The past months have seen a noteworthy disruption to the short-stay accommodation market as a result of the COVID-19 pandemic. Social distancing, travel bans and home isolation have been cited as primary causes for the mass cancellation of short-term bookings, resulting in a loss of income for many property owners and hosts.
At ThinkProperty&Co, we’ve had a number of enquiries from short stay accommodation hosts seeking advice on how to navigate the changing market. This month’s blog unpacks some tips on adjusting to the ‘new normal’ of leasing your investment.
At this moment in time, we advise short stay hosts to enter the traditional rental market on a more permanent basis, converting their Airbnb offering to a long-term rental. Rather than continuing to risk losses associated with short stay vacancy, mitigate your losses with a formal lease. Once you resume receiving regular income for your investment property, you’ll then be in a better position to gauge whether that asset still works in your portfolio (which is the bigger concern for many landlords, overall).
The bad news is that fully furnished short stay leasing could now a thing of the past. While short stay leasing has become more demanding and less rewarding for many capital city hosts globally, COVID-19’s eruption may herald the end of the golden era of the share economy. Organisations such as Airbnb and Stayz – connecting short stay guests to fully-furnished host acommodation – have been profoundly compromised by the pandemic. As a result, investors are now attempting to return to the traditional leasing market or to offload assets which no longer provide strong returns.
We’ve observed that tenants are either downsizing or searching for less expensive properties, themselves attempting to mitigate high outgoings during a difficult moment in history. This desire to reduce living costs is a reflection of the current economy, and the resulting rise of unemployment amidst a global lockdown. The good news for landlords? Apartments – as opposed to houses – are now in demand from tenants.
At TP&Co, we have been focused on guiding landlords to consider their ‘long game’ – weighing up their options and encouraging them to be strategic around property marketing and presentation. In some cases, this means removing furniture from fully-furnished residences to widen market appeal. This includes planning ahead, and advertising a property within two weeks of being vacant.
A recent media release from AccomNews Australia addresses the stress faced by short term stay hosts, stating:
‘The Commonwealth and National Cabinet controls to stem the spread of the virus are welcomed by ASTRA but it also has grave concerns for its members who have been “substantial financial contributors to the Australian economy and rely on rents to stay afloat”. Unlike other landlords, those who offer STR will not have the reassurance of delayed rent.‘
ThinkProperty&Co remain on-hand to support all investors through this turbulent time. We urge you to contact us for professional advice relating to your short stay rental property. Get in touch today to organise a phone or video consultation, where we will assess your circumstances and break down the best options available for you.
Let’s stick together, and make this time #BetterForEveryone.
P: +61 3 9416 1708 / E: hello@thinkpropertyco.com