Airbnb’s are known to be a home away from home for individuals travelling. Whether it be interstate or overseas, Airbnb’s are attractive for tenants as they get to live in a whole house, rather than a small hotel room. In this article, we are going to explore the pros and cons of having an investment property as an Airbnb (also known as a short term rental).
A major advantage that short term renting has over long term renting, is that tenants are required to pay per night.
While traditional long term renting has a weekly fee. Therefore, in theory, short term rentals have the potential to be more profitable. When starting out on platforms such as Airbnb, it’s unlikely that your property will be booked every night. In this case, having a long term tenant that pays weekly fees would be more profitable.
Another advantage of short term rental is that you are collecting income from several tenants on a regular basis.
This can be beneficial as if a tenant cancels their booking last minute, it won’t impact you as much. If a long term tenant missed a payment, you miss out on a whole week’s worth of income.
As each tenant only stays for a few days, you have the flexibility to make use of your property. You can block off particular weekends that you want to use your property for your own holiday, or if you want to do renovations. You’re unable to do this if you have a long-term tenant renting your property. Even if you want to check up on your property, you will need to provide your tenant a considerable amount of time before doing so.
A disadvantage of short term rentals is higher maintenance.
You the owner, need to make sure that the property is looking good 24/7, otherwise risk getting bad reviews on apps such as Airbnb. Good reviews are important on Airbnb, as properties will a better rating are more likely to get booked.
As your tenants are likely on vacation, you need to provide high-quality furniture, décor, appliances and amenities for them.
For long-term tenants, you are not required to provide furniture, so this is an additional cost to you if you choose to make your property a short term rental.
Misuse and damage of your property
Yes, we’ve all heard of the horror stories. In reality, this is a risk we need to keep in mind. You are able to set house rules for your property but there are occasions that they won’t be followed. House parties and bad tenants can cause serious damage to the property, leaving you with the mess to clean up before your next tenant arrives!
To conclude, there are some great advantages of making your investment property a short term rental, such as the potential for better profit. As appealing as the advantages are, there are also many other factors to consider such as higher maintenance, providing a furnished property and the potential misuse and damage of your property.
If you would like to further discuss whether you should make your investment property a short term rental such as an Airbnb, get in touch with the team at Silvertail, and let us assist you with your property journey.