Holiday home-owning Kiwis looking to minimise the overheads associated with maintaining their recreational dwelling are cashing in on New Zealand’s booming tourism sector...
...and increasingly letting out their holiday hotspot properties through online accommodation booking websites.
Research data just out shows that holiday home-owners can potentially earn as much as $4200 a week by letting their holiday home through holiday accommodation websites such as Airbnb, bookabach.co.nz, nzholidayhomes.co.nz and holidayhouses.co.nz.
The research was conducted by Bayleys Real Estate. The company’s national residential manager, Daniel Coulson, said that property buyers purchasing secondary residences in ‘holiday’ destinations could easily factor in five-figure returns from their acquisitions.
“Tourism has overtaken dairy as the country’s biggest income-earning sector. The growth in short-term letting to holidaymakers and tourists has undoubtedly changed the commercial accommodation landscape - so it makes sense to align property purchases to growth locations,” Mr Coulson said.
“The increasing popularity of online accommodation booking sites with both domestic and international travellers offers holiday home-owners an opportunity to make their purchase work for them when not used as the owner’s personal recreational ‘bolt hole’.
“That income from guests can be used to offset the cost of maintaining the property, as well as covering council rates and insurance fees.”
There are more than 30,000 Airbnb and holiday home rentals in New Zealand. Airbnb’s New Zealand listings have more than doubled in the past 12 months to 20,000, while Trade Me’s holiday listings site, holidayhouses.co.nz, has more than 10,000 properties available.
Similar figures are viewable on bookabach.co.nz, nzholidayhomes.co.nz – although Bayleys research notes that many homes are listed across several of the accommodation websites simultaneously.
“By aligning a personal preference for purchasing a holiday home, with the key location ‘hotspots’ sought through the online booking sites, property buyers can look at which locations deliver the best returns from short-term lettings,” Mr Coulson said.
“As with any property-buying decision, factors such as the location of the residence – particularly its proximity to water – along with room configurations, amenities, and age of the premise, all play a part in establishing a market letting rate.
“The better these features are in a holiday home rental, the higher the lettable nightly or weekly rates.
“Our research also highlighted that seasonality was a critical element for those with an eye on rental income – with most seaside and lakeside rentals commanding their highest rates over the peak Christmas/New Year period of around December 23 through to the second week of January. Easter was also another spike booking period. “
Trade Me figures reveal the most popular locations sought on holidayhouses.co.nz are:
Meanwhile, Airbnb reports its most sought-after locations are:
The Bayleys research uncovered that most properties listed on holidayhouses.co.nz were rented out for 60 nights a year, with owners making on average $12,000 a year. Airbnb property owners rent out their residences for approximately 27 nights a year on average, although many have their properties available for up to three months a year. Rates in ‘prime’ tourist destinations can be up to $600 a night.
Holiday home landlords can set whatever rates they choose. For holiday home landlords with properties in Auckland, the average weekly earnings for a property let out to two guests is $796, while the New Zealand average is $674.
Trade Me reports its Auckland short-term accommodation booking ‘hotspots’ are:
“While rental yield is not normally a factor in determining where or whether to purchase a holiday home – as opposed to an out-and-out ‘rental’ investment – the opportunity to bank substantial revenue from the property is not something which should be overlooked,” Mr Coulson said.
”For those seeking to maximise every opportunity of property ownership, holiday home- owners could even derive extra income by letting out their main residence while staying at their bach.”
Mr Coulson said that choosing to buy a bach in locations with year-round visitor and tourist appeal - such as Queenstown or Taupo - would generate income across a broader calendar cycle rather than the peaks and troughs demand periods experienced in destinations such as Mount Maunganui, Martinborough and Napier.
“The third alternative is to buy a holiday home in a location which still attracts strong visitor numbers, but not to the same extent as the major destinations. For example, Gisborne, which experienced the largest monthly increase in visitor spending in New Zealand in 2015/16,” Mr Coulson said.
“The median house price in Gisborne is just $235,000. You could expect to rent out a property there on Airbnb at an average rate of $205-$258 per night. