The Airbnb listings generating much more than pocket money. These are the listings making a motza
FROM an Ikea sofa generating $8000 a year to a luxury Sydney home making close to $250,000, Airbnbs are proving a massive money spinner for Aussies.
FAR from merely earning owners a bit of extra pocket money, Airbnb properties are generating tens of thousands of dollars for savvy Aussie homeowners with a spare room or couch.
Despite a recent report commissioned by Airbnb showing the average income for Australian hosts was under $5000, detailed analysis by Airdna showed the estimated revenue for a spare room in Sydney was $18,472 in the year to March.
In Melbourne it was $16,115, in Brisbane it was $12,172, in Perth it was $11,604, in Darwin it was $10,258 and on the Gold Coast it was $9088.
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For properties with four bedrooms or more, average annual earnings were $107,607 in Sydney, $86,705 in Melbourne, $72,792 on the Gold Coast and $63,945 in Brisbane.
Even an “Ikea sofa bed” in an apartment between the CBD and Sydney Airport earned the owners $7276 in the 12-months to March, and an “amazing lounge room” in Melbourne returned $9592.
According to the data, Australia’s most lucrative Airbnb listing for the year, was a five-bedroom house at Palm Beach in Sydney, estimated to earn owner Lynne Champion $249,508 a year.
Ms Champion said the data seemed to be based on year-round occupancy but was “probably accurate”.
“I’m one of the more expensive places but I try really, really hard to do the best job possible and the reviews are glowing,” she said.
“I’ve been an entrepreneur my whole life, and for me Airbnb is a way to have a business but not be caught up in all the paperwork for the government, filing BAS statements, dealing with workers’ comp and all that.”
Her returns were maximised by doing all the cleaning herself, Ms Champion said.
“Because people are staying in a beautiful home, they respect it and most people leave it immaculate,” she said.
“I’m very proud of my home and I love to share it with people.”
Despite the higher earning capacity, large homes like Ms Champion’s accounted for only six per cent of Sydney’s Airbnb listings.
At 38 per cent, private rooms were much more prevalent as homeowners sought to turn a spare bedroom into a money-spinner.
Andy and Hanako Goy of Kallista, near Melbourne, decided to list their spare rooms on Airbnb just over a year ago, with great results.
“We had this beautiful house for just the two of us, so it’s a bit of extra income for some space we don’t use,” Mr Goy said.
“The income has been more than we expected but it’s only been just over a year.”
The Airdna data ranked the Goy’s Kallista “luxury mountain retreat” as the top earning private room in Melbourne with an estimated $40,098 return.
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But Airbnb Australia Country Manager Sam McDonagh said substantial incomes for hosts were not typical.
“In fact the average income for hosts across Australia is just $3,700 a year,” Mr McDonagh said.
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“While this doesn’t sound like a lot, our hosts tell us this helps them take a holiday themselves, reduce the mortgage, cover bills and household expenses.
“Across Australia, three quarters of our listings are outside the traditional hotel areas, so guests can live more like a local and experience Australia’s diverse neighbourhoods and regions, outside of the regular tourist hot spots.
BOOSTING AIRBNB INCOME
AN easy way to increase rental revenue is by adding a fold-out couch and temporary sleeping accommodations. One bedroom makes 20 per cent more if it can accommodate four guests instead of just two.
As hosts get more experience they tend to increase cleaning fees and remove security deposits. Act like a pro and remove any additional fees outside of cleaning.
Enable Instant Book — Airbnb gives preferential treatment to properties with instant book enabled. It means less haggling; more prominence in search results and a better performance overall.
The majority of “super hosts” have a strict cancellation policy. Start with a flexible cancellation policy and change it to strict after receiving 10 reviews. Cancellations can kill profitability.
Host responsiveness is the single most important determinant of successful Airbnbs. It has been proven to be the largest influencer of booking conversions, Airbnb search placement and overall listing views. Those who can’t respond to all messages within an hour are advised to sign up for an external service to help manage inquiries.
Amenities considered “must-haves” differ from city to city.
Melbourne, guests rank a kitchen, heating, Wi-Fi, and washer/dryer most highly.
Sydney, must-haves include a kitchen; Wi-Fi and washer-dryer.
Gold Coast the only “must-haves” are a kitchen and washer/dryer.
Darwin, must-have amenities include a washer/dryer firstly, followed by a kitchen and airconditioning.
Perth, a kitchen, washer-dryer, Wi-Fi and heating were ranked in the “must-have” category.
Brisbane must-haves included kitchen, washer/dryer and Wi-Fi.
MONEY FROM SPARE SPACE
TURNING unused space into an Airbnb may prove to be one of the best decisions Andy and Hanako Goy ever made.
The couple’s “luxury mountain retreat” at Kallista, was rated the top-earning private room in Melbourne by analytics company Airdna, pulling in $40098 in the year to March.
Given private rooms accounted for 38 per cent of all of Melbourne’s 12,074 active listings on Airbnb, that is no mean feat.
“It’s a bit of extra income for space we don’t use,” said Mr Goy.
“I don’t know how they came up with that figure (of $40,098) but the revenue has been more than we expected and it’s only been just over a year.”
He said the personal touch was the most important factor in a successful Airbnb and he and Hanaka were always there for guests at the beginning and the end of their stay.
“We give people a lift to weddings if needed, and provide the best quality bakery food,” Mr Goy said.
“It’s also a fantastic location and a lovely design.”
More than half of their guests were either going to nearby weddings or getting married themselves, he said.
“That was something we hadn’t even thought of — our proximity to major wedding venues,” said Mr Goy.
“But it’s been a big source of guests, and has worked out very well.”
Melbourne was second only to Sydney in terms of the number of active Airbnb listings.
