Australia is a growing market for short-term rentals, which make up 11.8% of tourist accomodation in Australia1. In just Sydney alone, the number of Airbnb reservations went from 28,000 to 41,000 from 2016 to 20171. In other words, it's a great time to get in.
As one of the most expensive countries in the world for housing, it probably comes as no surprise you can make a lot of money renting as an Airbnb host.
In fact, in 2017, Airbnb hosts across Greater Sydney charged an average of $150 per night for a house or apartment. If you're looking to rent a private room, you could make on average $59 per night and $39 for a shared room.
However, it's not just the cities where Airbnb is popular. Jindabyne in New South Wales for example, a popular skiing area, has average accommodation rates of $130 per night. Similarly, Baron Heads in Victoria has an average rate of $140 per night.
3 tips to to make more money on Airbnb
While it might seem like a lot of work, you don't need to give up your day job to be an Airbnb host. Here are our key tips to maximise how much money you can make:
1. Work out how much you should charge
Using the map function on Airbnb or its price comparison tool, look at what other people are offering in your area. Of course, if you're planning on renting a private room for example, filter your search to private room accommodation.
Compare similar properties
To make sure you get the most for your accommodation, make sure the properties listed are also similar in terms of location, cost and amenities. For instance, if you happen to live nearer to transport links than competing properties, then you might be able to raise the price of your accommodation. It's also important you consider amenities like shared or private bathrooms and look at who else has them in your area.
Vary the price during the year
After you've calculated the average nightly rate, make sure the cost listed by other hosts is actually representative of what is listed. A lot of hosts put some dates at a low rate for only a few days a year so that Airbnb lists it at this price. However, they will generally have higher rates throughout the rest of the year.
Also consider raising your prices based on seasonality, says Angela Carrick from Air Design Australia.
I manage pricing differently for on and off-peak seasons. For example... Sydney festival, Chinese New Year, etc.
- Angela Carrick, Air Design Australia
Tip: Traditional lease and short-term rentals earn different incomes
While traditional leasing generally guarantees a more steady income, if managed properly, the potential income of a short-term rental is significantly higher.
Having said that, there are some added expenses you'll need to factor in that you otherwise would not on a traditional lease. These include supplies, utilities such as electricity and water and cleaning costs for each guest.
2. Pimp your listing to get more bookings
It's about getting seen, so professional photos are a must.
- Raeleen Kaesehagen, Mudputty
Take pride in your home and sell its uniqueness. Unlike hotels or hostels, your home has personality, which is a huge selling point for Airbnb. What does your home say about the suburb, town or city you live in?
It's all in the photos
Whether it's a passion for art or you're a huge animal lover and have a pet dog, don't be afraid to show that off. You can do this by taking lots of good photos.
Prospective guests want to be assured that where they're planning on staying is clean, tidy and comfortable. Your photos should reflect this as well as your home's personality. Photos should make your home or room look as welcoming, light and spacious as possible.
I'm a photographer, so I was able to take some professional photos and really show the property off.
- Tom Rawlins, Raw Lens Media
Here's an example of how Angela styles a room for photos:
Focus on the quirkiness of the property such as the decor and soft furnishings...One property I manage has a vintage record player with vinyls for example....Indoor plants work a charm! - Angela
If photographs aren't your strength, getting a professional to take them is highly recommended.
Photo: Angela Carrick
Our property had great natural lighting which was perfect for shots.
3. Make your guests' stay amazing to get good reviews and become a Superhost
While pictures are important, they need to live up to expectations. Becoming a Superhost can really boost your profile and help you stand out. Here are some of the tips worth following to reach this status.
It's hospitality at the end of the day, people expect hotel service.
Offer the comfort of a home with the standard of a hotel
While you're selling the appeal and personality of a home, keep it as clean as a hotel. Provide your guests with good sheets, linen, towels and toiletries.
