— Property

Pros and Cons of Renting Out Your Investment as an Airbnb

2 Mins read

Over the last few years, Airbnb has become an increasingly popular way for property owners to rent out their homes.

Higher Yields

If you rent your home out traditionally, most properties would generate somewhere between 2 and 5% in rental yield.  To find Australia’s highest-yielding suburbs, please click here to download our latest report pack.

While this is more than acceptable for many, for those prepared to put in some more work, it’s possible to double or even triple those figures by renting out your property as short-term accommodation on Airbnb. This potential for higher income is the main reason most people consider renting their homes on a short-term basis.

Access to Your Property

An often-overlooked advantage of Airbnb is that you can still maintain access to your property should you need it for periods of the year. Short-term rental platforms allow you to choose when your parcel is available and enable you to use the property as desired without having to remove a tenant or arrange furniture on short notice.

This flexibility is a great way to either make the most of a vacant property for a certain period of the year or even make some money on a property that you are still living in.

Maintaining Your Property

While we sometimes see stories of houses being wrecked after an Airbnb party, it’s fair to say that they are the exception, not the norm. While there are some risks to renting out your property, the flip side is that they also exist with long-term tenants as well.

Given that the cost to renters includes a cleaning fee, you can keep your property neat all year round, given the short-term nature of the renters.

You’re also able to keep an eye on the property and manage things like gardens and ongoing maintenance more closely than a formal rental agreement.   Learn more about the costs of maintaining an investment property here.

Cons

Time

While you can make more money renting out your property on a short-term basis, there are some cons to the process, such as time spent organizing the process.

To run a successful Airbnb property, you will have to manage bookings, clean the property, and deal with any problems that may arise. It’s also worth remembering that on top of cleaning the house, you will also need someone to wash bedding and towels as well.

As a result, this type of income is far from passive compared to having long-term tenants and a property manager.

While you can hire third parties to manage all elements of your short-term rental, they also charge higher property management fees, given the increased workload. This is typically around 20% of rental income, which is far higher than the cost of traditional property management.

Costs

The other big difference with longer-term renting is that there can be higher costs involved. As mentioned, you can hire a property manager to take care of many elements of the day-to-day running of the property, but you also have to factor in the platform fees that Airbnb and others charge.

You will also have to factor in the cost of properly setting up a property, including furniture and appliances, TVs, and even things like tea and coffee.

Another cost that is often overlooked is that you are responsible for paying all of the utility bills when running a short-term rental, which the tenant would usually pay.

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About author
Tristan McCue is a 26-year-old junior programmer who enjoys reading, binge-watching boxed sets, and appearing in the background on TV. He is smart and friendly, but can also be very evil and a bit lazy.He is an Australian Christian. He has a post-graduate degree in computing.
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