Successful Entrepreneur Promises To Improve Yields By Up To 40%
ith a background in engineering and high-level problem solving, entrepreneur Quirin Schwaighofer was perfectly placed to create a disruptive technology platform providing hassle free short-stay lets for investors wanting to maximise returns on strategically located properties. Founding his first business during his 20s, Quirin’s long-established record in the start-up environment primed him for the development of MadeComfy, a customer-focused property management service. Having just closed $6m in their latest investment round - and soon to open in Brisbane - the MadeComfy team aims to be managing 3500 properties by 2020, with ambitious plans for expansion overseas.
""Investors are able to leverage up. We manage properties in locations where people want to stay on the short-term rental market.""
API: What was your professional background prior to MadeComfy?
QS: As a project engineer in the mining industry I’ve worked in most countries around the world. I worked on a $250b project with BHP Billiton, acquiring the contract, implementing it, with critical logistics and execution, tight deadlines and high costs. I also had a restaurant and cocktail bar in Germany for five years, when I was in my 20s. I then had another tech start-up in the Australian mining industry called Hi-Key, however, I left that when I founded and became chief operations officer at MadeComfy.
API: Can you share your experiences in Australia’s start-up environment?
QS: The opportunities here are amazing. The ability to found and launch a company like MadeComfy has been highly supported by easy rules and regulations, making it simple to start. We’re now at a point from where we employ over 70 people. That’s something not every country gives you the opportunity to do. I landed in Sydney in 2006 and from the first moment I thought ‘Wow this is amazing.’ I come from Germany and the weather here was a big selling point, but it’s actually the people. I feel at home here even though I’m a foreigner, the whole country has been really open for that and I’ve got my daughter now here too.
API: What is it about the start-up environment that you enjoy?
QS: The ability to build things, to be creative, to build the culture and create value for people. Seeing something grow and generate value, it’s just so rewarding to know that what you do helps people in a positive way. You look back and see how much you changed something. It’s fast-paced, high performance, but a really friendly environment.
he first of its kind in Australia, MadeComfy helps investors to unlock real value in their investment properties, managing short-term lets, handling guest bookings, maintenance, cleaning and marketing. This form of professional AirBNB management is providing investors with 40% higher returns than properties leased long-term - a disruptive technology leveraging the benefits of contemporary business practice. For guests, they have the advantage of staying in well-located, high-quality properties: a hotel experience with all the comforts of home… and so much more!
API: What led to the foundation of MadeComfy and what was your aim?
QS: I’d stayed in hundreds of different hotels, travelled pretty much every week and saw it was a pretty hospital-like sterile environment when you stay in them. I discovered AirBNB and found it was a more exciting place to travel with, then started to rent out my apartment in Cremorne Point (Sydney) while I was away. That was in 2014 and I pretty much financed my whole apartment by having it rented out whilst I wasn’t there. The tricky bit though was to manage that and with my MadeComfy co-founder, we saw there were no companies really helping people in this way. We saw the potential of increasing the rental returns by timing it and focusing on the pricing, so we founded MadeComfy in 2015.
API: Can you explain MadeComfy in terms of being a disruptive technology?
QS: The space we are in is real estate and travel - hotels, pretty much. So where we are disrupting that space is that our technology enables us to run a lean operation, to manage guests and properties that are not all in one block. A hotel is two or three hundred rooms, you go up and down in one building, whereas we have 600 properties now all over the place. To manage that operationally is far more logistically difficult than it is in one block. A lot of AirBNB hosts don’t know how to price their properties and that was one thing that we had with our data team. The last bit is the way we communicate with guests, which is part of the technology we’ve developed to make it all very smooth.
API: Which investor problems does MadeComfy aim to solve?
QS: There are three things. Number one of course is the higher return. People who buy investment properties are seeking personal wealth through capital gains and yield. Where we help a lot is on the yield side and provide a more flexible use e.g. people who want to stay one or two nights or a few months, it’s more flexible than standard rental models . The second is that we take away all of the work. It takes a lot to advertise, clean, coordinate, change the pricing in accordance to our dynamic pricing method, organise the maintenance - there are so many things! I’ve done it and I’d had enough after six months. A lot of the customers we come across used to do it themselves too, but it becomes a full-time job. You don’t want to limit your investment by the effort you have to put into it. The third problem we solve is through your ability to use your property. Those that we manage, you can stay in it and use it, which is unique characteristics of short-term rentals.
API: How can investors leverage MadeComfy to their benefit?
QS: Investors are able to leverage up. We manage properties in locations where people want to stay in the short-term rental market. What we have generated is a higher rental return, so that where you have a 2 bedroom apartment in Pyrmont, you make $850 a week long-term, then pay your agent 4 or 5%, letting fees etc and walk away with $780, $790 net. That same place with us - we’re able to generate around $1200-$1400 after payments. That’s a very average return, but from an investment point of view you have a higher yield and higher return, then pay your mortgage quicker. A lot of our property owners were struggling to pay their mortgages before with the rent they returned, simply because of the property prices.
API: How does MadeComfy work?
QS: We will provide you with a 12-month revenue prediction of your property and tell you how similar properties have performed over the past 12 months. You have full transparency about what the expected performance will be and if we realise short-term rental is not for you or the property, we will tell you. We advise you on any renovation work that needs to be done as it’s important that you have a well-maintained kitchen, bathroom, carpet and walls. We take photos, advertise it on booking platforms, do the pricing (which changes every day depending on demand and supply). We handle guest communication 24/7, bookings, cleaning, provide linen, towels, shampoos, chocolate on the pillows, check-ins. We’re also there for the guests if there are any issues or maintenance requirements. Owners get a portal where they can see all the bookings, past and future performance compared with long-term. We charge a 20% commission and our owners achieve on average a 40% higher return than they had on any other form of rental before, so they walk away with a big surplus.
API: What type of investors does MadeComfy suit?
QS: Any investor that is up for higher returns. Of course, investors that are also confident going with a new trend because not everyone is suited for trying out new things. If you’re an early mover you have the advantage of being there early and enjoying higher returns. Of course the market will always saturate after a while - currently, it’s still amazing how much it can generate with the short-term rentals. Someone that’s up to provide and manage experiences for other people - you have a property where you know people enjoy staying, you have a lot of feedback, great customer service and you have someone working really closely with you. The main thing is location: your property has to be in a location that works, within a 10km radius of the CBD or in a holiday hot spot and it has to be well-maintained.