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How to Airbnb your property

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Always dreamed of having a successful side hustle? Have you considered joining the thousands of Aussies who are listing their properties on Airbnb and pulling in extra coin?

With Australia reopening its borders to international tourism and more and more Aussies beginning to explore the country again, now could be a good time to consider getting into the short-term holiday rental market.

Let’s look at some of the benefits of hosting on Airbnb:

  • Earn extra money
  • Be your own boss
  • Get creative with your property or space
  • Meet interesting people from around the globe.

So, how do you get started? Here are some tips.

1. Do your research

A good place to start is to do some research to see what’s available in your area and what kinds of properties are in demand. Is your property going to be desirable?

You should also check whether you can legally host on Airbnb. Some municipalities may have laws restricting short-term holiday rentals. In some cases, you may need to register, apply for a permit or obtain a licence before you list.

There could also be body corporate bylaws to consider and safety regulations to comply with

2. Work through the finer details

Operating an Airbnb takes time, so it’s important to consider how much time you’re willing to invest. Are you going to clean the property, organise check-ins and check-outs, and respond to customer service queries or have someone else handle things for you?

Next, crunch the numbers. Your property’s location, size and amenities will impact how much you can earn, as will seasonal considerations. Do some research into what similar properties are listing for.

Consider the costs you may incur. Examples include:

  • Booking platform fees
  • Cleaning
  • Rates
  • Electricity
  • Furniture
  • Gas
  • Internet
  • Maintenance
  • Streaming services
  • Water
  • Insurance
  • Management fees

Lastly, don’t forget to check the tax implications with the ATO or your accountant.

3. Make your property shine

Now comes the fun part – decorating your room or property.

If it’s your home, remove as much personal clutter as you can. Guests will be looking for a clean, fresh space that feels like an escape. You may need to place your personal belongings in storage or at a friend’s place.

A popular design approach is to match the interior décor to the property’s surroundings. If it’s a beachside property, for example, you could go with a beachy theme. If it’s close to a forest, you may choose wooden, natural furnishings.

Another tip: creating an experience that’s different or unique will help boost your property’s appeal. Think themed styling or out-of-the-box types of properties (if you’re buying).

4. Go for quality marketing

First impressions count, so you’ll want the photos on the listing to really ‘pop’.

Ensure everything looks clean, tidy and organised. If your space has natural light, make the most of it and highlight any unique aspects of the space that could resonate with guests.

If you’re serious about turning your Airbnb into a successful side hustle, you may like to consider investing in professional photography. High-quality photos can make a world of difference to how people first perceive your property and ultimately how in-demand it will be.

When it comes to the description, be specific. Sell any unique characteristics that make your property special.

5. Pay attention to the overall experience

Your property will be your guests’ home away from home, so it’s important to make them feel welcome.

It all starts with getting the check-in experience right. Make sure the directions are clear, and the process is effortless.

Next, don’t skimp on the amenities and personal touches. Quality towels, fresh soap, tea and coffee and a city guide can all help get you closer to a five-star review.

If you do get a bad review, reply promptly and courteously.

6. Protect your property

Airbnb provides host liability insurance, which covers you up to a certain amount if a guest gets hurt or their belongings damaged/stolen while at your place.

Ready to get started?

If you’re ready to buy a property and turn it into an Airbnb, we’re here to help.

We can provide free property and area reports to help inform your purchase decision and line you up with the right finance to reach your goals. Get in touch today!

Property Market Update – March 2022

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Autumn has arrived and what a wonderful time of year to turn over a new leaf with a property purchase.

While national housing values are generally rising, the pace of growth has trended downwards since April last year, according to CoreLogic figures. CoreLogic Director of Research, Tim Lawless, said every capital city and broad ‘rest of state’ region was now recording a slowing trend in value growth, albeit with significant diversity.

If you do happen to come across a bargain, you’ll want to be able to jump on it pronto. Speak to us about pre-approval on your finance today.

Interest rate news

At its March meeting, the Reserve Bank of Australia (RBA) decided to keep the cash rate on hold at the historically low level of 0.10%.

RBA Governor, Philip Lowe, said while the global economy was continuing to recover from the pandemic, the war in Ukraine was a major new source of uncertainty.

