To create wealth from an investment property, it doesn’t only mean you have to make sure that it’s fit to be tenanted; there’s a lot of other groundwork that needs to be covered to secure and sustain solid occupancy.
But sometimes in real estate, a new game-changer enters the spotlight. Such is the case with the number of investors that are turning toward the short-term rental market. The savviest short-term landlords are also getting a professional on-board, so that they don’t have to lift a finger.
So, how can your rental income not only be steady, but perform at its optimum best, without you having to pour your heart, soul and energy in the property?
In the latest episode of Your Investment Property’s YIP Talk podcast, Abigail Howells, inbound sales manager at rental management company MadeComfy, sits down with host and magazine editor Sarah Megginson to reveal how investors are maximising their rental incomes by switching up their long-term tenancy contracts for short-term holiday leases.
“We’ve got a marketing team that have done a fantastic, really comprehensive, report on the top 10 suburbs for [short-term rental] occupancy for Sydney, Melbourne and Brisbane. They've even drilled down within those top ten suburbs for each city,” Howells shares.
MadeComfy has also pin-pointed the suburbs that have shown the most demand in winter, and the summer, as well as what dwelling types – apartments versus houses – are gaining the most traffic within these locations.
“In winter for houses, Newtown and Leichhardt actually have the highest occupancy, and for apartments, it's Chippendale, Haymarket and Redfern for the winter seasons,” Howells says.
“Then in summer, you may be surprised actually, as it's also Chippendale. Chippendale is the top spot for short term rentals in Sydney, and for houses, it's Surry Hills and Newtown.”
The fact that these suburbs don’t harbour a magnetic sea view may raise an eyebrow, simply because the coastal getaway has long captured the hearts of travellers. But it’s also not to forget that the short-term rental market welcomes an array of people that have differing interests; whether they are weekend vacationers, corporate travellers or people who require a longer stay.
“You wouldn't necessarily go, yes, I want to be next to the entertainment centre for a long-term tenant. But that could be a really good driver of rentals when you're looking at a short-term letting strategy,” Howells says.
“It’s really important for investors to consider sometimes something that's outside of the box and not just your Bondi or your Chippendale [markets]. Those are really hot touristy spots, but [investors] also need to consider the situation of the property, and being close to train stations, light rails, and hospitals.”
Sharing the top five ways that investors can increase their profits when going into the short-term market in the podcast, Howells also offers insight on how MadeComfy ensures that a property’s profits remain ripe without the investor having to rely on full-time occupancy. This includes adjusting the nightly rate depending on whether it’s low season or high season, and also leveraging off popular seasonal events.
“We never stagnant pricing. One of the worst things you can do is just have the nightly rate the same for the whole period. Utilising seasonality and pricing is definitely a key,” Howells shares.
“It's about asking: what's going on in the area? What is happening with the supply and the demand? You're not always going to have access to that information if you're just managing it yourself and it's quite a lot of research that you have to do if you really want to optimise on your pricing.”
To find out how you can reap the benefits from teaming with a short-term rental specialist, and learn which suburbs are being booked the most often, listen to Abigail Howells’ full episode on the YIP Talk podcast.