Airbnb for Property Investors
Is Airbnb a good idea for property investors?
Airbnb – it’s all the rage at the moment. Especially on the Sunshine Coast and other tourism regions throughout Australia.
So what is it exactly? It’s basically a short-term holiday letting platform that’s taken the world by storm. It lets property owners (the hosts) rent out their entire home or space within their home to guests. The major benefits of the platform are largely financial ones – the hosts get to make some money from renting out their home and the guests typically get accommodation that’s more affordable.
The platform is now starting to gain traction with property investors. They see the short-term letting platform as a method of increasing their rental yields compared to the traditional option of longer term tenancies.
Airbnb management companies can help look after your investment
To make life easier for property investors there’s also professional Airbnb management companies that look after the properties on behalf of the owners. Similar to a traditional property manager but instead they specialise in managing short term holiday rentals.
They provided a breakdown of the two options and showed how the Airbnb option can earn property investors a higher return and also enable the owners to enjoy their own properties for short stays as well. Something that could be handy if your property is located in an amazing holiday location like Noosa.
What do banks think about Airbnb and lending?
From a lending point of view – one thing to consider is that most banks are still trying to get their head around short-term holiday letting and how they treat the income from these properties when it comes to assessing your borrowing capacity. If you already have an Airbnb property then they’ll want to see that you can show at least one financial years’ worth of income from your Airbnb property before they will take that income into account when assessing your borrowing capacity.
All in all -there’s certainly a lot of benefits to going down the Airbnb route. Especially if the property is located in a high demand tourist destination such as Noosa where the owner can enjoy it from time to time.
About the author: Jamie is the owner and founder of Pass Go Home Loans and operates between the Noosa and Canberra offices. If you’d like Jamie to provide you with some credit advice – just complete and return this FORM
This information is not intended to act as financial, investment, legal, accounting or taxation advice – and for that reason should not be relied upon as specific advice for your situation. You should always obtain independent, professional advice prior to making any financial, investment, legal or taxation decisions.