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How to make money with your property on Airbnb and other accommodation sites

Rental accommodation sites such as Airbnb and Roomorama are a win-win: listers earn extra coin by renting out a couch, room or an entire property, and wandering travellers can get unique accommodation options and dodge expensive hotels.

According to a finder.com.au study, some of the most profitable Airbnb locations in Australia are Barwon Heads (VIC), followed by Tin Can Bay (QLD), Bomaderry (NSW), Jindabyne (NSW) and Mudgee (NSW), which average $140, $85, $94, $130 and $100 per room in rent, respectively. Some of these locations also offer potential margins that exceed 1032%.

So how can you leverage accommodation listing sites to make the most of unused space in your property and boost your bank account? And what are the tax implications of earning this rental income?

ALSO READ: Check out the full analysis of over 2000 suburbs

ALSO READ: The 8 most bizarre places you can rent on Airbnb Australia

ALSO READ: Is Airbnb covered by your travel insurance?

How do I use online accommodation listing sites?

There are several online accommodation listing services that allow you to create an account and list your space within minutes. The application process and implications you should consider for some major accommodation listing sites are outlined below.



Create a listing and set the price

Visit the Airbnb website and click on ‘become a host’. You’ll then be prompted to describe and list your space. You’ll need to specify the property type (apartment, house, bed & breakfast), room type (entire home/apartment, private room or shared room), the number of people it accommodates and the location.



Next, hit "create listing" and "new to Airbnb". You’ll be invited to sign up by entering your personal details, including your name, address and date of birth. On one side of the screen, Airbnb calculates the amount of income you can receive based on the details you’ve entered. For example, if you listed a private room in a Surry Hills apartment, you could earn $2,112 per month.

You’ll be prompted to "get started as a host" and provide information on the number of beds, a description of the space, a list of amenities and directions on how to find your property. You’ll also need to specify a nightly rate for your space. Airbnb offers a ‘price tip’ to help you, but it’s up to you to choose a rate that reflects the quality and features of the room or space.

There’s an option to provide discounts for longer stays by setting weekly and monthly prices. You’ll also need to provide your account details for payment.

When forecasting your projected cash flow, remember that Airbnb deducts a 3% host service fee per booking.

Communicate with guests

Once you’ve listed the available space, you can select how your guests will make a booking: you can review each request and approve or decline within 24 hours or allow guests to book instantly without your approval. You can also list your available hours to ensure guests know when you can be contacted.

You can edit your calendar settings to control when and for how long guests can book your space.

Once a guest has made a booking, you’ll receive a notification in your "messages" inbox, which you can find at the top right-hand corner of the page. This is where you organise the details of an impending stay.

Greet guests

Once the reservation and payment has been confirmed, you’ll need to prepare and clean the space for your guests. When you greet them in person, you’ll need to exchange keys and provide any other information relevant to their stay. It’s always a good idea to provide maps, tourist brochures and local insight to ensure your guests have a comfortable stay.



Create a listing and set the price

Register an account by creating a username and password. Activate your account by verifying your email address, then click on your avatar in the top right-hand corner and select ‘list new property’.

On the "new property" page, you’ll need to specify the property type (house, apartment, hotel, hostel), number of bedrooms and bathrooms, maximum number of guests, location, rates and availability. Roomorama provides a "suggested price" based on the information you provide and the price of similar properties in the area.



Communicate with guests

Once your listing is live, you’ll receive booking requests from potential guests. You’ll need to respond to these requests to confirm bookings based on your availability. Keep in mind that you should respond to guests within 24 hours of receiving the notification to boost your host rating.

Once the booking has been scheduled, you’ll receive a confirmation email with the guest’s contact details. The guest will also receive a confirmation email with a six-digit payment code, which will be processed on the agreed check-in date. To process the payment, retrieve the payment code from your guest, access the booking online and click ‘Get Paid’.

Roomorama doesn’t charge listers a commission or any account-keeping fees. Instead, guests are charged a booking fee. Roomorama does charge a 3% fee to cover Paypal or bank transfer fees if you request a payout.

Greet guests

Once the booking is verified, you’ll need to organise the space for your guests and ensure that they know how to get to your property. You should provide maps and other information as a local to ensure that you receive good ratings.



Create a listing and set the price

To list your space on BedyCasa, click the "list your accommodation" button, specify the location and create an account by following the prompts. Specify the room category and type, provide a description of the room and details of the space, and select your preferred guest arrival and departure time.

You’ll then need to set the currency and price per person and detail the services that come with the room.

Bedycasa offers an "estimate your accommodation" feature where you can enter the address and category of the space for the average or indicative price. For instance, for a homestay guest room in Cronulla, you could be earning roughly $97.24 per day, $680.68 per week or $35,395.36 per annum.

However, keep in mind that Bedycasa takes a 15% commission, so you’ll earn the remaining 85% of your listing price.



Communicate with guests

You’ll receive rental requests through the "messages" tab on your BedyCasa account. You can respond to a potential guest’s expression of interest in two ways:

    1. Respond to pre-accepted bookings. This means that the guest has 24 hours to confirm their stay. You’ll receive a confirmation email once the guest's payment has been received.
    2. Decline booking request: If the space is no longer available, or you do not wish to approve a booking for any reason, you can decline the applicant’s request. You should then immediately update your profile to accurately reflect your availability.

Greet guests

As a host of any accommodation listing site, you need to treat your guests with honesty and respect. Ensure the space is clean and tidy prior to their arrival, and ensure that all advertised features or services are accessible.

How much can I make from renting out a space?

How much you make from renting out a space depends on a range of factors including the size and quality of the space, the property type, location, and market factors such as supply and demand indicators for the given area.

For our study of Airbnb profit margins across different suburbs in Australia, we divided the median weekly rental rate by the number of rooms available in each suburb. We then compared this with the Airbnb estimated income for a room to calculate the profit margin, also taking into consideration the density of existing listings in each region.

For example, if you were considering renting out a space in Baulkham Hills (2153), the median rent per room rate is $163 while the estimated income is $254. You could potentially earn a profit of $92 with a 56% profit margin.

Be mindful of any commission that may be taken from the accommodation listing provider when estimating your potential rental income.

Will I have to pay tax on the profit earned?

In light of emerging business models including digital services, the Australian Taxation Office (ATO) requires that accommodation listing hosts declare any income earned from using the service in their annual tax return. Failure to do so is considered tax evasion.

The issue is that as you start to earn more income, the ATO taxes you at a higher rate. This is why it's a good idea to factor in 10% for GST when setting your rental price. You should also set aside a contingency buffer of funds so you'll be ready to pay your owing when tax time comes around.

Estimate how much you will earn for the financial year from both income sources and then estimate your tax payable. An accountant or financial planner will be able to help you budget for this.

It's important that you don't fall into the trap of thinking that you're somehow exempt from paying tax on the income you earn from Airbnb – no matter how small the amount. Keep in mind that renting part of your home will also mean that you're liable to pay capital gains tax (CGT) in future. However, on the plus side, you can claim expenses and depreciation for the percentage of your home that is rented for the period it was rented.

Belinda Punshon

Belinda is a journalist here at finder.com.au. Specialising in the home loans and property sections, she is passionate about helping Australians improve their financial wellbeing.

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