A new age in rentals is upon us, putting more profits back into investors’ pockets while stripping away the hustle that can come with managing a home away from home in paradise. So how can you enjoy sky-high returns and minimise your stress as a landlord offering short-term rentals? Nina Cuturic reports
The weather is balmy, the people relaxed, and the profits as high as the sky-rises that line the Gold Coast’s beaches. So what’s not to love about owning a short-term rental in balmy Queensland?
With more investors offering their properties up to vacationers, the nation’s short-term rental sector has made considerable ground: in 2016, New South Wales generated around $435.2m in short-term rental revenue, followed by Victoria at $272.1m and Queensland at $162.8m (according to an ACIL Allen study).
Despite coming in third, Queensland is now said to offer attractive growth opportunities for short-term rental properties, thanks to the state’s ongoing romance with global travellers and weekend adventurers.
MadeComfy Brisbane city manager Calum Walters says the short-term rental market in Queensland caters to a real mix of vacationers and corporates, who can on some occasions secure 30- to 80-day bookings.
“They are wanting to have a home base for a longer period of time, rather than a traditional holiday rental,” Walters says. “The way we present our homes and have them fully fitted out is to essentially have the hotel-quality finishes and the touches, but then you feel like you are in a home and [it has] more of a local vibe to it.”
Queensland’s position as a promising location for short-term rental growth became clear when Tourism Industry Development Minister for Queensland Kate Jones reported that international visitor expenditure for the year ending September 2018 had reached record heights in the Sunshine State, shooting up by 11.5%, with 2,762,000 visitors spending a total of $5.9bn.
MadeComfy, a shortterm rental specialist, is taking the lead on this front. From making sure a shortterm rental is appropriately furnished, maintained and ready for the next scheduled check-in, to adjusting nightly prices to leverage nearby events, MadeComfy is allowing investors to tap into higher rental returns in tune with stronger demand – without having to do the hard work themselves.
“One thing that our pricing team does really well is working out what market you’re in and what is driving the market locally, so essentially, with all of our properties that are in South Brisbane or in short proximity to the main attractions such as the Convention Centre, [our approach involves] inputting every event that’s in those points of interest for the year and capitalising on that,” Walters says.
For a guest who can’t get the dishwasher working at 11 o’clock at night, Walters says: “We know what model that is, and our 24/7 guest support can talk them through that so that they don’t have an issue.”
With his background in real estate and hospitality,
Walters found that MadeComfy perfectly merged the two for him.
The pursuit of growth has helped him grow MadeComfy SEQ
to over 100 beds in less than nine months.
Securing strong tenants
Walters says one of the biggest concerns for people who are changing over from long-term rentals to a short-term strategy is: how do we stop the partying?
“That’s the concern 99% of the time, which I think is a portrayal or a misconception through the media,” he says.
“Not only do we have measures to prevent potentially rogue guests from booking our properties – with strict house rules and higher price points – but you generally hear about the really bad Airbnb stories, whereas you don’t hear about people who have stayed in a short-term rental because their home has been destroyed by a natural disaster, and then they have been able to come into one of our company properties and stay there for six months, or a couple of months, while their house is being rebuilt. You don’t hear the good side of things, and 99% of our guests are great.”
MadeComfy’s recent strides in the Brisbane and Gold Coast markets have been nothing short of gamechanging for investors, Walters adds (see boxout). He says Southeast Queensland is an advantageous playfield for short-term rentals, and one that is gaining traction as the state encourages further business growth.
“I feel like Queensland has its own mini-markets, and the Gold Coast even has submarkets as well, because our properties that are in Surfers Paradise are more like holiday properties. But at our properties in Broadbeach, which are really close to the Convention Centre, we’ve had lots and lots of corporate tenants,” Walters explains.
As more investors have started to see a real difference in their cash flow, a surge of new Airbnb listings have hit the market, totalling around 4,435 active listings across Brisbane (according to AirDNA data). So, how can you increase your rental income in a market that has already become populated?
Walters points to MadeComfy’s multifaceted approach and attention to detail.
“We can handle everything from the initial conversation with guests through to the property set-up,” he says.
This includes the investor being able to select one of six professional home-design packages and have the property professionally photographed for online listing.
Without such detail, and if the online listing doesn’t jump out of the screen, an investor can risk their property being “just another brick in the wall”, Walters adds.
MadeComfy is also in the process of developing its own portal for its corporate partners, Walters says, which will allow employees of larger corporations to make bookings. As a result, the properties will have wider exposure, and MadeComfy’s loyal client database will also grow.
“Corporate clients will know the quality of the property that they will get each and every time,” Walters says.
CASE STUDY: 26% HIGHER RETURNS!
For first-time property investor Nina Dai, a maximised rental income is carving her a path to her next property purchase.
Since signing on with MadeComfy in October 2018, Dai has seen her two-bedroom apartment in South Brisbane generate 26% higher net returns than the average long-term revenue. This was despite her property’s occupancy rate dropping to 70% in March.
“People often think their property should have a 100% occupancy rate, which is why they opt for leasing it out on a long-term basis,” Dai says.“Many people don’t realise you can earn a much higher income renting it out for shorter periods of time and adjusting the price accordingly.”
The finer details
Your success as an STL landlord boils down to your customer service. So, when it comes to internationally made bookings or queries that may drop into an investor’s inbox at, say, 3am, MadeComfy’s 24/7 guest support team is able to respond and secure the booking as quickly as possible.
If guests are to experience a seamless 360-degree service – styling, marketing, maintenance, and quick turnaround time – as provided by MadeComfy, Walters says “more guests are likely to leave a review, and the reviews are really powerful in the short-term market”.
He adds that it’s also the finer details that make a difference to results, such as providing complimentary champagne and a welcome note to guests who are staying for an extended period of time.
“Our pricing is dynamic and it is constantly updating, almost daily, as we know that the most important thing for owners is generating the highest nightly rate balanced with the highest occupancy rate.” he says.
While the higher returns are proven, Walters says the shortterm rental market is still “the great unknown” for many – but MadeComfy is aiming to neutralise the risks so investors can sit back and enjoy the profits.
“Owners worry that guests are going to destroy their property, but we’ve found that when people are staying short-term, they’re not moving couches around, they’re not moving dining tables, they’re not banging into walls and that sort of thing,” Walters explains.
“Also, because we handle the housekeeping with regard to check-in and check-out, and our average stay is three nights, the maintenance is actually getting far more attention. You’re getting eyes on the property at least once a week, so it is actually getting viewed and cleaned probably more than it ever would be if it was long-term.”
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