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Hi there - I am new to the website but loving all the advice so far.
Anyone here have any experience with Short-term Rentals in the Gold Coast, Australia.
I have a rather healthy budget to buy one or two properties (using mortgages with 20% down). I am eventually looking to build the business so it becomes my main income, although I realise I may have to work part time initially to make up my salary.
Has anyone done this and if so what areas would you recommend / Type of property - i.e unit compared to house?
I realise this is a broad question so any advice / tips would be hugely appreciated.
From an investment point of view, my only advice would be to ensure your numbers make sense in a traditional long-let non-Airbnb world.
My concerns in buying property to market as a short stay (especially via Airbnb) are:
Airbnb promoting the race to the bottom that makes the short stays less and less profitable for hosts.
Potential regulatory changes in your location. Cities throughout the world are increasingly turning against Airbnb for entire property Listings and putting rules in place to curtail them and those regulations hit investors most.
Not sure if this type of advice is welcome, but it’s the conclusion I reached as an investor.
Based on my experience and observations, one bedrooms with a sofa bed setup is the most profitable configuration for whole lets. 2 properties are not sufficient to replace your main income if you’re just paying down 20% equity. Also consider the earlier points raised, it’s a race to the bottom and margins are not fantastic at the moment. You could make some money , but not enough to replace your income. The first 6 months may just be breaking even to generate the reviews. And unless you’re managing it yourself, the management fees will eat away most of your margins. I would advise crunching the numbers and ensuring the property is still positive cashflow with a long term rental, lest you regret the Airbnb business
Also consider doing financial simulations , check out the gold coast Airbnb’s and see the pricing for different configurations. Give yourself average 60% occupancy and check whether that breaks even comfortably, after taking into council, OC, land tax , utilities and repairs. If not, I’ll say forget it.
You need to also consider what else you could do with that deposit/equity if you invested it elsewhere. Where in Australia are the best long term rental incomes - probably your best bet.
My understanding is that you now need to be approved on the Gold Coast to have a STR. The process can be long and expensive. This has been pushed by the multiple party house issues and the huge hotel industry there. There was a big surge for the Commonwealth games that turned into a price disaster for hosts.
Do your research, get on the site and look at booked, not empty and hoping properties where you want to buy.
Lots of accommodation available…low low nightly prices
I have been researching long term lets as a landlord as opposed to STR but I believe I can earn more if I lock in an interest only mortgage, rent out on Airb&b, live close by with a friend and manage and clean the property myself to keep costs down. I know the first 6 months are going to be ‘testing the water’ so to speak and building up my reviews.
Also as the Gold coast is an all year tourist hot spot, I am going to focus on location and lifestyle for my rentals, hoping to obtain the best possible occupancy rate.
Ben
I’m sorry, but you really need to do your research in looking at investing on the Gold Coast strip. A close friend has just sold his unit because he was operating without approval.
He set up before approval was required, he is OCD about detail and it was beautiful. There are so many available units / houses out there that need to be approved and truly the pricing is so cheap now I cannot see how you would get return on investment as well as manage your costs. My friend was quoted $15000 as a fee to council.
I strongly suggest you look at the Airbnb community facebook pages and see the issues they are having.
Las Vegas has a similar market I believe and they have just regulated and the fines are eye watering.
I do plan to totally manage the properties myself, live very close by and also clean them myself to keep costs down, I want to treat it as my main business eventually, I realise I’ll have to work at first, but just want to get the first one going to generate some income.
Interesting you mention one bed set ups with sofa bed, is this because the cost of 1 bed apartments is much less to purchase?
I have also been considering a dual key apartment, so I could live in one side and rent the other
My other idea, was to buy a larger house with land and views - try to create a more ‘unique’ experience for the customer and rent the whole house as opposed buying a smaller unit.
He was in Southport. You will also need to look at the strata rules if you are looking at a unit and council rules with a house. Be aware that a single complaint can close you down!
We were at Southport a few weeks ago and didn’t pre book any accommodation although I had looked at airbnb. Ended up getting a 2 bedroom apartment across from the water for $198 in total. It was the last unit available so I think that is why it was cheap. The same place is $200 per night in the school holidays which is also cheap. We just needed to be close to a car dealership for a warranty issue. Coming back from Yeppoon last year in July school holidays for Qld and NSW and couldn’t get any accommodation. Ended up driving to Ballina. Our recent stay was short term in a holiday apartment. Had bacon and eggs for breakfast at a near by cafe for $4.80!!!
I have personally seen one host buy up a 4 room townhouse, and rent out individual rooms. He’s a superhosts with a fantastic location, and almost always booked 25 days each month, each room. He lives off his host income but that was just before Sydney introduced regulatory laws. I’m not sure how he is managing now.
A standalone means it’s easier to check in guests as you can always put an automated lock , there’s no key exchange problem with apartments which need security fobs to even operate the lifts. There’s also no neighbour problem as long as you can keep a close watch on parties and noise, like for example, installing a non-intrusive camera. You can automate the whole check in and check out and work a part time job to get by.
One bed setups have a much lower mortgage, and setting up a sofa bed allows you to compete with two bedroom setups. The price differential between a one bedder and a two bedder is way less than the mortgage differential, giving you more ammo to compete in the race to the bottom. But you have to consider the low capital gains potential of these shoebox units, which offer little capital growth.
I’d rather buy on the Sunshine coast near Maroochydore or Noosa. Less chance of schoolies. Or if on the Goldie around Tweed Heads and Coolangatta. Looking on AirBnB prices for a studio on the Goldie are about $75 and a bit more in Noosa. Given there are 300+ places on the site for the Goldie you will be marketing your place on price. Might be better to go somewhere in the hinterland with a proper house that stands out. Just my thoughts.
Given the crackdown on interest only mortgages by banks in Australia is that a wise move? Most of those mortgages are only for 5 years so there will be a lot up for renewal in the next couple of years. I imagine banks are pretty full up on I only mortgages for goldie apartments. I’d talk to a bank asap to see if it is even a starter.
Aahh Yeppoon. I lived in Rocky from 1972-75 and we were down Yeppoon every weekend at the sailing club. Last visited about 2003 with my parents and we stayed at the motel on the foreshore. It had changed a lot and was just the same.
