Short-term stays in the Sunshine State

Short-term rentals hold a strong appeal for many investors: they can bring in greater income than traditional rental properties, while also leaving the properties free for personal use as holiday homes or weekend retreats. With 2019 now behind us and 2020 underway, Your Investment Property's Tom Goodwin, spoke to Quirin Schwaighofer, co-CEO of MadeComfy, who points to both Brisbane and the Gold Coast as very strong markets for short-term rentals. With both benefiting from high demand from international tourism and domestic visitors.

“For example, we’ve seen accommodation demand in terms of listing nights booked in Brisbane grow by over 33% year-on-year from November 2017,” says Schwaighofer. “We’re expecting that growth trend to continue through this peak season as a result of the weak Australian dollar.”

The Gold Coast presents a number of opportunities for savvy investors, Schwaighofer notes. It’s always been a popular tourism destination for both interstate and international visitors, and this demand means that finding quality accommodation during the peak summer season can be challenging for holidaymakers. Couple with this theme parks and the close proximity of other attractions, and it’s clear why this is such an appealing destination for so many different demographics.

“We’re seeing high demand for different types of properties on the shortterm rental market, from apartments to houses that are located close to the CBD or tourist attractions,” Schwaighofer says. 

“We see ourselves as really facilitating these wider industry trends by providing an end-to-end property management service”

The best performance has come from hotspots in Gold Coast areas around Surfers Paradise, Main Beach and Broadbeach. It’s a trend you’d expect to see, given the area’s popularity for beach-based activities.

“With that said, anything near the water will always be very attractive for guests,” says Schwaighofer. “It’s warm weather for most of the year, so that means there’s still potential for beach holidaymakers even outside of the traditional summer beach season.”

Athough the appeal of the Gold Coast may seem more immediate, that doesn’t mean Brisbane should be overlooked; in fact it’s Airbnb’s thirdlargest market in Australia. The city’s infrastructure, reputation as a business hub, increased emphasis on cultural events, and easy-to-use public transport system all mark it out as an attractive destination for business travellers and holidaymakers. Combine this with the fact that it’s only an hour from the Gold Coast, and it’s easy to see why so many tourists choose to opt for a two-for-one trip.

“South Brisbane is by far the best performer, while the CBD and the properties in and around Fortitude Valley, New Farm, Kangaroo Point and Bulimba also have very high short-term accommodation demand,” says Schwaighofer.

Moving beyond the sleepover mentality

Of course, opting to move into the short-term rental space means being adequately prepared and having the right tools at hand. In wider Australian trends, there’s clear evidence that the shortterm rental market is maturing. Accordingly, there’s been a shift towards guests expecting a higher standard of accommodation and hospitality. Many properties now have a presentation that’s closer to a hotel or serviced apartment than the ‘sleepover’ approach that was originally associated with the industry.

“The budget and shared-home sector of Airbnb is still strong, but the fastest-growing segments are coming from travellers that would traditionally stay in commercial hotels and are seeking to book a brand like MadeComfy instead of staying with individuals,” says Schwaighofer. 

He suggests that guests travelling for work or business and older travellers are demographics that don’t want to compromise on amenities or cleanliness to save a few dollars. It’s a premium market within an industry that has tended to be associated with lowerbudget travel – but Schwaighofer notes that the onus is on property owners to step up their game if they are looking to continue to operate within this space.

“The short-term rental market is adapting to meet these needs, but we know many property owners do struggle to maintain consistently high standards, which is why they end up turning to us for help,” he says.

In tandem with these changing trends – and likely influenced by them – the industry is also facing increasing regulation. For example, the NSW government is currently planning to introduce a number of reforms within the space, such as a code of conduct, a cap on nights that can be booked for short-term rental, and a registrar of properties. 

“Anything near the water will always be very attractive for guests”

While owners have raised a number of concerns around these proposed reforms, much of this regulation is likely to be positive for the market overall. Schwaighofer believes it will aid in reducing negative conduct at both owner and customer level, making short-term rental safer and increasing consumers’ confidence that they will be getting what they paid for. Similar trends are likely to follow globally; for example, Airbnb is currently working to verify all of its listings around the world by the end of 2020, to ensure properties are accurately described.

“We see ourselves as really facilitating these wider industry trends by providing an end-to-end property management service,” says Schwaighofer. After managing many hundreds of investment properties, MadeComfy has extensive experience in the specifics of what methods will work best for individual property types in particular locations.

“We tend to get the best results when we handle everything ourselves and package it under the MadeComfy brand, which represents quality, consistency and our ‘wow’ factor. We set up the property, manage the bookings, set up a tailored pricing strategy, take professional photos and handle everything in operations,” says Schwaighofer. “This gives our customers the best chance of maximising the potential of their returns, as well as taking out all the hassle involved in managing a property.”

Schwaighofer points to a property in Broadbeach on the Gold Coast that MadeComfy works with as an example. A one-bedroom apartment just two minutes’ walk from the beach, it was already ideally placed for holidaymakers. Factor in the surrounding dining, drinking and shopping options, and it was a success story waiting to happen. But it was missing the X factor until MadeComfy stepped in and took over professional photography, dynamic pricing and marketing the property on Airbnb. Within a few months the property had a high occupancy rate of over 77% and saw an incredible 29% increase in net returns.

“The property is now generating higher rental returns than ever before, and the owner’s thrilled,” says Schwaighofer.

While MadeComfy doesn’t manage properties on a temporary basis, owners still have the option to reserve dates if they wish to stay in their own property. These sorts of arrangements can be carried out via the company’s online platform – the MadeComfy Dashboard – which also allows users to track the performance of their properties from a variety of online devices at any time.

“We also help open up your property to a wider audience,” says Schwaighofer. “As well as receiving strong bookings via Airbnb, we have an increasingly large number of guests booking a ‘MadeComfy’, either as return guests or businesses who have discovered the value MadeComfy is providing for their travelling employees.”