He said inflation had picked up quicker than expected, but the Board wouldn’t increase the cash rate until actual inflation was sustainably within the 2 to 3% target range.

There’s still speculation a rate rise could come in the second half of 2022 and banks have been lifting fixed mortgage rates for months, so now is the time to ensure you’re getting a competitive deal.

Home value movements

National housing values crept up 0.6% in February – the lowest monthly growth reading since October 2020.

Sydney recorded its first decline in housing values since September 2020 (-0.1%), while Melbourne housing values were flat (0%) over the month.

Brisbane (1.8%) and Adelaide (1.5%) saw the strongest growth in dwelling values in February. Brisbane property values could see a drop this month due to the recent floods, but property analysts are expecting the market to recover quickly.

Meanwhile, regional Australia continues to record a substantially higher rate of growth than the capital cities. In February, dwelling values increased across the combined regionals by 1.6%, according to CoreLogic figures.

“Sydney and Melbourne have shown the sharpest slowdown,” CoreLogic’s Research Director Tim Lawless said.

“Conditions are easing less noticeably across the smaller capitals, especially Brisbane, Adelaide and Hobart, where housing values rose by more than 1% in February.

“Similarly, regional markets have been somewhat insulated to slowing growth conditions, with five of the six rest-of-state regions continuing to record monthly gains in excess of 1.2%.”

All dwellingsAuctionsClearance ratePrivate saleMonthly home value change
VIC101582%1420▲ 0.01%
NSW70591%1600▼ – 0.10%
ACT11288%83▲ 0.43%
QLD15371%1451▲ 1.96%
WA367%782▲ 0.25%
NT3100%28▲ 0.44%
TAS00%200▲ 1.20%
SA11894%400▲ 1.53%
* Monthly Home Values figures as of 28 February, 2022
* Australian auction results, clearance rates and recent sales for the week ending 27 February, 2022.
* The clearance rate is preliminary and current as of 4:30 pm AEDT, 2 March, 2022.

Ready for an autumn property purchase? Get in touch and we’ll help you find the right finance for your needs.

 

Additional sources
CoreLogic RP Data Daily Home Value Index: Monthly Values

Lending and Property Update – March 2022

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Housing finance in January hit a new high in January up 0.6% at $33.7 billion, excluding refinancing.

This lending increase was mainly led by investors, up 6.1% in the month, despite government incentives from schemes such as the First Home Deposit Scheme releasing more places in the market.

The Omicron wave has also failed to deter the business credit sector with it seeing similar growth during the month. Likely contributors to this were government incentives such as the instant asset write-off and the loss carry-back which are still available until 2023.

Growth in the housing market is starting to lose momentum with growth down to 0.6% in February – the slowest monthly growth rate since March 2020. The overall picture is bullish with annual growth at 20.5% to February, however the peak is likely behind us. Supply in the market remains relatively low, however recent weeks seem to show an increase which will likely lead to a further relaxation of growth.

Dwelling prices in Sydney went backwards for the first time since September 2020. The highest reductions were in the luxury end of the market which does typically see more fluctuation that other segments. Melbourne has traditionally followed Sydney, however prices there remained flat. These bigger cities have been outperformed by their smaller, more affordable cousins where the median dwelling price is continuing to hang at record highs.

When to leave your lender

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When it comes to your home loan, making sure you’re getting the most competitive deal is important. Even a small difference in your interest rate can mean thousands of dollars over the long run.

That’s why it’s imperative to ask us to regularly review your mortgage and ensure it’s right for you.

Here are some signs it may be time to shop around for a new lender.

Your home loan is getting old

The days of staying with the same lender for 30 years are long gone.

In fact, if you’ve had your home loan for more than two years, chances are you could be paying more than you need to.

The home loan market is highly competitive and new products are being released all the time.

You may also benefit from loan features such as offset accounts (whereby any money you deposit is offset against your loan balance, saving you money on interest) or a redraw facility.

A redraw facility allows you to make extra repayments on your mortgage and save on interest, but you can still access and withdraw those extra funds at any time.

The honeymoon period is long gone

When you first take out a home loan, lenders may offer you a sweetheart deal to reel you in.

It’s not uncommon for them to waive fees or discount interest rates to new customers. This kind of loan arrangement is frequently referred to as a ‘honeymoon period’ or ‘honeymoon loan’.

