Various news reports have attempted to link short-term AirBNB rentals to the low number of rental homes available for long-term tenants.
The money paid for these short term rentals goes overseas, to AirBNB’s bank in San Francisco. That’s quite the opposite of keeping local money with local property investors. AirBNB had revenue of $2.6bn in 2017, operating income of $450m and has 3100 employees. The company says it has facilitated 300 million guest arrivals since its inception in 2008. We’re talking about a company with a strong business model almost all of us have heard of, and reasonable security and some basic protection to minimise landlords getting ripped off, so it’s not surprising a few landlords out there are seeing AirBNB as more rewarding than using a property manager.
While it can sound alarming that there are 20,000 AirBNBs nationwide in NZ, it pales in comparison to the 450,000 private rental properties on the market when last counted by the Census in 2013.
We can look at numbers of hosts, alternatively. AirDNA’s MarketMinder report suggests the average daily rate commanded by Northland’s 506 active rentals in the Whangarei District fluctuates between $100-$140. However, there was an occupancy rate of only 35 per cent for many properties many weeks.
In the Far North district, they can command an average daily rate of $150, but occupancy of 23%. There are far more hosts up north, interestingly, with 661 active hosts registered with AirBNB.
Median weekly rent in Whangarei has hit $400, as has Kaipara, and it’s hit $370 in the Far North. So anyone who wants to rent out their place would need to achieve about 2.5 nights of occupancy each week and charge an average of $150 a time to meet the median. Having three different sets of tenants each week is a headache few landlords have time for.
As a landlord, if anything goes wrong and you’re wanting mediation when in a disagreement with tenants, you’ll want the Tenancy Tribunal to adjudicate. However, when a house you own is used as a holiday rental, you’re not covered by the Residential Tenancies Act. Standard rental agreements simply don’t apply.
It is the booking terms and conditions given in your AirBNB page listing which would set the rules about breaches and compensation. You’ll have to get your short-lived tenants to sign a written agreement outlining your terms and conditions to cover anything else. Using AirBNB to make a quick buck doesn’t guarantee a buck and isn’t that quick.
Long story short: stick with the experts. Rentals.co handle hundreds of properties and can advise on when decisions are short term gains or beneficial long-term.
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