Why you should Airbnb to pay off home loan
IF YOU are looking to help with your mortgage costs, why not join the growing number of Australians getting into the share economy by becoming an Airbnb host?
It can be a great source of second income without having to work extra hours in a different job.
There are all levels of hosting, from letting out your whole home, to just a single room. And, if you are not comfortable with strangers in your house, there are other share platforms where you can make use of empty storage space or even lend out your car for a bit of extra cash.
My wife and I were not put off by the thought of others staying in our property and were tempted by the idea of some spare funds to take care of a mortgage repayment or two.
Living in a popular beachside suburb, we knew there was demand for holiday accommodation in our area.
So, when we had a four-week overseas holiday coming up, we decided to put Airbnb hosting to the test, rather than leaving behind an empty potential money-maker.
Originally we took our own photos of our place to use in the listing but we then discovered that Airbnb would actually send a photographer to take professional snaps for free.
The professional photos turned out much better and made our place look more spacious. Next, we purchased a lockbox to store our spare keys in, acquired some cheaper bed linen for guest use and we were good to go.
Airbnb handles the admin side, charging the guests in advance and paying you the full amount 24 hours after the guest first checks in. This takes potential non-payment arguments out of play.
We were able to secure a 10-day booking in the middle of the period we were overseas.
Charging $200 a night at the time, we were able to pay for half the upfront costs of our trip.
Meanwhile, over in New York, we were staying in an Airbnb apartment in Manhattan for $170 a night … less than half the nightly rate of traditional forms of accommodation in the area.
After that first positive experience, we decided to keep our apartment available on the site and pick and choose which booking requests to accept.
We are lucky enough that our parents live in nearby suburbs and are happy to have us stay for a week or two here and there if we get a lucrative booking that we want to accept.
Our price in the warmer months is now $250 a night, which can mean a two-week booking puts more than $3000 extra into our mortgage.
It is a good way to make a little extra money here and there, with as much exposure to risk as you choose.
So far, we have only had one negative experience, which was when we leased our place to a group of young blokes - only to return home to find they had thrown cigarette butts and bottle tops off our balcony, while evidently partying there all night, as evidenced by the unused beds.
The neighbours weren't too happy but it could have been worse. Lesson learned.
Since that occasion, we have been picky when accepting or rejecting stay requests; keeping our guests to families or older couples.
There is also the added security blanket of Airbnb's host guarantee, where the platform covers your home and belongings from accidental damage, plus host protection insurance to protect you from liability in case guests are hurt or cause damage.
I would recommend signing up to Airbnb and giving it a go but also be aware of the tax implications. If you are using your own principal place of residence to make extra income, your home will no longer be exempt from Capital Gains Tax.
You will be able to get all the information you need around your obligations from your accountant.