But once the honeymoon is over, the loan may revert to a more expensive or less convenient loan than you would like. If that’s the case, it’s time to look at new options.

You’re not happy with the service

If you’re always chasing your lender about rates or ways to save, it may also be time to move on.

Similarly, if you’re sick of talking to a voice recording and crave real human interaction, there may be other lenders who place greater importance on customer service.

There’s no shortage of lenders out there and you may find that some are better able to give you the support you need.

Your needs are not being met

Life changes and when it does, it’s important to ensure your mortgage still meets your needs and goals.

Maybe you’ve had a job change or promotion. Perhaps you’ve had a baby or your living arrangements have changed.

When these things happen, it’s a good idea to make sure your mortgage is still right for your needs.

Ready to shop around?

The easiest way to ensure your mortgage is right for you is to talk to us.

We operate under a statutory obligation (best interests duty) to act in your best interest when providing any credit assistance. Banks, however, are not required to operate under the same obligation.

We’ll assess which mortgage may be right for you, based on the cost of a product (the interest rate, fees, charges and repayment size, for example), and other considerations (such as loan features) which may be of value.

For a home loan health check, get in touch today.

How to build a property portfolio

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Getting started in property investing is exciting, and may be easier than you think.

Property investment could be a great way to build your wealth and achieve your long-term financial goals.

Here are some tips to help you work towards building your property portfolio.

Set your goals

Not sure where to start? A simple tip is to work out your goals then work backwards.

What are you hoping to achieve in the long run?

Perhaps you want a passive income of $2,000 a week steadily flowing into your bank account or to be able to live off a yearly amount in retirement.

From there, you can determine how many properties you will need to own at what price point and rental income to achieve your goals.

Define your investment strategy

There are all sorts of strategies when it comes to property investment. It’s best to talk to your financial advisor or accountant about the right strategy for you, based on your financial circumstances and aspirations.

Rental yield vs capital growth

For some investors, rental yield is the primary goal.

There are two types of rental yield:

  • Gross rental yield is your annual rental income divided by the property value, multiplied by 100.
  • Net rental yield is your total rental income, less any expenses incurred in owning the property, expressed as a percentage of the purchase price.

For other investors, capital growth is more important.

It can be tricky to achieve both solid capital growth and a high rental yield, so often investors have one or the other in mind.

One investment strategy is to aim for a portfolio with certain properties that deliver high rental yields and some that offer strong capital returns.

Positive gearing vs negative gearing explained

Positive gearing is when the gross rental income is greater than the costs associated with owning a property. In other words, the property generates a positive cash flow.

Negative gearing is when the rental income is less than your outgoings. One of the drawcards of negative gearing is that you can offset losses against your salary, thereby reducing your total taxable income and tax payable.

Again, it’s recommended to speak to a professional about whether positive versus negative gearing is right for you.

Get your finances in order

Once you’ve defined your goals and investment strategy, speak to us about how to fund your property investment.

You may be able to use the equity in your home for the purchase. Equity is the difference between the current market value of your property and how much you owe the bank. If you’d like to explore how much equity you have to work with, you can talk to us.

We can also help you create a budget for all the costs you’re likely to incur as you build your property portfolio, such as council rates, management fees and insurances.

Start the property hunt

The final step is to start looking for the right investment property in the right location.

Your investment strategy and what you’re trying to achieve will ultimately impact what and where you buy.

Generally speaking, if capital growth is your motivator, consider to go for suburbs that appeal to a large demographic – ones that have plenty of amenities like schools, public transport and shopping precincts.

For inspiration about where to find properties with big rental returns, including the top 10 highest rental yield suburbs per state/territory, check out CoreLogic’s best performers for 2021.

Tip: For free suburb and property reports containing a wealth of information about everything from rental yields to comparative sales, get in touch.

A word about diversification

Diversification is the practice of spreading your investments around to mitigate risk of loss.

In terms of real estate, that might mean investing in different geographical markets, investment strategies and property types (residential and commercial, for example).

As you build out your property portfolio, it’s a good idea to keep this in mind.

Get in touch

With the right support, you too can enjoy the benefits of property investing. The sooner you start the better, so speak to us today.

Your full financial situation would need to be reviewed prior to acceptance of any offer or product.