The Airdna report estimated even “shared rooms” were earning hosts an estimated $8288 a year, rising to an income of $86,705 for large four bedroom-plus properties.
The city’s Airbnb occupancy rate was 62 per cent, with peak periods of demand around major sporting events like the Australian Tennis Open, the Boxing Day cricket test, the AFL Grand Final and Spring Racing Carnival.
Airbnb Australia Country Manager Sam McDonagh said substantial incomes for hosts were not typical.
“In fact the average income for hosts across Australia is just $3,700 a year,” Mr McDonagh said. “While this doesn’t sound like a lot, our hosts tell us this helps them take a holiday themselves, reduce the mortgage, cover bills and household expenses.”
He said three-quarters of Airbnb listings were outside traditional hotel areas so guests could live more like a local and “experience Australia’s diverse neighbourhoods and regions”.
There are an estimated 115,000 Airbnb listings across the country.
FATHER AND SON DUO
ALAN and James Moody are Perth’s most successful Airbnb hosts, according to data compiled by analytics company Airdna, with their Ascot mansion returning an estimated $92,143 a year.
The father and son bought the six-bedroom house overlooking the Swan River last year, with the intention that James would move in, next door to Dad Alan.
But work forced James to move and in order to cover the mortgage, the house was listed on Airbnb.
“The traditional lease arrangements under the current laws would’ve made things very, very hard if we had a problem tenant,” said James, of the decision to list on Airbnb.
“The Airbnb set-up offers more flexibility, and we have a lot of control over who goes in and out.”
He said the current laws provided more protection for tenants than landlords — which he understood and accepted.
“My point is, the way in which we operate with Airbnb, it’s a short-term contract with us and whoever is using the property and they accept the terms,” said James.
“We had to apply to the local council to get planning permission to use the property so we had about four months of the house being vacant.”
The expectation was the house would return between $9000 and $10,000 a month with Airbnb, with a listing price of $650 a night.
“Over November and December, we were booked for 60 out of 61 days,” James said.
“It can accommodate up to 12 people and it’s handy to the airport and shopping precincts.”
Other successful listings in Perth included a “Beachfront Penthouse & Huge Terrace” at Scarborough which made an estimated $83,335 in the year to March, and a five-bedroom South Perth Retreat at Kensington that returned an estimated $77,552.
Citywide, there were 4349 “active listings” on Airbnb according to the Airdna data.
Private rooms accounted for 42 per cent of the listings in Perth, followed by two-bedroom properties.
Even a fold-out bed in a lounge room was earning hosts an average $7271 a year, the data showed, while owners of large homes like the Moody’s could expect to earn an average $58,449 a year.
But Airbnb Australia Country Manager Sam McDonagh said substantial incomes for hosts was not typical.
“In fact the average income for hosts across Australia is just $3,700 a year,” Mr McDonagh said.
“While this doesn’t sound like a lot, our hosts tell us this helps them take a holiday themselves, reduce the mortgage, cover bills and household expenses.”
James said the formula for operating a successful Airbnb was pretty simple.
“As long as you go out of your way to keep people happy, you should succeed,” he said.
“We’ve done quite well in relation to the property — it’s a pretty flash joint. It’s definitely one of the higher end properties I’ve seen on Airbnb.”
GOLDIE DREAM HOME
A GOLD Coast “dream home” was Queensland’s best performing Airbnb in the year to March, raking in an estimated $132,880 in revenue to narrowly beat a sprawling retreat at Brookfield in Brisbane.
Data provided by Airdna, showed the six-bedroom Currumbin family beach house earned owner Holly Hohn an average $777 a day thanks to its beachfront position and size.
In second place was a massive Brookfield property which slept up to 16 and generated $132,232 for the year.
Ms Hohn said she hoped to eventually live in her dream house but at the moment it suited her family better to live in Brisbane.
“My children need specialist medical care and it’s better to be close to that in Brisbane than drive back and forth from the Coast all the time,” said Ms Hohn.
“Short term rentals provide a better return than a longer term leasing arrangement but it does mean more work for me, checking on the property every week.”
The Airdna data estimated the average annual income from a large Gold Coast property listed on Airbnb was $72,792 while people renting out a spare room on the homesharing site could expect to make about $9088.
In Brisbane the returns on a spare room were better at an average $12,172 a year and a large house with four bedrooms on more, generated an average $63,945.
Ms Hohn said the figures did not account for other expenses for homeowners such as cleaning, security and insurance.
“Without the extra income I wouldn’t be able to cover the mortgage,” she said.
“It does make life a bit easier and because it’s short term rentals, we can use the house when it’s not rented which is nice.”
Other standout Airbnb performers in Queensland, were a “stunning five bedroom waterfront home” at Broadbeach, which earned an estimated $117,660 a year, and “The Point — another luxury waterfront home” at Sanctuary Cove, worth $117,494 a year.
Even an “amazing sofa bed three minutes to the beach” on the Gold Coast earned the owner $4567 in the year to March, and a luxury room with a pool view at Broadbeach, renting for just $75 a night returned $12,145.
One of Brisbane’s biggest money spinners was a two-storey serviced apartment in the CBD — earning an estimated $70,842 a year.
But Airbnb Australia Country Manager Sam McDonagh said substantial incomes for hosts were not typical.
“In fact the average income for hosts across Australia is just $3,700 a year,” Mr McDonagh said. “While this doesn’t sound like a lot, our hosts tell us this helps them take a holiday themselves, reduce the mortgage, cover bills and household expenses.”
A Deloitte Access Economics Report commissioned by Airbnb, found $441 million was spent on homesharing by 2.1 million people in 2015-16, or an average $119 a night.
The report released last month, estimated the average return for hosts was $4920.
Originally published as The Airbnb listings generating much more than pocket money. These are the listings making a motza
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