Owners chasing the highest rental returns or seeking more flexibility that what long-term tenancies offer are transforming a mix of properties – in a city not known for its tourists – into Airbnb cash cows.
An increasing number of Hamilton property owners are renting their properties out short-term as they take advantage of the shortage of accommodation available due to most of Hamilton’s motels being used as emergency accommodation.
And demand for accommodation in the city is high as popular events such as Fieldays, the Women’s World Cup and the large number of rugby games are drawing people in.
Lodge salesperson Chase Gray said it was a “huge” trend at the moment where people were buying properties and, instead of renting them out long-term, were putting them on Airbnb to get the best return.
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Gray said the properties were anywhere in the city including Hamilton East, Chartwell, St Andrews and Pukete and ranged from to two to four bedrooms.
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A four-bedroom home in Pukete was listed on Airbnb for $320 a night, providing the owner with a good return on investment, he said,
“If your occupancy rate is at 70% you are getting an extra $300 or $400 a week on top of the rent and all you have to do is go change some sheets and do the washing so it’s a pretty good return.”
The landlords he knew who were doing that had not bought the properties with the intention of renting them out on a short-term basis, but had just fallen into it.
“In Hamilton all your motels are filled with emergency housing so people in Hamilton aren’t wanting to stay in those motels and are looking at Airbnb as more alternative accommodation.”
This quirky apartment on Durham Street in Auckland is solidly booked out on Airbnb for the next few months, but the property is also on the market for sale. Photo / Supplied
Harcourts salesperson Yvenna Yue said a client who was trying to sell her riverside rental property had just this week decided that she might pull it off the market and rent it out short-term instead.
“It’s a very hard market and they don’t want to lose money so they are thinking of moving to Airbnb.”
Another client has just bought an apartment in Hamilton CBD specifically to run it as an Airbnb.
“It’s really popular at the moment.”
Harcourts Hamilton Rentals manager director Melanie Rouse said with the cost of living hurting people, rising interest rates and tax bills coming up, people were looking at better ways to make money and Airbnb was one of them.
“There’s still a bit of a shortage in the city of property as it is – of residential rental properties in the city. When people come for events there really isn’t anything, so people see it as a good way of making extra money to cover their costs.”
Other property owners were opting to put their properties in the short-term rental pool while they were on the market in order to skip having to give notice period at the end and make it attractive to a wider buyer pool.
Properties with unique features such as being in a character building like The Guardian on Queen Street, in Auckland, make good Airbnbs. Photo / Supplied
“If you’ve got to give 90 days’ notice to a tenant lots of people aren’t going to wait 90 days to move into a property.”
There were also some properties near the university and hospital that were originally built as temporary accommodation and only had resource consents for tenancies up to 90 days. Some also had a limit on how many times a person could live in that dwelling in a year.
Rouse said the landlords had been just rolling the tenancies over every three months, but as a result of the city council now cracking down on these landlords many of these properties were now appearing on Airbnb
Auckland apartment owners were also switching some of their properties to short-term rentals in an attempt to capture all the overseas visitors coming in since the borders re-opened.
Apartment Specialists salesperson Rory Hunt said apartments with a unique point of difference, that were well presented and in a good central location made popular Airbnbs.
“It’s definitely something that we’ve seen as more of a transition and becoming more of a potential avenue for owners to explore in the apartment market for sure,” he said.
“The returns can be quite staggering compared to long-term rentals.”
A 26sqm apartment in The Mets character block on Durham Street is currently run as an Airbnb and has an occupancy rate of around 98%.
“It’s quirky. It’s in this old character complex. It’s got this mezzanine floor style layout and it absolutely cranks on Airbnb – the calendar is fully booked.”
Some apartments in The Guardian complex on Queen Street were also rented out short-term for about $150 a night and could be snapped up in the $200,000 price range.
A one-bedroom, one-bathroom apartment in the complex currently has an asking price of $219,000 and a two-bedroom, one-bathroom apartment in the same block is for sale for $480,000.
Hunt said size was less important when it came to short-term rental and instead it was about the location.
As well as the central city, apartments on the city’s fringe with parking were also popular with visitors.
But a downside to short-term rentals was the potential for vacancy periods.
During Covid some landlords had to quickly revert from the short-term to the long-term model when the borders closed, and their clientele effectively dried up overnight and many of those properties were now reverting back.
However, based on the current occupancy rates Hunt didn’t think finding people to stay was a problem, adding that the city had just come out of its busy season.
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