Everything to know before you put your property on Air BnB
Everything You Need to Know Before Listing Your Property on Airbnb in Victoria
The short-term rental market is booming, with platforms like Airbnb offering property owners a chance to generate significant income. However, with this opportunity comes a host of responsibilities, regulations, and financial considerations. Whether you're a seasoned investor or a first-time host, this guide will walk you through the essentials of managing a short-stay rental in Victoria, Australia.
1. Understand Local Laws and the New Short-Stay Levy
Before you list your property, ensure you’re up-to-date with the legal requirements for short-term rentals in Victoria.
Victoria’s New 7.5% Short-Stay Levy
Starting in January 2025, a 7.5% levy will apply to short-term rental bookings in Victoria. This initiative, managed by Homes Victoria, aims to fund affordable housing.
For instance:
Annual Bookings Income: $10,000
Levy Payment: $750
Council and Zoning Restrictions
In addition to the levy, some councils impose strict rules on short-stay rentals, particularly in high-demand tourist areas. These may include limits on the number of nights a property can be rented each year or outright bans in certain zones. Strata or body corporate rules may also restrict short-stay usage in apartment complexes.
Action Points:
Check your local council’s guidelines.
Review your building's strata or body corporate regulations.
Ignoring these rules can lead to fines or legal disputes.
2. Calculate Costs and Potential Income
While short-term rentals often promise higher returns than long-term leases, they also come with additional costs.
Key Costs to Consider:
Airbnb Fees: Expect 3-5% of each booking to be deducted as service fees.
Short-Stay Levy: Deduct 7.5% of your gross bookings (from 2025).
Cleaning and Maintenance: Regular cleaning and upkeep between guests add up, especially with frequent turnover.
Utilities and Amenities: Costs for electricity, water, internet, and consumables can rise significantly with short-term guests.
Estimating Potential Income
Use tools like AirDNA to evaluate occupancy rates, average nightly rates, and potential revenue for your area. This will help you determine whether the financial upside outweighs the associated costs.
3. Prepare Your Property for Guests
To attract bookings, your property must meet guest expectations for comfort, cleanliness, and style.
Essentials for Success:
Furnishings: Invest in durable, easy-to-clean furniture, high-quality bedding, and a fully equipped kitchen.
Amenities: Offer conveniences like high-speed Wi-Fi, a coffee machine, and streaming services. Ensure safety measures such as smoke detectors and fire extinguishers are in place.
Professional Photography: Listings with professional photos tend to attract more bookings and higher rates. High-quality images can make a significant difference.
4. Manage the Time Commitment
Hosting a short-term rental is akin to running a small business. It requires time and effort to manage guest communication, check-ins, and property maintenance.
Options for Management:
Self-Management: Ideal if you have the time and are comfortable handling guest interactions, cleaning coordination, and emergency responses.
Property Management Services: Hiring a professional manager reduces your workload but typically costs 10-20% of your rental income.
To further streamline operations, consider implementing self-check-in solutions like keyless entry systems or lockboxes.
5. Tax Implications for Short-Stay Rentals
Short-term rental income is subject to income tax, but many hosting expenses are tax-deductible.
Common Deductible Expenses:
Cleaning services
Property insurance
Maintenance and repairs
Utility costs
Tip: Consult a qualified tax advisor to maximise your deductions and ensure compliance with Australian tax laws.
6. Broader Impact on the Housing Market
The rise of short-term rentals has had significant effects on Victoria’s housing market, leading to increased scrutiny and regulation.
Key Trends:
Impact on Rental Supply: Critics argue that platforms like Airbnb reduce the availability of long-term rentals, exacerbating the housing crisis.
Government Response: The introduction of the short-stay levy aims to address these concerns by funding affordable housing and encouraging property owners to return homes to the long-term rental market.
For property investors, these dynamics could influence future property values and rental demand.
Final Thoughts
Listing your property on Airbnb can be a lucrative venture, but it requires careful planning, an understanding of local laws, and a commitment to providing a high-quality experience for guests. With the 7.5% short-stay levy and other evolving regulations, staying informed is crucial to making the most of this opportunity.
By assessing the costs, preparing your property, and understanding your tax obligations, you can navigate the challenges of hosting and decide whether short-term rentals are the right fit for your property portfolio.
