Short-term rentals strongly attract many investors: they can bring in higher income than traditional rental properties, while leaving the properties free for personal use such as holiday homes or weekend retreats. With 2019 now behind us and 2020 underway, Tom Goodwin of Your Investment Property, spoke to Quirin Schwaighofer, co-CEO of MadeComfy, who points to both Brisbane and the Gold Coast as very solid markets for short-term rentals . Both benefiting from the strong demand from international tourism and national visitors.
"For example, we have seen an increase in demand for accommodation in terms of the number of nights booked in Brisbane by more than 33% year-on-year compared to November 2017," says Schwaighofer. "We expect the growth trend to continue during this peak season due to the weak Australian dollar."
The Gold Coast presents a number of opportunities for sophisticated investors, notes Schwaighofer. It has always been a popular tourist destination for international and international visitors, and this demand means that finding quality accommodation during the peak summer season can be difficult for vacationers. Join these theme parks and the proximity to other attractions, and it's clear why it's such an attractive destination for so many different demographics.
"We are seeing strong demand for different types of properties in the short-term rental market, from apartments to houses located near the CBD or tourist attractions," says Schwaighofer.
"We really see ourselves as facilitating these broader industry trends by providing an end-to-end property management service"
The best performance came from hot spots in the Gold Coast regions around Surfers Paradise, Main Beach and Broadbeach. It's a trend you'd expect to see, given the area's popularity for beach-based activities.
"That said, anything near water will always be very attractive to customers," says Schwaighofer. "It is hot for most of the year, which means that there is still potential for beach holidaymakers, even outside of the traditional summer beach season."
Although the allure of the Gold Coast may seem more immediate, that doesn't mean that Brisbane should be overlooked; in fact, it is Airbnb's third market in Australia. The city’s infrastructure, its reputation as a business hub, the increased focus on cultural events, and the easy-to-use public transportation system make it an attractive destination for business and leisure travelers. Combine that with the fact that it's only an hour from the Gold Coast, and it's easy to see why so many tourists choose to go for a two-for-one trip.
"South Brisbane is by far the best performer, while CBD and properties in and around Fortitude Valley, New Farm, Kangaroo Point and Bulimba also have very high demand for short-term accommodation "says Schwaighofer.
Going beyond the sleepover mentality
Of course, choosing to move into a short-term rental space means being well prepared and having the right tools on hand. In broader Australian trends, it is clear that the short-term rental market is maturing. As a result, there has been a shift towards customers who expect a higher standard of accommodation and hospitality. Many properties now have a presentation closer to a hotel or serviced apartment than the "sleepover" approach that was originally associated with the industry.
"Airbnb's budget and shared home sector is still strong, but the fastest growing segments come from travelers who would traditionally stay in commercial hotels and seek to book a brand like MadeComfy instead to stay with individuals, "says Schwaighofer.
He suggests that clients traveling for work or business and older travelers are demographics who do not want to compromise on equipment or cleanliness to save a few dollars. It's a high-end market in an industry that tends to be associated with budget travel – but Schwaighofer notes that it's up to landowners to step up their game if they wish to continue operating in this space.
"The short-term rental market is adapting to meet these needs, but we know that many landlords find it difficult to maintain consistently high standards, which is why they end up getting turn to us for help, "he says.
Along with these changing trends – and probably influenced by them – the industry is also facing increasing regulation. For example, the NSW government is currently planning to introduce a number of space reforms, such as a code of conduct, a cap on nights that can be reserved for short term rentals and a property registrar .
"Anything near water will always be very attractive to guests"
Although the owners have raised a number of concerns regarding these proposed reforms, much of this regulation is likely to be positive for the market as a whole. Schwaighofer believes this will help reduce negative behavior on the part of both the owner and the client, making short-term rentals safer and increasing consumer confidence that they will get what they paid for. Similar trends are expected to follow globally; for example, Airbnb is currently working to verify all of its worldwide listings by the end of 2020, to ensure that the properties are accurately described.
"We really see ourselves as facilitating these broader industry trends by providing an end-to-end property management service," says Schwaighofer. Having managed several hundred investment properties, MadeComfy has extensive experience in the details of the methods that will work best for types of individual properties in particular locations.
"We tend to get the best results when we process everything ourselves and package it under the brand MadeComfy, which stands for quality, consistency and our" wow "factor. We set up the property, manage reservations, set up a tailor-made pricing strategy, take professional photos and manage everything in operations, ”says Schwaighofer. "This gives our customers the best chance of maximizing the potential of their returns, as well as eliminating all the hassles of running a property."
Schwaighofer indicates a property in Broadbeach on the Gold Coast with which MadeComfy works as an example. One bedroom apartment just two minutes walk from the beach, it was already ideally placed for vacationers. Take into account the surrounding dining, beverage and shopping options, and it was a success waiting to happen. But the X factor was missing until MadeComfy stepped in and took over professional photography, dynamic pricing and marketing the property on Airbnb. Within a few months, the property had a high occupancy rate of over 77% and saw an incredible 29% increase in net returns.
"The property is now generating higher rental income than ever, and the owner is delighted," says Schwaighofer.
Although MadeComfy does not manage properties on a temporary basis, owners still have the option to reserve dates if they wish to stay on their own property. These types of arrangements can be made via the company's online platform – the MadeComfy dashboard – which also allows users to track the performance of their properties from a variety of ; devices online anytime.
"We also help open your property to a wider audience," says Schwaighofer. "In addition to receiving solid reservations via Airbnb, we have an increasing number of customers reserving a" MadeComfy ", whether as returning guests or companies who have discovered the value that MadeComfy offers to their traveling employees. "
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