AirBNB vs Standard Rental

The financial results.

We’ve had an AirBNB townhouse in Sydenham for three years. With rents on the rise in Christchurch and what seems to be dwindling AirBNB demand (we suspect due to more hotels coming into the market), we decided to analyse the data from last financial year, to determine whether AirBNB is still a good option for us.

As a standard rental, the income for this two bed, one bath property would be just over $20,000 pa (including 5% vacancy). To compare options, we’ve ignored or adjusted any expenses which would apply to both types of investment (For example, no allowance for depreciation and insurance cost shown is just the additional price of a commercial policy versus residential landlord cover).

Here are the actual results:

REVENUE
AirBNB income $31,000
Income from other platforms $7,500

Total income $38,500

EXPENSES
Internet $1,200
Cleaning $6,800
Power $1,600
Insurance $1,000
Breakages $1,400
Consumables $900

Total expenses $12,900

NET INCOME = $25,600

So on the face of it, this self managed AirBNB appears to be worthwhile, making an extra $5,600 pa. The yield has increased from 4.8% to 6.1%. Not a terrible result.

It is worth noting, however (and this could be a game changer for you), this is a self managed property, with no value given to the time spent. AirBNB is a lot more work than a standard tenancy!

If we were to have this property managed, we’d be up for $1,600 pa standard, or $4,600 AirBNB. That brings the financial advantage of the AIrBNB to just $2,600 pa, in a market which appears to have a diminishing return.

Gareth Webber. 
Christchurch Property Investors Club

Once I understood how the Property Investors Club made their money and that they are industry-funded (just like Mortgage Brokers) I realised they were on my team and the trust began.

David Bluck

Waimairi Beach

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