Home owners across Australia are cashing in on the growing popularity of short letting, with some Sydneysiders reportedly earning as much as $5000 a year as occasional hosts.
However, while letting out a spare room – or even your entire property – on a short-term letting platform may seem like easy money, there’s actually a bit involved.
In fact, there’s a science to making money listing on short-term let sites. Here’s your step-by-step guide.
The first step is pretty obvious: set up an account or profile on the website or app of your choice.
A spokesperson from short-term rental specialist, MadeComfy, says the process usually involves entering your details, verifying your identity and providing banking information so you can be paid.
Each platform has different requirements. For example, some require certain documents, while others might even ask for a selfie. Just follow the prompts until the account is set up.
Next is creating the actual listing and writing a description. Again, each site has different requirements, but generally speaking, it’s a matter of filling out as many fields as you possibly can.
When it comes to writing a description, MadeComfy recommends thinking about your target guest audience.
“Are they likely to be families with children or overseas travellers? Your core target guest markets should drive the way you sell your property.”
Jill Schoolenberg, regional president for Australia, Canada and Latin America at GoDaddy, says it’s important to represent your property accurately, as one of the key things guests look at is reviews from previous guests.
“A misleading listing can result in negative reviews and potential customer unhappiness,” Schoolenberg says.
At this stage, also think about how you’re going to handle check-in and check-out.
The third step is to get photos that accurately showcase your property’s best features.
Given how competitive the marketplace is, MadeComfy recommends investing in professional photography. It’s possible to take the shots yourself, too, if you know what you’re doing.
“The cost of hiring a professional property photographer is quickly recouped by the higher bookings and earnings you will receive,” MadyComfy explain.
“Poorly framed, low-quality photos with bad lighting can completely ruin your listing and your chances of getting a booking.”
The photos should include the following:
Once you have a great set of photos showing all of the key living areas, there’s no need to constantly update them, unless you change something noticeable, like add new furniture or if you do a renovation.
To work out what to charge, check the prices for similar nearby properties and how the rate changes throughout the year, depending on the season.
MadeComfy say that as a very broad estimate, an “entire place” listing for up to four guests near the CBD in Sydney can typically cost guests from $190 to $350 per night, depending on location, amenities, condition and seasonality.
Private rooms with shared living spaces can start from as low as $50 per night.
It’s wise to also research and plan for special events, such as concerts or popular sporting matches, that can create a spike in demand and allow prices to be raised significantly for temporary periods.
Some platforms allow you to set other fees too, like a cleaning fee or extra charges to allow late check-out or to have an animal.
Take a close look at the terms and conditions to understand what is and isn’t allowed, charging-wise.
Now, get the property ready for guests, starting with an initial deep clean. Then ensure all appliances, lights and taps are working.
Then, think about the furniture. Ensure the property is adequately furnished for the maximum number of guests advertised.
It’s also a good idea to stock basic home amenities, such as bathroom supplies, kitchen utensils, coathangers and so on.
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With all the hard work done, it’s time to wait for bookings to roll in and then host.
Most platforms offer a step-by-step process for handling check-in and check-out, involving a series of automated emails.
As well as how to present your property and what to charge, would-be hosts need to consider a number of other things, especially if you intend to let out your whole property.
How will you handle check-in and check-out? Will you use a locker box? Is the process easy to understand for non-English speakers? Is it accessible at all hours of the day?
What is your operations strategy? Will you hire a cleaning company or clean the property yourself? How will you manage maintenance and tradies to fix issues if something breaks?
How you will manage linen and towel cleaning and supply?
How will you respond to questions and issues from guests promptly at all times of the day?
Hosts also need to investigate the tax implications, as income earned from short-term rental platforms must be declared for tax purposes.
It’s also wise to think about insurance. MadeComfy recommends property owners take out a specific short-term rental policy.
While it is no secret cracking into the property market is tough right now, this report can help buyers identify regions that have the most affordable homes in each city and region across the country. Click here to read more.
So how can you get into your own place as quickly as possible while still paying the rent? We asked a financial adviser for his tips on what renters can do to increase their chances of buying. Click here to read more.