Properties benefiting from high tourist traffic flow locations and offering a range of facilities may seek holiday letting as a means of earning a higher return. At the same time owners of holiday let properties may enjoy the use of the property themselves from time to time. The question is somewhat of a personal preference, and something of a return on investment dilemma. For suitable properties Asset Management can offer a superior short term letting service drawing on extensive experience in the area and knowledge of the current market.
Not all properties will be suitable, and as a small business we do focus our energies where we can be most effective. As such for a property to suit holiday rental we first identify the likely occupancy and daily rate that could be achieved. The average daily rate “ADR” is in inverse correlation to occupancy. That is setting a higher rate will lead to a lower overall occupancy level and vice-versa. Maximising the return requires achieving the optimum balance, and may be partially dependant on your personal preference. We can opt to seek high value bookings, or maximise bums in beds. One thing that is for certain is short term letting is seasonal and does not offer the regular recurring and reliable returns of permanent letting. For this reason you may be surprised to learn lenders are often reluctant to offer mortgages against properties that are leased short term.
If the projected returns of a property favour short term letting there are a number of considerations to be given before engaging a property manager. The frequent turn over of guests requires attentive and diligent supervision. Your property must be both protected from tenant neglect and maintained for future enjoyment. The cleaning and maintenance that takes place between each guest stay is critical. A competent property manager is paramount to the long term success of your investment property. The product mix, that is the features available at the property, will also determine your properties success. Typically a property manager will ensure Foxtel and wifi internet are available, the gardens professionally maintained, pool cleaning, chemicals balanced and regularly measured as required by legislation, the BBQ gas bottle is kept full, just to name a few. Maintaining this mix will ensure your guests enjoy their stay, rebook, and recommend the property to friends. Finally there is the marketing mix, the channels used to advertise your property. AirBnB stormed onto the market and quickly established itself as the worlds largest provider of room nights. This fame is largely built on the back of room sharing, which is not the goal of holiday letting. Accordingly traditional sites still remain critical to your advertising and all need to be maintained and inventory kept up to date. Overlooking this can lead to double bookings or mist opportunities. Experience in this dynamic area is also a requirement when selecting a property manager. Finally it is important to remember the impact of short term lettings on your council rates category, and insurance cover.
If you are considering holiday letting contact our office to discuss your circumstances