Airbnb has a huge market in NZ and Kiwi’s take pride in our high standards of hospitality – in fact we are a country with one of the highest ratios of Superhosts in the world. The benefits of being an Airbnb host are myriad but as tourism and hospitality in New Zealand have sadly come to a halt we wanted to take a look at the options for Airbnb owners during this time.
Times have changed as Kiwi’s rush home from overseas, people are displaced with the changing face of work, changes in personal circumstances and property owners who had planned to move back into their houses who are no longer able to give notice under the new legislation. All these factors have created another (less settled) market and it’s this market that might suit the Airbnb stock that is now readily available, plus with an influx of ex-pats returning to New Zealand, the extra supply of mid to long term rental properties is also something we need to consider as this has certainly increased throughout Canterbury.
Could it work for you? It may seem like a big commitment, however you could initially offer the property short term for 3-6 months and then review after this time. Or you may prefer to secure a tenant for a year and have that stability – each property owner has their own goals and aspirations.
As an example I am currently dealing with the owner of an Airbnb property, she has in fact only just purchased it and has not even had her first clients booked in! We are talking through the best outcome for her. She lives in Australia, and is hopeful that if the impending trans-Tasman bubble does come to fruition, it may mean there is once again demand for Airbnb property, however in the interim it is important for her to capture some income. The solution? – advertise the property as available for rent for a minimum of three months, and a maximum of six, and see who comes out of the woodwork! As we are all aware we are working through very uncertain times, and being flexible is likely to be the real key to success here.
The returns of an Airbnb property can potentially be high and ideal for investors when the New Zealand markets are at their peak, but for now it may be advantageous to put your investment into the safe position of a short, mid or longer term rental. Even if it is just to help you bridge that gap until the market picks back up again a longer term tenancy might still suit you.
Will your property comply with Residential Rental legislation? In most cases, yes! Just a reminder to check you meet minimum standards for insulation and smoke alarms. Just as a side note, if the tenancy commences prior to 1st July this year, and concludes prior to 1st July 2021, the property will not need to comply with the upcoming Healthy Homes legislation, only the current smoke alarm and insulation requirements, plus of course all other Residential Tenancies Act legislation.
The majority of tenants looking will likely be fully established and have a household of belongings so might not want a fully furnished property. Why not advertise the property as furnished or unfurnished and see what response you get? A large net catches many fish and in this market you want to explore all avenues. A secure tenancy, with regular income, may make it worthwhile to move and store the chattels from your Airbnb.
Bridging from short term stays to longer tenancies doesn’t need to be a dramatic upheaval. It’s simply a new chapter in your investment story.