What you need to know when investing in a short-term rental

When you’re considering buying a property investment to let on a short-term platform, like Stayz or Airbnb, there are certain features that need more attention than a regular residential rental.

First is location. With Stayz, beachside is always popular and attracts longer visits.

Beyond that, there are certain features that attract holidaymakers or long-weekenders.

“Our customers search most often for pools, beachfront, whether a property allows pets, a hot tub or spa, a fireplace or fire pit, and space,” says Stayz’ Simone Scoppa.

“They want enough room for the whole family, in multi-bed homes with a big entertaining space.

“That could also mean a good space outdoors for people to get together. A third of the people we surveyed were looking for a fire pit – and you can buy an off-the-ground one … for just $200.”

Stayz has over 50,000 holiday homes but, of those, only 9000 are pet-friendly.

With one in 10 searches being for homes that allow pets, that means a good niche awaits any short-stay investors who don’t ban animals.

Interior designer and homeware retailer Deb Saunders, who appeared with husband Andy on The Block and Renovate or Rebuild, bought a six-bedroom house on the NSW Central Coast at Green Point for $955,000 in October 2020 with the intention of making it an Airbnb rental.

“It just needed a refresh, and we had four weeks before we wanted to put it up for rent,” Saunders says.

“So, we did minor renovations to the bathrooms and kitchen to give them a brand new look. We did some retiling and put in beautiful splashbacks and pendant lighting. Our aim was just to make it look a lot lighter and brighter and fresher. Then we decorated and furnished it in a nice neutral colour palette that reflected its position near a lake and beaches.”

From that moment on, the house was completely booked up six months in advance.

Another of the reasons for its popularity, Saunders says, was that it was always presented as clean and tidy and well cared for, with manicured lawns.

She employed a professional manager and a team of cleaners to go through every time there was a change of guest and she also visited regularly to check on things.

Furnishing a short-term let can also be expensive, but Saunders recommends buying some quality items, like the sofa and rugs that will see a lot of use, and excellent mattresses, which holidaymakers tend to appreciate.

Other furnishings can be from cheaper suppliers.

At the same time, you should always still keep an eye on the investment fundamentals when you’re choosing a property, says Good Deeds Property Buyers principal Veronica Morgan.

“As well as something that’s going to be a good short-term rental, you also want something that’s going to prove to be a good investment property that will hold its own in the long-term market as well,” she says.

“The COVID lockdowns highlighted that very clearly when so many properties had to change to residential lets. So, for long-term capital growth, you also need somewhere that someone else – like an owner-occupier – will want to buy when it comes time to sell.”