3 tips for investing in short-term rentals
Want to cash in on the boom started by Airbnb? Short-term rental expert Amiad Soto shares his tips for getting started.
The Australian property game is evolving rapidly as short-term and vacation rentals grow in popularity. Properties and entire buildings are being snapped up by investors and property management companies alike in key Aussie destinations. In the last decade alone, the number of Australian rental properties increased by 500,000.
While a lot of properties are rented out long-term or traditionally, there is a growing interest in the earning power of short-term rentals, which (in some cases) could earn you around 30% more than a long-term rental.
So, if you're thinking of buying an investment property – or already have one that you want to rent out to travellers – these tips will help set you up for success in Australia's booming short-term rental market.
1. Invest in the right tools to prepare for the inevitable change
Today, travel is often seen as a right rather than a privilege. The international tourism industry is travelling strong year-on-year, increasing the demand for short-term rental accommodation (rather than traditional hotel stays) across major cities like Sydney and Melbourne.
But managing listings across multiple websites can be time consuming. Especially when you factor in all the other hands-on requirements of running a short-term rental, such as scheduling bookings, updating listings and property maintenance that needs to be done more regularly when you have people coming and going every few days or weeks.
This has also led to a need for tech solutions that help people scale and grow their short-term rental businesses.
For example, one of the features we offer through Guesty is integration with the world's top online travel and accommodation platforms, including Agoda, Booking.com, Expedia, TripAdvisor and Airbnb. This means you can list a property on all these sites in a few clicks, rather than having to cut and paste details onto each platform.
One of the reasons I co-founded Guesty in 2013 was because I realised first-hand that there was a significant need for tech solutions to support businesses to scale and grow. Now, there are a number of tech products and solutions available for people managing short-term rentals. These tools have the potential to support and grow your business by:
- Providing top, cutting-edge technology, automation and global knowledge in the space.
- Giving owners and property managers the ability to address and meet industry and general requirements of the Australian market (e.g. regulation).
- Connecting property managers with relevant industry partners. For example, Guesty Marketplace offers an ecosystem of vetted and approved third-party solutions that help property managers better manage their businesses (e.g. security tools, dynamic pricing solutions, energy efficiency tools and more).
2. Make sure your short-term rental business stands out in a competitive and ever-changing market
There is no shortage of rentals in Australia, which makes it essential to stand out to both prospective and returning guests. Some suggestions of how to get there include:
- Tech yourself before you wreck yourself. First and foremost, make sure you invest in the best short-term property support tools to automate and streamline your day to day and operational processes. This gives you more time to focus on making sure your guests have a great stay.
- Differentiate yourself. Once your workflow is set up in a cost-effective way, focus your efforts on creating your brand. What sets your accommodation business apart from others? It could be the customer service, little extras you provide, a feature of the property or a combination of factors that help you beat the competition.
- Leverage data to increase your revenue. Think about how much you should charge per night. Will you have a minimum number of nights for each booking? What are similar properties offering guests? Research and data will help you find these answers so you can remain competitive in the market.
- Think from the guests' point of view. Remember that the guest experience is now your main focus. Your guests are expecting the same service (if not higher) as your competitors and market-alternatives like hotels. Think about your favourite places to stay – what stands out to you and what adds value? Can you do something similar with your property?
- Encourage reviews and guest feedback. Remember this equation: positive guest reviews = happy, returning guests + new guests = a return on investment to your business.
3. Continue improving the guest experience and quality standards
People crave memorable experiences, whether they're staying in a luxury resort or a budget family vacation rental. Positive experiences will result in 5-star reviews, recommendations to friends and returning guests.
After surveying property owners and managers using Guesty, we have found that some of the most successful ways to provide top-notch guest experiences happen behind the scenes. This includes:
- Communication. Guests expect constant communication with hosts/property managers. Using a unified inbox tool that centralises all guest communication across booking channels means property managers can streamline all queries and automate instant responses – so they never miss a message.
- Availability. Guests choose a property not only for its aesthetic appearance and amenities but also simply for its availability. You can keep your property's booking information up-to-date with a multi-calendar tool that syncs all reservations into one calendar. This will prevent double bookings and let you manage all stays in one place.
- Quality. Making sure your rental property is sparkling clean might seem like one of the easier tasks, but it requires keeping whoever is responsible for cleaning in the loop on all reservations. A handy way to do this is to use an automation tool that can send messages to cleaning staff when guests are checking in and out. This will ensure that when guests arrive, they see a tidy apartment – leaving a great first impression.
- Special touches. Nothing beats arriving at a rental that encompasses some special touches. Consider leaving a handwritten welcome note or thoughtful treats to snack on.
Short-term rental properties have the potential to become a valuable investment and business opportunity. These tips give you a starting point and, with the right tools in place, can help ensure your success as this accommodation trend continues to grow.
Amiad Soto is co-founder and CEO of Guesty, one of the world's largest property management platforms for short-term rentals that simplifies all aspects of the property management process.
After launching the disruptor in 2013 with his identical twin brother, Amiad grew Guesty from a Y Combinator funded startup to an international enterprise headquartered in Tel Aviv with 10 global offices and 280+ employees worldwide. He has spoken at various industry events - from VRMA to Web Summit Lisbon – and has been featured in prominent publications including TechCrunch, HuffPost, VentureBeat, Entrepreneur, The Next Web and Skift. Most recently, Amiad was featured in Forbes Israel's 30 Under 30 list.
Disclaimer: The views and opinions expressed in this article (which may be subject to change without notice) are solely those of the author and do not necessarily reflect those of Finder and its employees. The information contained in this article is not intended to be and does not constitute financial advice, investment advice, trading advice or any other advice or recommendation of any sort. Neither the author nor Finder has taken into account your personal circumstances. You should seek professional advice before making any further decisions based on this information.
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