It's a long way from Paris to Melbourne, but for Propertifolio co-founder Stephane Guerin, relocating to Australia was a natural way to realise his vision of working with high-quality short-term rentals. With the better part of two decades already under his belt in the industry, he recognised the potential this country had for expansion in the short-term rental market – and he realised he could bring his skills to bear and aid property owners in getting better results.
In partnership with Stephen Grocott, Guerin set up Propertifolio in Melbourne in 2017 and has since expanded around Australia. Plans are afoot for outreach into the wider Asia-Pacific region.
“Really, I want us to be famous for providing the best service in the short-term rentals space,” says Guerin.
Stephen Grocott and Stephane Guerin have joined forces to help investors maximise their profits with short-term letting
Most of Propertifolio’s clients, Guerin explains, are investors or people with holiday homes. Investors are usually looking for ways to maximise their return on investment through short-term rentals, rather than long-term tenants. Grocott agrees, noting that returns on short-term rentals can be 20% or more higher overall.
“Historically, investors tend to get better returns on short-term rentals,” says Grocott. “This also tends to allow for more regular maintenance as you need it, and easier inspection of the property by owners.”
Clients with holiday homes, by contrast, generally want to make use of them at certain times of the year but are also keen to defray some of the costs associated with such properties. Having guests in the property between their own stays helps keep the property maintained as well, says Guerin – leaving it empty for weeks or months means that the likelihood of break-ins, or maintenance
issues going unnoticed, is break-ins, or maintenance issues going unnoticed, is drastically reduced.
“For a lot of people, their holiday home is half investment, half retirement plan,” he says. “They might not be using it regularly, but it’s still an asset that needs to be looked after.”
Short-term rentals represent a significant growth opportunity for investors. According to Statista, short-term rental revenue worldwide was valued at US$302.9bn in 2017. By 2022, it’s expected to increase to US$436.9bn. Additionally, figures from AirDNA suggest that the short-term rental market grew by 47% from March 2018 to February 2019.
It’s part of a wider market trend, too. Hotels and chain establishments are being “crunched”, in Grocott’s words, by smaller providers who can offer a home-like experience at lower cost. Not to mention the quality of accommodation that many have available.
“Really, there’s been a shift away from the big players,” says Grocott. “But the smaller market is maturing quickly, and though it’s small, it’s becoming semiprofessionalised. Being able to provide a hotel/conciergestyle experience in a home environment is becoming the new benchmark. Those who can do this successfully will be the ones who really thrive into the future.”
That said, Grocott still describes the Australian short-term market as “underdeveloped”, given that it still comprises a relatively small portion of the property market. He believes that one of the major issues that tend to discourage people from entering the short-term market is the inconvenience of having to manage the property – or at least the perceived inconvenience. This is where Propertifolio steps in to deliver its signature service.
“Our mission is to provide customer service for the guests and owners alike,” says Grocott. “We don’t do dropboxes; we meet all guests personally. During their stay we can be in contact as little or as much as the guests would like. For example, they might need mid-stay cleaning, or access to local itineraries. Then after they’ve left, a property manager goes through the property and provides a report to the owner to flag any issues.”
In practical terms, these services are provided by local staff, who can also offer local knowledge.
“When the property manager has lots of local knowledge, both the owner and guest are really satisfied,” says Grocott.“So we partner with industry professionals to create an infrastructure that will support our business and also enable our local partners to expand in the process.”
This local knowledge is a crucial aspect of Propertifolio’s ongoing success – Guerin believes it’s integral for any business wanting to thrive in the property management marketplace.
“The issue we sometimes see is that owners don’t necessarily know the surrounds of their properties very well,” says Guerin. “So we want to incentivise locals and ensure that they can feel as though they’re part of what we’re doing with the short-term rental market.”
Consultation and improvement
Beyond supporting clients’ immediate property management needs, there’s much more that goes on behind the scenes. Propertifolio also offers an extensive consulting service, working with prospective clients to ensure they’re bringing their best to the table for guests and maximising their chances of being booked.
“I think it’s fair to say we’re a little bit fussy with the properties we agree to take on,” says Guerin. “But we always want to work with owners to show them what sort of potential their property can have if they’re willing to put in the work.”
Grocott agrees. Once guests have booked the property, they’ll see how great it is, but getting them across the line first is even more crucial, he explains.
“We have a good idea of what guests are looking for, so we start with the basics,” says Grocott. “Painting, furnishings, decorations, ornaments – even renovations sometimes. Owners will work directly with our stylists, who can cater for a range of different budgets and styles.”
Additionally, Propertifolio has a wide variety of data available to clients, including suburb analysis, average nightly rates and occupancy rates. It enables them to give effective and realistic information to clients about how their properties can be improved, as well as on the likelihood of being able to effectively attract guests.
“Providing a hotel/concierge-style experience in a home environment is the new benchmark. Those who can do this successfully will really thrive”
Guerin is a firm believer that this level of tech-savviness separates Propertifolio from run-of-the-mill estate agents.
We’re a new and nimble organisation, so we can pivot to change as necessary. A traditional real estate agent has a much tougher time with that.”
But technology isn’t the be-all and end-all. The most important thing, Guerin believes, is that the owner comes first.
“We are a human-to-human company,” says Guerin. “In the process of establishing the company we’ve talked to lots of people who’ve had issues with property management companies. But we’re always about the property owners. Technology is one of our most powerful tools, but we don’t hide behind emails.”