With the rise of Airbnb - there’s no doubt that it has opened a whole new world of possibilities for property investors. From only having long term tenants as a viable option for landlords, short term stays are becoming increasingly more popular - particularly for those with the opportunity to achieve significant income gains.

What kind of property and where is located?

The first thing to consider is where your property is actually located. If it is a large family home in the middle of a suburb in a large city - it is less likely to be a desirable place for visitors to want to stay. However if you have an apartment in the middle of the CBD, or even on the city fringe, there may be a real demand for short term accommodation.  

Holiday hot spots may also be seen as a potential ‘goldmine’ for short term stays, but be aware whether there are seasonal dips at different times of the year.  

Analyse your current financial situation

If you rely on weekly rent to cover the mortgage on your investment, then it could put a bit of a strain on the day-to-day finances if you were to rent out your property as short-term stay accommodation. This is because it can be difficult to predict income and bookings. 

But if you do have a financial 'buffer' that could get you through any times where the property is vacant, then it could be worth ir if you are able to forecast solid future earning potential. 

Things to consider with short term renting

Obviously, there are quite a few differences between long term leasing and offering your property as someone to stay for one or two nights. Of course it needs to be fully furnished to be registered with places like Airbnb - with the supply of bedding and other amenities such as WiFi, TV and basic kitchen and bathroom necessities.

Another factor to consider is that every time the property is vacated, it needs to be cleaned for the next guest. And then there is the crucial element of always ensure maximum occupancy, which entails marketing and managing the bookings, as well as dealing with any issues that may arise.  

Sure, all of the above sounds rather overwhelming for most property investors, but it is the potential gain that attracts many to make the switch to letting their accommodation for short term stays.

Don’t forget about your investment goals

Don’t lose sight of why you got into property investment. If it was to have a nest egg for retirement, then it is probably best to stay with the ‘tried-and-true’ less risky route - by sticking with long term tenants.

But if you are someone who is prepared to take a chance on earning significant potential gains in the short term, then perhaps looking into renting your property for short term stay is worth the risk.

What kind of tools are available in the marketplace?

There are quite a few online tools that can assist with insights into the local marketplace, but for New Zealand, at the moment the most comprehensive one is Airdna. From rental analysis, to pricing, occupancy and seasonality, having this kind of data is critical for those looking at whether moving into short term accommodation is a viable choice.    

Who else can assist?

Don’t be shy to talk direct to the experts - there are plenty of them out there who would be happy to discuss what they know about the property investment marketplace.

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