At the risk of quoting myself too extensively, I have been discussing in the forum why some people might find letting their homes as holiday lets worth the additional hassle, compared with residential lets.
I put forward the economic argument motivating those who let their properties via online agencies during the peak holiday months, then go back to residential when the tourists have gone.
Apparently the part-year rent has been happening in places like Bondi for years, long before those cool dudes blew a breath of air into their SanFran airbed and changed the world.
With the potential to earn an additional 30 percent or more on top of a residential rent by turning properties over to holiday lets for three or four months a year you can see why some investors would turf their tenants out every year, as soon as the first bikini appeared on the beach.
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 another 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 or aggressively pursuing the maximum rental income they can get by whatever means available to them, legal or otherwise.
They see that as their job, their right and, for some, 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 tenants escaping the higher rents in the 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.
Meanwhile we can add another handful of tricky questions to the countless issues plaguing Flat Chatters:
- Is an apartment pool “public” when you have Airbnb lets in the building? That’s HERE.
- Who gets to view the videos when you install CCTV? That’s HERE.
- What do you do when Strata Committee “enforcers” intimidate dissenters and vandalise their property? That’s HERE.
- How do I get rid of a vindictive and obstructive chairperson? That’s HERE.
- Whose responsible when lot owners witnessed departed tenants damaging common property and the landlord wants the owners corp to repair it? That’s HERE.
By the time you read these, there will be even more curly questions from the social and political maze that we call strata.