While short-term rental markets are undoubtedly a booming new category in the property investment landscape, many investors still harbour doubts about exploring them because, compared to long-term rentals, there is a different dynamic that could determine one's success in this new field.
MadeComfy's Sabrina Bethunin and Quirin Schwaighofer admit that they have had to address a couple of prejudices as they run an end-to-end service provider empowering property investors to maximise their returns by leveraging online platforms in the short-term rental space—including concerns about time, security, and cash flow.
Prejudice: The short-term rental strategy is time-consuming
Many property investors think that managing different expectations from different sets of people in a short amount of time might be too stressful to handle. However, according to Sabrina, the solution to this problem is as traditional as it could get.
"I think if the property is managed for you, it's exactly like having a long-term rental, a long-term tenant. So if someone is managing, your property is going to be exactly the same... [We, in MadeComfy], mind tenants, guest management, guest communication. Everything is managed for you," she explained.
As in the case of almost all property investment ventures, having an effective financial team by your side can ultimately add value to your portfolio.
Quirin said: "The way we operate, it's more on a value-adding side. So, in average, we achieve 40 per cent higher returns [than] the average Airbnb host does... For all those value-adding services, we're charging a 20 per cent commission... All in all, you're better off using us than if you did it all yourself, minus all the stress and work that is involved."
Prejudice: There are higher chances of "wear and tear"
Another prejudice that they usually address when talking to property investors who are considering shifting to a short-term rental strategy is the higher possibility of the property suffering "wear and tear."
According to Quirin, many property owners are afraid that the large number of people staying in their property over a short period of time can lead to some form of destruction at a certain point. However, the opposite is actually true.
He shared: "In the last two years [that] we've been doing [this business, we notice that]... when people stay three, four, five days... they are usually out because they come here to either work, or they come here to experience Sydney. So, they are less in your place."
Prejudice: There is higher risk on the revenue side
Lastly, property investors are often concerned about the "predictability of income," according to Quirin.
But like any good financial team, MadeComfy's people ensure that they conduct relevant studies on different areas to provide a good revenue prediction for their clients and ultimately lower the risks that might be involved.
"We provide people with a 12-month revenue prediction of what their net revenue is going to be, including fluctuations and increases in lower times in the year. So, they have a clear understanding where that will be, and that's based on previous facts," he said.
"We describe the market. We know what happened in the last 12 months and we know the demand and supply with statistical models that we have, [and] how it's going to be in the next 12 months. That, then, often helps them to understand that there's maybe less of a risk on the revenue side than they think there is."
Like the more traditional strategies in property investment, the short-term rental strategy can be an effective tool for success if the investor makes time for good education and if he surrounds himself with a good professional team.
Tune in to Quirin Schwaighofer and Sabrina Bethunin's episode in The Smart Property Investment Show to know more about their insight into the key differences between short-term versus long-term rentals, as well as how property investors can ensure they’re getting the most out of their portfolio.