Airbnb is the latest trend to enter the property market – but is it the best option for your Wellington investment property?
Will Airbnb Increase My Income?
Possibly. Depending on the area you may be able to earn more from nightly stays using Airbnb than from a weekly rent. But remember Airbnb guests usually don’t stay for very long, which could result in you dealing with frequent vacancy periods (especially during the winter), possibly causing the income from your investment to decline.
Keep in mind that as an Airbnb host you will have more expenses since you won’t have tenants to foot the utility bills. You will be required to pay the internet, electricity, housekeeping and other expenses.
Will It Suit My Management Style?
This depends on how hands-on you want to be when it comes to managing your investment property. If you want your investment to be a passive secondary income then Airbnb is probably not for you. These days people have high expectations when it comes to temporary accommodation, meaning Airbnb guests usually requires a lot more management than tenants do. As owner you would need to deal with emails and calls daily to keep your property vacated, plus clean the property after each stay, replenish the towels and conduct any other duties required to maintain high ratings and reviews on your Airbnb host profile.
What About Insurance?
With so many people coming in and out of your investment property you will likely need a more comprehensive insurance policy. Before making the change, ensure you consult your insurance provider as many find their policy must be adjusted to ensure the policy remains valid for any future claim.
What About The Body Corp Rules?
If your property is part of a body corporate, check the rules as these may prohibit letting the property to short-term guests. We know of situations where the body corporate has prevented Airbnb letting.
How Do I Screen Tenants On Airbnb?
When you’re a landlord you can credit check, reference check, search criminal history and meet the candidate in person before accepting them as a tenant. On Airbnb the only way to screen guests is through reviews left by other hosts, and even then not all guests have reviews as they are new to the website. Most of your Airbnb guests will generally be lovely and considerate, however with so many guests coming in and out of your Wellington property there is an increased risk that a few bad guests will slip in and cause an overload of stress on yourself and your property.
If you have time then Airbnb could be a great option for you to earn more money. However keep in mind that being an Airbnb host is very much an active income – you will be part of the hospitality industry, creating bookings regularly to fill your rooms, tending to your guests to give them a great customer experience in hopes of getting great ratings and reviews that will encourage other Airbnb users to visit your property for a night or two.