Opening your doors to holidaymakers is an easy way to make some extra money and meet interesting new people. Here’s our how-to guide
Need some extra cash? Here’s how to rent your home to holidayers
Could your home be a holiday rental? Who hasn’t heard of someone letting out their spare room for a week or two here and there to boost their income? Online booking sites like Airbnb and Bookabach make it so easy these days so you’d be mad not to, right?
Certainly Kiwis have embraced the idea of opening their homes to holidaymakers and travellers and many say they do it more to meet interesting people than to make money. In fact, the average Airbnb host only makes around $7000 a year, although in top spots like Queenstown you can earn a lot more.
And while the online booking sites make setting up as a host relatively easy, you still have to factor in possible costs such as increased insurance levies, tax on the extra income and even council fees in some areas. Keen to give it a try? Our Q&A will help get you started.
How do I find out what’s involved?
The internet is your best source of information. Most holiday home-booking websites have detailed information sections on what is required to let your house to visitors. Alternatively, talk to letting agents in your area or ask friends who have done it.
What type of homes and locations are the most popular?
If you live in a holiday hotspot close to a large town or city, you’re on the money. Even more so if it’s the Bay of Islands, Coromandel, Waiheke Island, Mt Maunganui or Queenstown. Other popular places for short-term holiday lets include Auckland, Rotorua, Hawke’s Bay and Taupo, plus ski towns such as Ohakune.
Beach houses, or those not far from the beach, are highly sought after but many visitors also want to explore city centres. Someone may need short-term accommodation close to the CBD for a work-related stay so if you have an apartment or house in inner-city Auckland or Wellington, for instance, it has excellent potential for either type of let.
Where will I go if my house is rented out?
If you enjoy relaxing at home during the holidays, it makes sense not to take any bookings for your preferred holiday period – unless, of course, you have a trip booked elsewhere or a friend with plenty of spare room.
On the other hand, if you want to make as much money as possible, it’s best to make your holiday let available during the peak periods. You could always rent something else in a less desirable location for a few weeks. One Waiheke Island homeowner moves to the local campground during the peak summer period so he can rent his house out.
How do I market my property ?
It’s all about providing information that will appeal to potential guests and this includes as many good-quality photographs as possible of the property and its surroundings. Online sites usually require a clear, concise description of the property along with information on who it is best suited to – couples, families etc – whether you allow pets, local amenities and places to visit.
Listing the price is essential and helps reduce enquiries from tyre-kickers. It’s a good idea to check out other properties in the area when you set your price. Think about whether you want to charge more for peak season, school holidays and public holidays. Some people also set a minimum length of stay such as two nights.
Should I use an agent?
If you’re fussy about who you’d like living in your house then you may want to manage the rental yourself. You’ll need to be reasonably thorough with your arrangements, including sending confirmation of the rental agreement in writing to guests, leaving emergency and repair contacts, and communicating expected departure times. A security bond is a good idea to cover you if there’s any damage.
All this can be handled by rental agencies, whether locally based or online, and because many are dedicated to attracting holidaymakers, they will probably generate more business than you could.
Most charge a fee of around 3 per cent and you choose the rental price. Companies such as managemyplace.co.nz specialise in managing properties that are rented through online websites like Airbnb. For a commission, they look after everything from listing photos and guest-screening to bookings and cleaning.
What is Airbnb?
United States-based Airbnb started in 2008 and now operates in more than 34,000 cities and 191 countries. It set up shop in Auckland in June 2015 and listings increased so rapidly there were 7000 within two months.
To create an Airbnb listing, like many other online holiday letting agencies, you simply fill in the details online on a profile page. The company handles all payments, including bonds, takes 3 per cent and sends the rest to you 24 hours after a guest books in.
There have been plenty of horror stories on the internet about Airbnb guests holding riotous parties, rifling through the host’s stuff or stealing credit cards. However, the company says its review system for hosts and guests is designed to help you avoid dealing with anyone dodgy. It also now protects hosts’ properties with a $1.3 million guarantee and includes them automatically in its insurance protection plan.
What regulations do I need to be aware of?
If you’re letting your home, or rooms in your home, to tourists through websites such as Airbnb and Bookabach, you are effectively acting as a landlord, says the IRD, so you will need to pay tax on that income, depending on the arrangements entered into. You can, however, claim expenses against the income. If you’re not sure about your tax obligations, the IRD advises people to get professional advice and seek information on the IRD website.
Apartment-owners who regularly rent out their place may run into opposition from other owners, the building manager and/or the body corporate, particularly if visitors are noisy and frequent. It pays to check this out beforehand.
Some local authorities, such as Queenstown-Lakes District Council, require a form of registration for providers of visitor accommodation and may increase your rates as well as monitor the standard of your lodgings. If in doubt, contact your local council for guidelines on holiday rentals.
Professional letting organisations will screen potential visitors on your behalf but if you are managing your own holiday let, you may want to do a background check on the applicants. Before you do any screening make sure you’re not breaking privacy rules. Check out the Privacy Commissioner’s website, privacy.org.nz, for guidelines.
How do I prep my home for a holiday rental?
Most online letting sites list what you should provide. This includes enough beds, couches and chairs for the numbers you’re intending to accommodate. Bedding can be included but some hosts ask guests to provide their own sheets and towels or use a hire service.
A reasonably modern kitchen with enough plates, cutlery and glasses for all guests is expected, as is basic cooking equipment, a kettle and toaster and ideally a barbecue. You should also make sure the bathrooms are equipped with appropriate toiletries. Make sure everything is in working order, including all appliances and the plumbing.
If you’re aiming at a particular market – families with young children, for instance – you could provide specific gear, such as cots, high chairs, bunk beds and, ideally, play equipment or beach toys. Coastal property owners might like to allow their guests the use of kayaks, paddle boards, beach shoes and even fishing equipment.
For rainy days, make sure there are plenty of board games, books, DVDs and music. For cold nights your guests may need extra blankets. Television, wifi or some form of internet access is pretty essential for most guests these days. You’ll also need a lockable space for any precious or valuable items you might have to leave in the house.
If you’re on tank water it’s important to ensure the tanks are full before guests arrive and your wastewater system can cope with extra use. Most guests will have little or no experience of either so, to avoid problems, leave clear instructions on the care that needs to be taken.
Last but not least, a welcome hamper with milk, tea, coffee and biscuits, or a bottle of wine on the table, will be sure to make your guests feel right at home when they walk in.
Words by: Carol Bucknell. Photography by: Maree Homer/Helen Bankers / bauersyndication.com.au