5 Tips To Achieve 7-11% Rental Yield In The Short-Term Rental Market
Short-term property rentals have become a preferred rental option for many property owners and entrepreneurs in the main cities of Australia. Gone are the days when renting out a property long-term guaranteed sound returns, yet not all investors have enough knowledge about short-term rentals to make them a viable investment solution.
At MadeComfy, we often get questions from property investors about what to consider when switching to short-term rentals for greater rental yields. Here are some of our tips:
1. Choose the right location
For those who are considering investing in a property on a short-term basis, you first need to consider the location of the property. How in-demand are short-term rentals within the area you are considering? One way to work out the demand is to look into the data for properties in the area you are considering buying in. Use this data to understand the supply and demand for Airbnb rental properties over the last 12 months (read more on the short-term rental trend). High demand areas are suburbs with a consistent, strong demand, with less supply in the form of hotels or other short-term rentals and that are close to public transport.
Also, amenities such as free parking or swimming pools are good attributes for short- term rental properties, so consider these factors when investing in a short-term rental property.
2. Consider the right pricing
Pricing is one of the most important factors when renting out your property for short- term purposes. One important thing to keep in mind is that it’s not about how much you’re charging per night, but rather the net returns your property can achieve weekly, monthly or annually. Understand the current supply and demand within the area and adjust your rates accordingly. The market dictates how much your place should be priced given the competition and the season. Also, it is wise to aim for an occupancy rate of 80 to 90 percent to get the best net returns possible.
3. Prioritise furnishing and style
To stand out from the crowd, you do not want to save money on furnishing and styling as this is one of the most important parts of successful short-term rentals. Good styling and amenities result in high nightly rates, five-star reviews and returning guests. Also, you need to consider the quality and durability of furniture so they stay in top shape for a long period of time. Your investment pieces should include
a good couch, with enough room to seat the advertised number of people, a solid dining set with plenty of seating and high quality beds and linens. As for styling, think about the guests you want to attract. What works well for us at MadeComfy is having a quirky theme such as Mexican Oasis or New York loft style.
4. Stay on top of housekeeping
Short-term rental cleaning is different to domestic cleaning. Make sure that the property is always thoroughly cleaned to meet the expectations of your guests. Have strong attention to details and don’t miss out on essential household items such as glasses, toiletries and cutlery. Have a system in place to monitor the condition of your home because every small details will contribute greatly to how your guest will experience your property.
5. Give your guests the best possible experience
Don’t make customers chase you. Answer any questions or enquiries as quickly as possible, with as much detail as you can. Remember, you need guests to book your property as seamlessly as possible so it’s important that you answer incoming inquiries quickly. Now you’re all set. If you keep these tips in mind , all you need to do is get five-star reviews and let your recommendations do the job for you. One final reminder: treat your customers as you would valued guests in your own home and always be a step ahead in addressing their problems.