Insight

29.06.16  Local Buzz

 

How Airbnb is Shaping Sydney’s East

Sydney is in the top 10 cities worldwide for Airbnb, with 15,000+ rentals listed on their platform.

Short stays are increasingly popular – in fact, there are now more Airbnb listings in Sydney than there are in San Francisco.

With the average host in Sydney renting their property out for 28 nights a year and earning $5,400, there are lucrative opportunities for homeowners. While the majority of hosts rent out their whole home, about a third rent a room out.

In the eastern suburbs, it’s the tourist hub of Bondi that’s the most popular spot for Airbnb listings, but there are more than 5,000 Airbnb rentals at any one time across the eastern suburbs of Sydney. There’s even an ‘Air Butler’ servicing the east, organising key handovers and laundry services.

Most lucrative times of year (and busiest) to rent out a Sydney Airbnb:

  • New Years
  • Mardi Gras
  • Grand Final weekend

In the eastern suburbs, the average Airbnb rents for $163 a night. The most expensive rental is $4,999 a night, which provides boat accommodation in Woolloomooloo. The cheapest is $15 a night for a shared bedroom.

Government and taxation

The sharing economy was the subject of intense debate in 2015 and there are currently discussions ongoing in parliament around Airbnb and similar services, such as Uber. Regulation is a likely outcome.

Local councils have a significant role to play in Airbnb and regulation. In the past, threats of fines of more than $1 million have been issued by local councils to homeowners turning their property into a short-term rental (highly discussed case in Randwick). This is due to planning regulations often not permitting Airbnb-style accommodation.

Airbnb landlords will also still need to abide by strata bylaws when operating as a host in an apartment complex and blanket bans can, and have, been brought into place. (Note: Bridgeport, for instance.)

As with any type of rental, it’s likely you’ll need to pay tax on the income and you may be able to claim expenses. It’s worthwhile speaking to your accountant before opening your property up to an Airbnb guest.

As a landlord

Insurance policies may not cover if your tenant is subletting as an Airbnb – even without your knowledge. And many mainstream landlord’s insurance and general building and contents insurance policies will not cover Airbnb even when it is organised by the owner. Some policies are now starting to offer this cover, but homeowners should research their options beforehand.

Airbnb offers a “Host Protection Insurance” that offers up to $1 million USD for liability claims, including bodily injury and property damage, and a Host Guarantee of up to $1 million USD to cover damages and reimburse the host. But for homeowners with prestige digs – this figure won’t necessarily cut it when it comes to covering replacement cost for a home. It also doesn’t cover any shared or common areas and Airbnb themselves say it “should not be considered a replacement or stand-in for homeowners or renters insurance”.

Whether a tenant can be evicted for renting a property out on Airbnb without their landlord’s permission is yet to be tested in NSW. But in Melbourne, a new precedent has been set that suggests it is possible.

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