The Power Of Airbnb -Wellington’s rental squeeze could worsen as homeowners choose Airbnb over Renting

According to stuff.co.nz, Airbnb’s growing popularity could see the already scarce number of rental properties in Wellington diminish even further over the next five years, and industry insider says.

Airbnb is poised to become even more of a factor in the capital’s rental crises as more and more landlords turn over their flats and apartments exclusively to Airbnb management companies, rather than renting them out the traditional way.

Airbnb is taking away rental stock from traditional long-term tenants. We all need rentals but as this catches on and tourism increases it’s going to be a problem.

How Does Airbnb Work?

Airbnb is an online, community-driven market place that allows hosts to rent out their own home or room, and guests to find a house, apartment, single room or shared room to stay in.

It is free to browse or create a listing and hosts decide how much to charges.

Once a guest pays the host confirm the reservation, Airbnb holds the payment for 24 hours after check-in before releasing the funds to the host.

Hosts have the option of pre-approving guests, and guests can contact hosts through the website.

Guests pay a service fee on top of the reservation. Airbnb also takes a service fee from the host for each reservation to cover the cost of processing the transaction.

Both parties can also review each other after the stay.

 

What does the owner need to do?

– Process the check-in service face to face

– Process the check-out service face to face to ensure the premise and chattels are not damaged.

– Ensure response the guest within 48 hours to avoid cancellation

– Health and safety compliance

 

How much does the owner earn from Airbnb

Owners have the rights to choose renting part-time on Airbnb or becoming a full-time Airbnb owner.

Based on Metro NZ’s experience on Airbnb division, both choices bring the owner a substantial income. The following charts show the data we collected from our portfolio.

Taking one of our part-time Airbnb Property as an example. This specific property is only rented for Weekends. It is a newly built fully furnished property with two bedrooms. We managed the property for three months and it was rented out for 16 days in total for the past three months. The gross revenue for the property came to a total amount of $3,140.

According to the Tenancy Service Website, the market rent around $430 per week for a premium property. If we divided the rates in daily basis, it comes up with an amount of $982.86 for 16 days.

It is so obvious to see that Airbnb brings such a good income for the owner even they are away from the country for holiday. The following chart also indicates that Airbnb is more profitable than the normal lease term.

 

If you are an investor and have multiple properties in your basket, you can become a full-time Airbnb owner as it causes less capital expenses and brings more revenue. One major concern for an investor is the capital expenses every 3-5 years to maintain the property in good condition. A long-term lease may cause you a huge amount of deposit at the end of tenancy. The premise might need to be cleaned, the furniture might need to be replaced. However, with Airbnb, if you clean up your property after the guest left, the property will always be kept in a good condition. Taking one of our full-time Airbnb property as an example, the daily average rent is approximately $150 which is three times more than the market rent if the property is taken by a normal long-term lease.

What Metro NZ can do for owners:

Metro NZ always offers the best service to the owner and the guest.

We offer concierge service to the guest, and always pre-check the premise to ensure it is in good condition for the guest. We prepare a hand book for the guest about the nearest entertainment and restaurant. Check-out service is also offered to the guest.

For the owner, we design professional marketing campaign for each property. A cleaning service is also available after the check-out to ensure the property is cleaned and tidied.

Are you interested in our Airbnb Services?

Contact us today! Don’t miss this opportunity! Email to [email protected] to get more information about Metro NZ Airbnb service!

 

 

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