tmmonline.nz  |   landlords.co.nz        About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds

NZ's Financial Adviser News Centre

GR Logo
Last Article Uploaded: Friday, July 10th, 4:12PM

News

rss
Latest Headlines

Short stays big pays

It is now possible to make holiday rentals work for you by generating some great yields but with much less effort than ever before.

Monday, October 9th 2017, 7:00AM 1 Comment

by The Landlord

Airbnb is changing the way we holiday – and it’s changing the way we invest in property.

There’s been a revolution in recent years since Airbnb took hold in the local market, offering rooms and houses for short-term stays at well-below-hotel rates.

Increasingly, New Zealand investors are realising that short term holiday rentals have the potential to provide outstanding returns, albeit with higher costs and general uncertainty.

Experienced property investor Jonno (surname withheld) owns five small apartments in Auckland’s central city.

He bought them for capital gain but has always rented them out. 

When the lease on one of his apartments expired in December last year, he thought he’d give it a go on Airbnb to see what happened.

The booking rate enthralled him and he has since put his other apartments on Airbnb, following the expiry of their leases.

He said that he calculates his yields at a net 14% compared to a gross yield of 6% before – and his apartments only have to be occupied for 11 days a month to break even.

“From a cash point of view there are good days and bad days. You feel a bit anxious if you look 30 days out and there’s no action.

“But you can tweak the pricing, drop it by 20% a week and get some base bookings in until it’s back to market level and we’re away.”

There are costs – for setting it up and for professional management – and there is some uncertainty, but the benefits far outweigh the downsides, Jonno said.

His apartments are occupied between 80% and 89% of the year and he wouldn’t go back to renting them long-term.

“Because guests are also reviewed, they tend to be respectful of the property and rarely cause additional maintenance beyond the expected wear and tear.”

Many other investors are jumping on the short term rental wave and Kiwi Airbnb listings have taken off in the last few years.

Back in October 2014, there were 412 available listings and 154 booked listings. In April this year, there were 12,995 available listings and 11,097 listings.

To find out more about getting big pay from short stays, click here to get the digital issue of NZ Property Investor magazine.

Subscribe to NZ Property Investor magazine here to get great stories like this delivered to your mailbox every month.

 

 

« Free Investment Property Showcase Events: Auckland, Wellington and ChristchurchAppeal of former hot spots dims »

Special Offers

Comments from our readers

On 12 October 2017 at 2:54 pm JennyDaly said:
Just applied for a mortgage and got turned down. Would not take my airbnb 5 year history as income but only on a regular rental appraisal. Worth knowing.

Sign In to add your comment

 

print

Printable version  

print

Email to a friend
News Bites
Latest Comments
  • Greens want ACC extended to cover sickness
    “Never happen. The Greens are such an aspirational bunch. Must all the weed. They 'want' all sorts of unlikely things...”
    2 hours ago by All hat no cattle
  • Harking back to the old days
    “Really positive news. NZ has been blessed by many successful leaders and it is good that their skills can skill be utilised...”
    8 hours ago by Francis L
  • Harking back to the old days
    “I dare say Cigna just got that extra grunt it's been looking for....”
    9 hours ago by Matron
  • Greens want ACC extended to cover sickness
    “The Greens have no idea The purpose of the Woodhouse report was to remove the "at fault" component of accidents Sickness...”
    1 day ago by LNF
  • Commission disclosure: What's material?
    “The consumer should know that there is at times large amounts of comission involved but it has to be balanced with not confusing...”
    1 day ago by Good Hamish
Subscribe Now

Mortgage Rates Newsletter

Daily Weekly

Previous News

MORE NEWS»

Most Commented On
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA 4.55 3.19 3.19 3.49
AIA Special - 2.69 2.69 2.99
ANZ 4.44 3.15 3.25 ▼3.39
ANZ Special - ▼2.55 ▼2.69 ▼2.79
ASB Bank 4.45 3.19 3.19 3.49
ASB Bank Special - 2.69 2.69 2.99
Bluestone 4.44 4.44 4.44 4.44
BNZ - Classic - 2.65 2.69 2.99
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
BNZ - Std, FlyBuys 4.55 3.25 3.29 3.59
Lender Flt 1yr 2yr 3yr
BNZ - TotalMoney 4.55 - - -
China Construction Bank 4.49 4.70 4.80 4.95
China Construction Bank Special - 2.65 2.65 2.80
Credit Union Auckland 5.45 - - -
Credit Union Baywide 5.65 4.75 4.75 -
Credit Union South 5.65 4.75 4.75 -
First Credit Union Special 5.85 3.35 3.85 -
Heartland 3.95 2.89 2.97 3.39
Heartland Bank - Online - - - -
Heretaunga Building Society 4.99 4.35 4.45 -
HSBC Premier 4.49 2.60 2.65 2.80
Lender Flt 1yr 2yr 3yr
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 3.99 2.58 2.68 2.79
Kainga Ora 4.43 3.29 3.39 3.85
Kiwibank 3.40 3.40 3.54 4.00
Kiwibank - Capped - - - -
Kiwibank - Offset - - - -
Kiwibank Special 3.40 2.65 2.79 3.25
Liberty 5.69 - - -
Nelson Building Society 4.95 3.45 3.49 -
Pepper Essential 4.79 - - -
Lender Flt 1yr 2yr 3yr
Resimac 3.49 3.45 3.39 3.69
SBS Bank 4.54 3.29 3.19 3.49
SBS Bank Special - 2.79 2.69 2.99
The Co-operative Bank - Owner Occ 4.40 ▼2.69 ▼2.75 ▼2.99
The Co-operative Bank - Standard 4.40 ▼3.19 ▼3.25 ▼3.49
TSB Bank 5.34 ▼3.35 3.49 3.79
TSB Special 4.54 ▼2.55 2.69 2.99
Wairarapa Building Society 4.99 3.75 3.99 -
Westpac 4.59 4.15 4.09 4.49
Westpac - Offset 4.59 - - -
Westpac Special - ▼2.55 2.69 2.79
Median 4.55 3.19 3.22 3.39

Last updated: 10 July 2020 9:02am

About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox
 
Site by Web Developer and eyelovedesign.com