There is no doubt that one of the impacts of the Covid-19 pandemic has been an increase in uncertainty in many areas of the property market. One specific area that has been affected is the short-term accommodation market.
Property owners around Melbourne who have serviced apartments or who offer their properties via online accommodation websites like ‘Airbnb’ have experienced an enormous drop in demand over the past few months. Clearly, people are staying home and isolating, rather than travelling interstate and overseas.
However, it is worth noting that this form of property rental has been experiencing issues that go further back than the arrival of the coronavirus. So the question that many property owners need to ask themselves is “Is Airbnb still a viable investment?”
A growing number of property owners have found that their investment in the short-term accommodation market has become increasingly risky. The inability to screen potential tenants before they arrive, the much-publicised wild parties and the potential for your property to be used for illegal purposes have all raised serious concerns for apartment owners around Melbourne.
Other issues that are less recognised, but still of concern, include the unplanned expenses associated with property abuse, overuse of utilities and the extra cleaning costs that are even more relevant in the current pandemic. Many lenders are also placing restrictions on owners who generate income via the short-term accommodation market. With additional service costs and management fees also taking it’s toll on returns.
With many strata managers also taking action to limit these types of tenants, this is an ideal time for property owners to reconsider their investment plan and to look at the longer-term rental market, whether as a furnished property or by selling or storing the existing furnishings.
Here at Ryan Property Specialists we are busier than ever and our team has been able to assist a number of landlords to achieve an easy transition with a minimum of disruption.
To furnish or not to furnish?
While there is some demand for furnished properties, this is a small segment of the market and property owners may find it more beneficial to on-sell their current furniture to one of the many staging businesses that are able to purchase full house or apartment lots. This gives property owners additional scope within the market, and while the furnished property makes for great rental photos, most of the rental market are looking for unfurnished properties at the moment.
If you are considering making a change in your property investment strategy, don’t hesitate to give me to discuss your options on 9899 6099.
Director – Ryan Property Specialists