Managing a holiday home or short term renal property can seem like easy returns for light work but the reality can be very different. Here we look at some of the Pros and Cons of managing a holiday home or short-term rental property:
Here is what we find are the Pros in owning and managing a holiday home or short-term rental:
1/ Using the property when you want to. Many of our holiday home owners not only enjoy the returns of letting on the short-term market but they also the enjoy the flexibility of using the property themselves. Some of our owners live overseas and have their own home, furniture and surrounds to enjoy when they visit the country. Another of our owners are spending two years travelling Australia and have their home to return to if they wish to re-connect with family. They arrive to a super clean property and just pick up and go when its time to depart, knowing its is all cared for.
2/ Further to the above, rooms of a home can be locked so if you are precious about a particular space, it can be excluded from space available to guests.
3/Meticulously cared for. Unlike traditional rentals where they may have an annual or bi-annual inspections, short-term rentals generally have a quick turn-around and is spotlessly cleaned each time. If you have a good manager of your holiday home, they would make regular cleans mandatory for longer bookings. Maintenance issues are seen to a a speedy rate as they need to be good for the next guest!
4/Rental returns are higher than traditional rentals. There is a lot to be said about the increased returns of a short-term investment property. Although occupancy may sit around 80-90% annually, this is far out-ways the rental returns.
5/Safety and security; platforms like Airbnb and Stays/HomeAway offer identity and security checks plus hold a bond so if the property is managed correctly you’ll never have an issue with untoward guests.
6/ Unlike traditional rentals which hit an 18 year vacancy rate during the pandemic, the same could not be said for short-term rentals. Travellers stuck in Australia or not wanting to go back to their home lands, people in-between property settlements, people renovating, insurance emergencies and newly weds all still needed short-term accommodation.
7/Further to the above, there is no need for signing of 3, 6 or 12 month leases (and the lengthy documentation and time that is required to set up a lease). As a short-term rental, you can determine your own minimum stays and take immediate bookings.
Some of the Cons in owning and managing a holiday home or short-term rental can be:
1/ Set up costs. Although the returns are certainly worth the set up costs, you do need to consider, soft furnishing, electrical items, linens, towels, provisions etc.
2/ Time in setting up. If transitioning from traditional rental property to short-term rental property, things to consider are if renovations are required, delivery times of furniture and decor items and how to manage this with the exit date of the current long-term tenant.
3/Managing guests. You must have good guest communication skills with understanding of many cultural backgrounds. We find some owners managing their own short-term rentals struggle with any negative feedback as they they tend to feel wounded. A short-term property manager is less emotional and can be an impartial professional.
4/Revenue Management. To be able to maximise your returns you must be all over local events, world events, peak periods etc. and revenue must be managed regularly. It is not a set and forget price like traditional rentals.
5/Managing Cleaners. The clean of the property is probably the most important aspect of the guest experience. It can be challenging for inexperienced novices to find and manage cleaners and relate expectations and requirements to ensure positive reviews.
For further information on how we can assist you with the management of your holiday home or short-term rental property, please CONTACT US