them stay in the same bedroom.

    With hotels, you will most probably have to hire a pet sitter or even book a kennel. Both services are expensive, especially if you are travelling on a budget.

More than anything, you want to know the advantages of owning a short-term rental. There are many great reasons why you should test the waters:

  • BnBs are flexible. You get to choose when to rent the property out and when to take the listing off. You select the specific days, weeks, months, or just about any time throughout the year to open the rental. You can even limit your home’s availability during the holidays. Whenever there is an opportunity to travel, you can have your house rented out. This way, you earn money, even when you are far away.
  • Families often prefer short-term leases over hotels. You can earn more since you can usually have at least three guests – unlike hotels, which are the top option of singles.
  • You get more cash when you opt for short-term rental. One of the most significant advantages of BnBs is that they offer tremendous earning capabilities. Think about it: your one-week vacation rental can cost $1,200 per night compared to $1,500 per month.
  • Unlike with long-term rentals, you may not face problems concerning wear and tear of your property. A big problem with traditional leasing is that the home ends up with a lot of damage. Even if you find out about it early and you get rid of your tenant, you still need to have the property repaired. In short-term renting, you can quickly spot little issues, which you can fix before they become more significant.

The benefits above say it all, BnBs are an excellent investment. However, it does not mean they are perfect. They also have disadvantages that you should know about:

  • Consistency in earnings is not always possible. If you want a steady income, BnB hosting is not for you. There will be times when people will not book your property. It can take a few months before your home gets the attention it deserves again. Also, you may not be interested in leasing your home regularly. If stability is what you seek, yearly renting may be a better option.
  • You need to pay the bills. Your guests will only stay overnight up to a few days. Therefore, you cannot tell them to pay the bills for you. As the homeowner, it is still your responsibility to pay for your phone, cable subscription, and power bills, among others.
  • Short-term rentals can be quite risky. While you can say that both long and short-term renting carry a bit of a risk, the latter is perhaps less safe. You will face more people than when you have a long-term tenant. BnBs have a high volume of people passing through their doors. It is why there is an increased number of breakage and theft.
  • You need to be involved. One of your jobs is to become the innkeeper, which means you need to collect payments and do a lot of other duties. You also have to schedule the renters and find your next guests – while you are still taking care of the current ones. You should make sure that the yard and the whole house will stay clean.

Weighing the pros and cons above will help you choose the right decision. If you think about it though, the positives heavily outweigh the negatives. With extra careful planning and some guidance, you will know why this venture is worth the effort.

bnb short term property investment

The Short-Term Rental Financial Payback

One of the reasons why many people are starting to invest in BnB or short-term rental is the financial return. In reality, real estate is an industry that has always provided winning investment payback. Whether you turn to it as your full-time job or a supplementary income, you can gain attractive revenue. Of course, you need to know what to do to unlock its full potential.

When it comes to BnB, you have to be incredibly wise. Like any investment, you should do some research first before venturing into this complex world. When done right, you can earn a lot from just renting out your property for a few days. However, it can also turn into a disaster if you are a clueless beginner – or even a lazy experienced host.

Platforms, such as Airbnb, have changed the way travellers choose their accommodation since the late 2000s. They have helped homeowners become hoteliers. Their homes turn into a mini-hotel where guests are allowed to stay overnight. Some homeowners choose to rent out rooms individually while others let guests take over the whole house.

According to Airbnb, they had more than 160 million guests in over three million listings, which were from 190 countries worldwide.

However, your primary concern is about the earnings of the other hosts. This way, you can calculate and determine whether or not this business is right for you. A statistics website stated that Airbnb hosts could earn more than $1,370 monthly. This figure confirms that the hosts do receive more than other workers from general task-service platforms.

Additionally, the amount above is only the average. There are some hosts with earnings racking up to $14,800+ monthly. Others, however, only receive $200. It all depends on the host, schedule, and other factors.

The discrepancies may appear wild, but even so, almost 50% of Airbnb hosts earn more than $500 every month. The question now is: will you make as much, if not more, than these hosts?

The answer depends on many factors, including the location. How do you know when the city or neighbourhood is ripe for BnB investment?

Here are some questions that will help you out:

  • Is the location appealing to tourists?

    Find out as much as you can about the area first before you purchase any property. Determine if the city allows easy access to attractions and public transportation. There should also be some shops and restaurants in the location. Tourism should be consistently active throughout the year.

    However, you should also remember that other investors will be eyeing the area just like you. It means fierce competition, so you need to give travellers reasons why they should pick you over the other options.

  • Is the cost of living high in that area?