Keep all this separate from your own stuff to keep them in good condition for your guests. Be respectful, give them privacy and listen to all feedback. Angela Carrick adds:
I used things like organic sheets and coffees to capture the health conscious side of the market. I also had books for kids. - Raeleen
Make it warm and inviting for instance by adding books, magazines and boardgames. I include good coffee, tea and shampoos...The goal is to get good reviews. - Angela
Add some unique amenities and items
Add a few unique amenities such as items that different people will love such as a guitar or books for kids. This can make your listing memorable after a guest has finished their stay.
I included some of my own photos in the room which our guests really enjoyed. - Tom
Have clear rules and guidelines
Have a clear check-in and check-out time with a fee for every hour they're late. That way, if your guests don't check out on time, they're obligated to pay. You should also include a security deposit in case something goes wrong.
Cleaning fees are common practice with Airbnb. Whether you keep the fee, do the cleaning yourself or hire someone, is up to you. Paying a cleaner may be easier if you have back-to-back bookings and work full-time.
Sell the attractions but don't lie
Is your home right next to all the good restaurants, shops or beaches? Consider all the great attractions around you and don't be afraid to get specific when you describe them. Let your guests know all they can expect. That also means being honest. If it's a small room with a single bed, let people know that. Lying will only result in heightened expectations and bad reviews. If you have pets, be sure to mention it. One of the perks of Airbnb is that a friendly puppy or dog is often there to greet guests when they arrive.
You are competing with others, so call out what's unique...but be honest too. For instance – if the window looks out to a brick wall.
Create your own guide and instructions book
Nobody knows your area like you, which is why it's worth creating your own guidebook. Let your guests know about all the best spots and places you've discovered over the years. It's also good to have instructions for how to use everything, from the washing machine to the television.
Get the Airbnb app and stay active
Anyone who travels knows the most stressful point of the trip is arriving at your accommodation safely. Downloading the app ensures you can communicate with your guest even if you're not there to greet them.
If you want to maximise your profit you have to be ready to allow last-minute stays and one-night stays. This means you are on call.
Picture: Getty Images
How much time do I need to put into Airbnb?
Becoming a host can be time-intensive if you're also working a busy full-time job or running a business. You need to be flexible enough to get to the property whenever guests need your help or you risk neglecting them.
If you work far from the place you're renting and aren't able to leave, or if you need to travel for long periods of time, you might consider using a property manager for Airbnb. For a percentage of the fee you're charging, a property manager will take care of everything while you're gone.
The properties we manage tend to have around a 95% occupancy in major cities.
- Angela Carrick
What if I don't have a property?
If you don't own a property, you can ask your landlord for permission to sub-let your room. If you can't sub-let, there are other ways to make make money on Airbnb too.
Becoming an Airbnb experience guide
Airbnb isn't just about renting out your house or a spare room; you can also make money as an Airbnb experience guide.
If you have an experience you think is unique and might enhance a tourist or visitor's stay, you can host an experience. It can range from showing visitors around town to taking a cooking class.
The most important thing is you plan your experience, know it inside out and try and deliver something unique. Put in just as much time and effort as you would for your Airbnb listing, taking the time to put together a detailed itinerary and pictures showing your experience off.
Risks to consider
Before becoming a host, it's worth considering some of the following risks and how you can avoid them:
Safety: While it's unlikely, you don't want to give guests the chance to steal valuable possessions or your identity. That's why you should always find a safe place to put any sentimental possessions, bank statements and tax returns. It might be worth investing in a safe for some of these things for peace of mind.
Insurance: While Airbnb provides insurance for property damage, it isn't a substitute for home insurance as it can't protect against personal liability or theft.
Guest refunds: You may be required to refund a guest's payment if you're responsible for making a mistake, such as forgetting to leave a key, misrepresenting your listing, cancelling at the last minute or leaving your home dirty.
Maurice Thach is the publisher for life insurance and business insurance at Finder and has been writing about insurance for 3+ years. His is favourite question is "Am I covered for _____?". Maurice has completed a Tier 1 Life Insurance Certification and a Tier 2 General Insurance Certification under ASIC's Regulatory Guide 146. This means he can confidently provide general advice for life insurance and non-life insurance products to Aussie readers everywhere. Outside of work, you'll probably find Maurice hitting up the nearest basketball court.
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