Airbnb: a numbers guide for Melbournians raking in the dollars
Just because someone lives in Toorak does not mean they are rolling in cash.
Some of Melbourne's most prestigious suburbs, with blue-ribbon price tags, are awash with room or whole property rentals for short-stays through online accommodation player Airbnb. New figures suggest even those living in Melbourne's dress circle are keen to pull in a bit of extra money.
The top 10 suburbs list is filled with the usual suspects - CBD, St Kilda, South Yarra, Southbank, Richmond, Brunswick, Fitzroy, Elwood, Carlton and South Melbourne - but it is the dominance of some of the city's most desirable real estate that may surprise. Toorak, Brighton, Albert Park, Hawthorn, Port Melbourne, Prahran, Windsor and Balaclava are among the 40 most available suburbs for a room or a whole apartment or house to rent for a few days. It contrasts the idea that most Airbnb hosts rent out a spare room in order to help pay off the mortgage or help with bills.
Across the City of Port Phillip, there are 1538 listings, 68 per cent of which are for entire houses or apartments, with an average overnight cost of $166. The south-east suburbs do well in potential takings per night, although there are some unexpected entrants:
Eaglemont - $388 Kooyong - $257.6 Hampton - $247.78 Middle Park - $225.1 Hampton East - $218.6 South Wharf - $214.88 Port Melbourne - $210.02 Sassafras - $208.2 (Yarra Ranges) Brighton East - $202.85 Gardenvale - $200.8 Kalorama - $200.44 (Yarra Ranges)
The new data comes from independent website Inside Airbnb, which has just published its first report on Melbourne, which reveals that while hosts in certain suburbs can make a mint, in many areas it is perhaps not worth the effort.
The data shows for the first time not just where properties are located, but whether it is the whole house or just a room, how often they are rented, and which properties belong to hosts with multiple listings.
Airbnb declined to comment on the data, but spokesman Dylan Smith said there are more than 10,000 properties listed in the greater Melbourne area and that listings have doubled every year since 2009. He said 90 per cent of listings were outside Melbourne's CBD and Southbank.
The average income generated by Airbnb hosts in Melbourne was $7100 (equal to $19.45 per day) and was used by hosts to "pay down the mortgage, cover bills and household expenses", according to Mr Smith.
"Eighty four per cent of these hosts are listing their primary residence - the home in which they live," Mr Smith added.
Perhaps due to its growing popularity, Airbnb has taken off in popularity has had to fight several legal cases from body corporates and disgruntled apartment owners who have claimed that some short-stay properties are being used for parties and creating excessive noise.
In July, the Victorian Civil and Administrative Tribunal found in favour of short-stay operators, ruling that body corporations cannot make rules to ban the practice for stays of 30 days or less.
The long-running saga unfolded between the Docklands Executive Apartments, which leases 11 apartments in the Watergate apartment in Docklands, and other apartment owners worried about unruly behaviour, parties and property damage from transient tenants leasing via websites such as Airbnb and Couchsurfing.
Airbnb has been compared to ride-sharing multinational Uber as a "disrupter" of their respective industries and for removing the "middle man".
But renting our your properties is not an automatic way to make money; hosts also need to consider the tax implications, as income earned through hosting is taxable, according to the tax office.
The two companies have also recently appeared before a Senate inquiry into corporate tax avoidance, with Airbnb confirming it sends the 3 per cent booking fee it makes on every booking to its parent company in Ireland.
Insurance Council of Australia chief executive Rob Whelan says homeowners and would-be rental entrepreneurs should check with their existing insurer first if they are covered for peer-to-peer house sharing.
"Anyone thinking about renting a room or part of their home should know that they might not be covered for property damage and other losses that could happen as a result of renting it out to holidaymakers. Importantly, they may not be covered for public liability should a paying guest be injured on the premises."
TOP 10 MOST POPULAR SUBURBS
Melbourne, 965 properties. Average price per night: $160.55 St Kilda, 544 properties. Average price per night: $142.28 South Yarra, 436 properties. Average price per night: $141.64 Southbank, 367 properties. Average price per night: $183.68 Richmond, 283 properties. Average price per night: $162.79 Brunswick, 265 properties. Average price per night: $89.46 Fitzroy, 238 properties. Average price per night: $146.67 Elwood, 231 properties. Average price per night: $155.86 Carlton, 225 properties. Average price per night: $123.45 South Melbourne, 184 properties Average price per night: $189.52
How it works
- Hosts list their property/room on the site. Short-term tenants can search by city or suburb. Airbnb offers free professional photographs of the room.
- Airbnb takes a 3 per cent fee from the host and charges guests a service fee of up to 12 per cent on top of their booking fee.
- Host make arrangements to give guests access to the property and keys. Check-in is usually 3pm and check-out 12pm.
- Hosts can clean themselves, or add a cleaning fee.
- Hosts can choose how often their room or property is available but Airbnb penalises hosts who cancel reservations.
- Hosts and guests review each other. Those who receive bad reviews may struggle to rent out or find a room.
Originally published in The Age, January 17, 2016 Follow us: @theage on Twitter | theageAustralia on Facebook