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Last word on new short-term letting laws
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JimmyT
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18/04/2017 - 12:08 pm
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Actually, that heading is a bit misleading, if not wildly hopeful.  The NSW government is due any day to table its response to the Coure inquiry into holiday letting, the most prominent manifestation of which is Airbnb.

This morning Radio National ran a track about the proposed laws in which yours truly was quoted extensively.  Click on that link to listen.

But of course this will not be the last word on the issue.   Far from it. Parliament will have to discuss it and MPS will vote on it and, if recent history is anything to go by, Airbnb will pump millions into the advertising market to shore up their image of a friendly hug-fest that helps nice people to do nice things.

I saw a poster in the station the other day claiming that Airbnb helped some woman to pay her strata fees.  Nice for her - but who pays for the extra wear and tear from all the woman's visitors who neither know nor care about by-laws and building rules?

Grrrr!

Anyway, in the absence of a recent turn on James Valentine, you can hear me and some people who actually know what they're talking about on Radio National.

Oh, and I'm betting here and now that my prediction that the law proposed tomorrow (Wednesday April 19) will allow room lets but restrict whole apartment lets will be proved wrong.

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Listohan
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25/04/2017 - 12:32 am
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As an ungeared landlord of the same house in the inner suburbs in Sydney for over 40 years, it could be said I am here under false pretences. But the economics of property investment (for income rather than short term gain) must be the same for houses and apartments. Given the vacancy factor and other management issues, I cannot imagine how short term letting can ever be more attractive than catering to people who stay for years. Can someone please explain. What rent loadings apply to short-term whole apartment letting, to makes it attractive.

I should also say we have relied on short-term lets when travelling in Europe and plan on doing so again this northern summer. I would be very sad if authorities in Europe were prohibited from offering this service there.

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JimmyT
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25/04/2017 - 12:40 am
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Listohan said
Can someone please explain. What rent loadings apply to short-term whole apartment letting, to makes it attractive.

It depends where you are but if you are in an area that's popular with tourists, you can double your rental income by renting your property for eight months of the year to permanent residents then put tourists in for the summer months.

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Listohan
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01/05/2017 - 12:53 pm
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Fo

JimmyT said

Listohan said
Can someone please explain. What rent loadings apply to short-term whole apartment letting, to makes it attractive.

It depends where you are but if you are in an area that's popular with tourists, you can double your rental income by renting your property for eight months of the year to permanent residents then put tourists in for the summer months.  

Four month lease(s) to locals followed by a full house for the rest of the year? That does not sound attractive to an old time landlord when the management hassle free life of keeping a permanent tenant "permanently", even at a lower gross rent, is the alternative does not sound attractive.

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JimmyT
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01/05/2017 - 3:29 pm
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Apparently the part-year rent has been happening in places like Bondi for years. Logically you need 120 nights of occupancy at 3 times the normal rental to cover the same rent as you would get for a whole year.

You probably aren't going to get that  but if you can get 90 nights at 2.5 times the rent, allowing for occasional vacancies, and 250 nights at normal rates, that works out at 30 percent more per year.

Now if you are a passive property investor, that might not seem worth the hassle - although online agencies like Airbnb and ancillary services that hand over the keys, clean the units and change the sheets can make holiday letting a little too easy for some tastes.  

And while you are I would be more than happy to allow a tenant to live indefinitely in the property as long as they don't cause problems and will accept a modest rent increase in line with the CPI, there is a new breed of property investor out there.

These property "entrepreneurs" are looking to make whatever profit they can, whether it's by "flipping" new apartments before they've even set foot in them, turning the worst unit in the best building into a design showpiece or aggressively pursuing the maximum rental income by whatever means available to them, legal or otherwise.

They see that as their job, their right and their sure and certain route to wealth and a fantastic lifestyle played out on the social pages. They generally don't over-think the social consequences of grabbing their share of fame and fortune.

If that seems a trifle negative, the fact that rents in popular holiday areas have gone up  by up to three times the city average in the past five years must have a logical cause.  

The fact the rents in the suburbs just outside the popular holiday areas have also increased more than the rest of the city - and in the same time period -  would, logically be because of those higher rents in adjacent suburbs.  

What has happened in the past five years? One thing is that housing stock has been increased considerably through the construction of new apartment blocks in former industrial areas.

What else?  Well, I can tell you there's very little chance it's because people have been renting their spare rooms to rubberneckers from West Virginia.  So you have to ask what major force is there now in the rental market that wasn't there five years ago.

You do the math, as the Americans say.

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