As a seasoned property investor, Peter Noble didn’t start out with holiday leasing as his strategy. In fact, when he bought his first investment property in Brighton, Victoria with his wife Kristina back in 2010, his aim was to cater to long-term tenants.
“We had a few tenants in there for quite a few years,” he shares. “But when our last tenants left to go back to their native UK, we thought it’d be a good opportunity to try out short-stay accommodation.”
Peter and Kristina had long heard about short-term letting platforms like Stayz, part of the HomeAway family, and they had stayed in several accommodations of the kind when they travelled themselves. So, in 2016, they decided to take the plunge in and trial a listing with their investment property on HomeAway.
“We figured we’d try it for a year and see how it went. We had to furnish the property entirely and make sure that everything is provided. You’re paying for electricity and gas and internet – all of the things a hotel guest would expect to be available to them,” he explains.
It involved a small investment to get the property ready to lease, but the financial rewards soon began flowing in. As the couple began their foray into short-stay accommodations, they initially kept their prices low to attract a steady stream of guests and to boost their profile through positive reviews. This strategy would soon pay off, as tourists drawn to Brighton’s famous beaches and picturesque bathing boxes kept the property consistently occupied.
“We used the pre-existing platforms to look at comparable properties in our area and to get a feel for what would be the right level to set our rates at,” Peter says.
“We gradually increased those rates to where they are now, and during particular times of the year, such as during Christmas, we increase the rates based on the level of demand. We also offer discounts for extended stays.”
For the Nobles, this flexibility with regard to pricing is one of the perks of short-stay rentals, as they can adjust based on need. On average, however, they have been able to charge an average of $490 per night for the Brighton property – and they have maintained an occupancy rate of more than 75%.“If we find that we have some gaps in our occupancy, we can reduce our rates to bring more people into the market. They might be searching for properties like ours with a slightly lower price point,” Peter says.
Following the success of this listing, Peter and Kristina have listed two more properties on HomeAway: a four-bedroom house in Sandringham, and a massive seven-bedroom property on the Mornington Peninsula that can house up to 25 people. The latter had actually been purchased as a holiday home for the family, but the Nobles have no problem sharing.
“We sit down as a family and decide how many times we want to use the house throughout the year. We plan out the time we want the space to ourselves, and for the rest of the year, the property’s open for booking,” Peter says.
The Mornington home has become the most profitable investment in the couple’s portfolio, generating an average return of $2,000 per night. The house has become so popular with tourists, in fact, that bookings have been made all the way to December 2019 – with some periods commanding $3,000 a night. This remarkable cash flow has even funded the addition of a swimming pool and spa to the property.
“We’ve been able to make some really good capital improvements based on the cash flow we were able to generate, and that really helps us to do the things we want to do to make the experience better for people,” Peter shares.
“Our goal is to try and find properties that are in areas where there is a significant, growing tourist market.”
With the current success of their three short-stay rentals, Peter and Kristina are keeping their eyes peeled for their fourth property – but they’re making sure it’s in the right place.
“We’re always keeping an eye out on the market for the right property. And if the right opportunity comes, we’re looking to add to our portfolio. But our plan is just to get one property at a time and make sure it can generate the returns we’re looking for,” he says.
Stayz, part of the HomeAway family, is a world leader in the holiday rental industry and provides everything you need to rent out your property for the first time. You'll gain access to an exclusive set of tools that enable you to optimise your pricing, bookings and communication, as well as receive educational materials on how to market your rental to high-quality travellers. Stayz also provides homeowners $1M Liability Insurance cover for bookings accepted on the platform.
Interested to see how much your home could make? Receive an instant estimate of your property's rental potential based on nearby comparable rentals here
This article is a paid promotion and was written in collaboration with HomeAway.