Airbnb - Can it be a Viable Income Alternative?
17 October 2018
Learn the Pro's and Con's of Airbnb - Is it right for your Investment Strategy?
Like many industry disruptors, the Air Bnb platform’s success lies in the ability of the masses to utilize the software - this case utilising living space that would otherwise sit empty.
Whilst the initial inspiration back in 2007 of a couple of mates in San Francisco, was to offer a spare room or floor space for people to stay as a cheap alternative to hotel accommodation, that simple idea has grown into the $31 billion behemoth that it is today.
The up side is that for many budding entrepreneurs, the ability to turn their spare room into a supplementary income source, or their investment properties into the base for a small business venture, has fueled the rapid expansion of this emerging industry.
Running one or maybe two listings, just about pulls up most hosts in the market. The time and money it takes, to set up and manage the listings, including cleaning, dealing with guests and directing guests in an increasingly competitive market to your listing can be over whelming for some.
There are solutions these days for all kinds of problems, and there is one for Air bnb management.
There are a number of Air bnb Management companies that will take on your property and run the listing on the short term listings platforms on your behalf.
One noticeable feature of these business’ is how tech focused they are. Most have developed their own algorithms to “skim” the hosting web sites so their properties rank well and remain at the top of the search list – similar to a google ranking. They hire their own stylists, to furnish and stage the properties, property management, cleaning staff and maintenance contractors. With scale come efficiencies, savings and dedicated service.
The limitation of these managers is that the more prevalent to be mainly CBD centric, there are other smaller management companies that look after outer suburbs and regional areas, however, they run on more traditional business models.
There is a movement to blend the short term management service with that of a traditional property manager and have the short term management relationship seen a viable alternative to long term leasing in the traditional market.
The returns can be very good, although the cash flow may be less regular. As always there is a flight to quality, with the good properties always in demand, regardless of the season or management style.
If you are looking at property investment and Air BnB as an income option, as always do your research and consider making it a viable, sustainable investment on a worse case scenario. It’s not all blue sky with Air BnB, although if done correctly there is a lot of opportunity if you are willing to put in the effort.
If you would like any more information on Air BnB or other income alternatives feel free to get in get in touch
Happy Investing.
