With a severe shortage of affordable long-term rental accommodation across the country, it’s understandable that the ethics of real estate investors renting out homes in the vacation rental market are being questioned.
As a former owner of a short-term property management business, it is often automatically assumed that my own ethos is one that uncompromisingly supports the wants and needs of real estate investors. But the reality is quite different.
I see property – in any form and especially in the current housing crisis – as a privilege, not a right. And with this privilege must come responsibility, humility and contribution.
The widespread myth that putting your surplus properties on the short-term rental market is the quickest and easiest way to make money is, ironically, shooting the industry.
The reality today is that many popular vacation destinations are now at a saturation point, which means nobody wins.
Take Byron Bay for example, which is estimated to have the highest concentration of short-term rentals of any LGA in NSW.
As of April this year, there were 43 long-term residential properties advertised for lease in the Byron region. At the same time, there were 2,013 entire home rentals with active listings on short-term lodging sites.
This is a ratio of one long-term rental for every 47 vacation properties.
In Tasmania, where there has been a huge increase in holiday properties open, there are currently 818 short-term rentals in the central Hobart region.
In this same area, there are 163 long-term rentals on realestate.com.au. That’s a healthier ratio of one long-term rental for every five vacation rentals, but it’s still disproportionate.
These situations are simply not sustainable in the long term, financially or otherwise.
If an area is occupied with vacation properties, it generally loses the appeal it once had for tourists. If essential hospitality and cleaning staff cannot afford to live in the area, businesses struggle to find staff and end up going out of business. And the more competition there is, the less profit they make.
They are also not good for our community or the planet. Therefore, introducing regulations to limit the number of vacation rentals makes sense from multiple perspectives. Government incentives to accommodate victims of natural disasters and emergency scenarios is also something that should always be supported.
That’s not to say, however, that all short-stay accommodations are bad, and demonizing Airbnb only polarizes the debate.
When managed well by hosts, high-quality short-stay accommodation can fuel the local economy, create employment and energize the community, as long as it’s done in a conscious and sustainable way.
At the moment there are many multinationals that make more money than the ‘small’ one.
Airbnb itself has increased its rates exponentially in recent years, to the continued anger of the host population that ultimately favors it.
There are also too many people managing multiple properties with the sole aim of making a profit, and without regard for the real quality of the property, what it gives back to the community, how it encourages inclusion and allows those with diverse needs to travel more wide opportunities, without forgetting their impact on the environment.
His days are seriously numbered.
Based on an influx of anecdotal evidence, market saturation in many areas and the general economic downturn are starting to bite and many hosts are reporting “low” to “no” bookings.
The hosting businesses that will survive are those that have a real vision and purpose, beyond the quick profit generation model of the past.
That’s why I created Hosting with Heart. It’s a directory of accommodation and property owners who ‘give a shit’ – about the environment, the local community and our diverse population, including the nearly one in two of us who have a disability or chronic illness .
Currently, less than 5% of all available holiday accommodation in Australia is considered accessible. This is not good enough.
A growing number of hosts are looking for a return to direct bookings, avoiding multinationals. But with big players like booking.com and Airbnb dominating the landscape, they need an alternative.
Running a short stay accommodation is hard work, physically and mentally. It is not for the faint of heart or the fickle. You have to be willing to tolerate an increasingly entitled and demanding guest market and take comments on the chin. A few poor comments can really damage your viability – you need to develop some kind of armor.
If you want to do well, you have to have your heart in it, and with your heart in it, I believe you can really make a difference and at the same time cultivate a sustainable long-term income stream without compromising the ethics .
And if the host population is gradually reduced to deepen those who meet the above criteria, I think the long-term rental market will naturally open up as a result, meaning increased housing options for those who do not own and better quality escapes for all of us.
Jen Clark is a former Airbnb host and founder of Hosting with Heart
Read related topics: AirBnB