The short term rental accommodation market is booming, and the real estate industry is feeling the impacts. Recently, the industry has seen an increase in tenants illegally subletting a house or room to offset their rent, and in some cases pocketing rental returns, double what the properties’ owners earn.
Airbnb is one of the largest STR players in market, and now they have their sights set on long term residential rental services.
But can online accommodation-sharing site, Airbnb really disrupt the long term residential rental market?
The Australian real estate industry is highly regulated by the various State and Territory Governments. When property owners lease their properties to paying tenants, both parties are protected under the Residential Tenancies ACT.
But the STR market is a bit of a grey area, as properties are typically rented without a legally binding agreement in place. And often, property owners and tenants are not across all the legal issues of renting accommodation. So, when issues arise for either party, things can get ugly.
Given Airbnb operates as a central hub, it is virtually impossible for them to manage properties locally, let alone at scale. Airbnb simply provides the platform on which the property owner lists the property, regardless of the length of the lease. They are not property managers.
Should Airbnb be successful in creating an online marketplace for long term residential rentals, the responsibility still sits with the property owner or landlord to do the job of the property manager: market the property listing, set the rate, find a tenant, and manage the property, ongoing.
But the biggest difference between what property managers and platforms like Airbnb can provide, is tenant screening. Online, centrally managed accommodation sharing hubs do not have the ability (or qualifications) to properly screen potential tenants, which at the very least includes:
- Completion of Residential Tenancy Application;
- Run credit check;
- Run background check;
- Contact previous landlords;
- Contact the Tenant’s employer; and
- Interview the Tenant.
Extensive reference checking is paramount to securing a good, long term tenant and protecting your asset. And this is best handled by the professionals who specialise in property management.
Contact Stills Properties today for your FREE rental appraisal.
