As a homeowner or landlord in Australia and New Zealand, maximising the profitability of your short-term rental property is crucial. With the winter season upon us, keeping your property occupied and profitable all year round can be challenging.
In this article, we will explore hybrid letting strategies that utilise short and medium lets to help you maximise your rental property. Understanding the benefits of these strategies and how to implement them effectively ensures that your property remains profitable throughout the year.
According to the 2021 Census, close to 31 per cent of all households rent their home in the private rental market in Australia. With such a significant portion of the population relying on rental accommodation, homeowners and landlords must stay ahead of the curve and implement effective strategies to maximise profitability.
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The Challenge for Short-Term Rental Hosts in the Winter Season
Short-term rental hosts in Australia and New Zealand face several challenges during winter. One of the main challenges is the decrease in demand for short-term rentals during the colder months. Decreased demand can result in lower occupancy rates and reduced profitability for rental property owners.
Another challenge is the competition from other short-term rental properties. With the rise of platforms like Airbnb, there has been an increase in the number of short-term rental properties available on the market. This means that rental property owners must work harder to make their properties stand out and attract guests.
To overcome these challenges, short-term rental hosts must implement effective strategies to keep their properties occupied and profitable all year round. One such strategy is the hybrid letting strategy, which combines short and medium lets to maximise occupancy and profitability.
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What is a Short Let?
A short let is a type of rental agreement where a property is rented out for a short period, typically ranging from a few days to a few weeks. Short-lets are commonly used for vacation rentals, where travellers rent a property to stay in a particular location.
Short-lets offer several benefits to both the property owner and the renter. For the property owner, short-lets provide a flexible way to generate income from their property without committing to a long-term rental agreement. For the renter, short-lets offer a convenient and cost-effective alternative to staying in a hotel or other traditional accommodation.
Short-lets are typically furnished and equipped with all the necessary amenities, making them an attractive option for travellers looking for a home-away-from-home experience. They are also popular among business travellers who need temporary accommodation while working in a particular location.
What is a Medium Let?
A medium-let is a rental agreement where a property is rented out for a medium period, typically ranging from a few weeks to a few months. Medium-lets are commonly used by people who need temporary accommodation for an extended period, such as those who are relocating to a new area or working on a short-term project.
Medium lets offer several benefits to both the property owner and the renter. For the property owner, medium lets provide a steady source of income for an extended period without committing to a long-term rental agreement. For the renter, medium-lets offer a more cost-effective and flexible alternative to signing a long-term lease.
Like short lets, medium lets are typically furnished and equipped with all the necessary amenities. They offer renters the convenience and comfort of a home-away-from-home experience while providing the flexibility to move on when their rental period ends.
The Hybrid Letting Strategy
A hybrid letting strategy is a rental strategy that combines both short and medium-lets to maximise occupancy and profitability for rental property owners. By utilising both rental agreements, property owners can ensure that their property is occupied all year round, even during periods of lower demand.
For example, during the peak tourist season, a property owner may choose to rent out their property as a short let to take advantage of the high demand for vacation rentals. During the off-season, when demand for short lets decreases, the property owner may switch to renting out their property as a medium let to ensure that it remains occupied.
By implementing a hybrid letting strategy, rental property owners can enjoy both the flexibility and high returns of short lets during peak season and the stability and steady income of medium-lets during the off-season. This can help maximise profitability and ensure that the property remains occupied all year round.
Exploring Short and Medium Letting Platforms in Australia and New Zealand
In addition to implementing hybrid letting strategies, property owners in Australia and New Zealand have access to various short and medium letting platforms that can help maximise the profitability of their rental properties. These platforms connect property owners with travelers seeking short-term accommodation, providing an excellent opportunity to attract a wide range of guests and generate consistent rental income. Here are some popular short and medium letting platforms to consider:
- Airbnb: Known worldwide, Airbnb allows property owners to list their homes, apartments, or rooms for short-term rentals. With a user-friendly platform and a large user base, Airbnb offers excellent visibility and potential for bookings.
- Booking.com: As a global online travel agency, Booking.com features a diverse range of accommodations, including short-term rentals and serviced apartments. With its extensive reach and user-friendly interface, it can help attract a wide range of travelers.
- HomeAway: HomeAway is a vacation rental marketplace that connects property owners with travelers seeking short-term accommodation. It offers a variety of property types, including homes, apartments, and cottages, and provides exposure to a global audience.
- Stayz: Stayz is an Australian-based platform that specializes in holiday homes, apartments, and cottages available for short-term stays. It caters to domestic and international travelers, making it a popular choice among property owners in Australia.
- TripAdvisor Rentals: TripAdvisor Rentals is part of the well-known travel website TripAdvisor. It allows property owners to list their homes for short-term rentals, leveraging the site's reputation and extensive user base.
- Agoda Homes: Agoda's platform includes a selection of vacation homes, apartments, and villas available for short-term rentals. With its focus on Asia, Agoda can attract travelers from different parts of the world.
- Expedia: In addition to hotel bookings, Expedia offers a range of vacation rentals, including short-term stays in apartments and homes. Property owners can benefit from Expedia's wide customer base and global reach.
- Bookabach: Bookabach is a New Zealand-based platform that specializes in holiday homes and baches (beach houses) available for short-term rentals. It focuses on connecting property owners with travelers looking for unique and memorable accommodation experiences.
- Bachcare: Bachcare is another New Zealand-based platform that focuses on managing and renting holiday homes and baches across the country. With its local expertise, Bachcare provides tailored services to property owners in New Zealand.
- Corporate Keys: Corporate Keys specializes in medium-term rentals for corporate travelers. Property owners can list their fully furnished apartments on this platform, targeting business travelers seeking comfortable accommodation during their stays.
In conclusion, as a homeowner or landlord in Australia and New Zealand, it’s essential to implement effective strategies to maximise the profitability of your short-term rental property. One such strategy is the hybrid letting strategy, which combines short and medium lets to ensure your property remains occupied and profitable all year round.
By understanding the benefits of short and medium lets and how to combine them effectively, you can make the most of your rental property and ensure its long-term success. We encourage all short-term rental hosts to consider implementing a hybrid letting strategy to maximise their profitability and stay ahead of the competition.