    When buying a property, you do not just want to break even. Your goal is to earn more than what you invested in the house. This way, your rental property will give you more returns. Find out the cost of living, such as the average rent price in rural, urban, and suburban areas. You should also know the property taxes and fees, along with the average cost of utilities. These numbers will allow you to decide on how you should price the rental smartly.

  • What is your target market?

    One of the things that many beginners in BnB forget is their target market. Although it is tempting to accept any traveller into your home, it always helps when you have a specific audience. For instance, millennials are currently the biggest drivers of the economy. They not only make up a large segment in Australia, but many industries have evolved to accommodate their demands.

    The same applies to the hospitality industry, including short-term renting. According to a survey, seven out of 10 millennials prefer rentals that locals own. About 40% of them want to stay in a place that they see as quirky, so it adds to the uniqueness of their travel experience.

    Therefore, if your target audience involves millennials, you may want to consider these numbers.

The answer depends on many factors, including the location. How do you know when the city or neighbourhood is ripe for BnB investment?

Here are some questions that will help you out:

  • Is the location appealing to tourists?

    Find out as much as you can about the area first before you purchase any property. Determine if the city allows easy access to attractions and public transportation. There should also be some shops and restaurants in the location. Tourism should be consistently active throughout the year.

    However, you should also remember that other investors will be eyeing the area just like you. It means fierce competition, so you need to give travellers reasons why they should pick you over the other options.

  • Is the cost of living high in that area?

    When buying a property, you do not just want to break even. Your goal is to earn more than what you invested in the house. This way, your rental property will give you more returns. Find out the cost of living, such as the average rent price in rural, urban, and suburban areas. You should also know the property taxes and fees, along with the average cost of utilities. These numbers will allow you to decide on how you should price the rental smartly.

  • What is your target market?

    One of the things that many beginners in BnB forget is their target market. Although it is tempting to accept any traveller into your home, it always helps when you have a specific audience. For instance, millennials are currently the biggest drivers of the economy. They not only make up a large segment in Australia, but many industries have evolved to accommodate their demands.

    The same applies to the hospitality industry, including short-term renting. According to a survey, seven out of 10 millennials prefer rentals that locals own. About 40% of them want to stay in a place that they see as quirky, so it adds to the uniqueness of their travel experience.

    Therefore, if your target audience involves millennials, you may want to consider these numbers.

Aside from the tips above, you should also find ways to increase efficiency. One way to achieve such a goal is through the use of artificial intelligence and technology. After all, you will depend on technology to connect with your guests.

It can become quite frustrating and daunting, however. You may need to be skilled in using these pieces of software. The good news is that you can turn to a property manager who will take care of not only the technological facet but also the entire aspect of renting out your property.

welcome for a bnb property

Using Property Management Services

Most BnB hosts do not have all the time in the world to perform their duties. They have families and even a full-time job, which can make it difficult to juggle between responsibilities. A property manager is the answer. You do not have to say goodbye to your dreams of becoming a short-term rental property mogul. You just need guidance and assistance from the right people.

What does a property manager do? The answer is everything that you should do as a host – and more!

With property management services, you can delegate all your tasks as a host, which include the following:

  • Guest Communication

    At the start of your venture, it is not too difficult to talk to guests. You simply answer their enquiries about your property, including the price, location, and many other things. You may even be happy whenever you receive these questions.

    However, it is not always fun when you keep getting the same enquiries. Some would even ask you about things that you have already specified in your listing. You can easily run out of patience, especially when you answered all the questions, but the person did not even book your property. You ended up wasting your time, and you need to start over again.

    The good news is that a property manager will handle all the enquiries for you. Surveys show that an average traveller would often pick about eight properties. However, they would only talk to five of the options before booking. In this case, it is essential to reply to their queries. The faster your response is, the better the chances of them booking your rental.

    The property manager will make sure to take care of all the questions while you can go on with your regular routine.

  • Reviews

    Reviews are critical to the success of your rental. You can grow your number of guests if your past customers talk about your property positively. Unfortunately, 80% of guests are not fond of leaving reviews.

    One way to break the chain is by giving your clients feedback first. Your property manager, having serviced them, can provide the customer review for you.

  • Cleaning and Maintenance

    Perhaps the biggest benefit of hiring a project manager is that you do not have to worry about repairs and maintenance. Cleaning after each guest is necessary, but you may be busy that you wind up forgetting about it. The property manager will take care of cleaning, repairs, and maintenance, so you do not have to.

  • Listing

    Posting one listing on Airbnb is not enough. You should advertise your property everywhere, including on Facebook, Twitter, and other social media platforms.

If you are ready to start with a short-term rental, give Your SuperHost a call today!

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Author

Angie Suthers

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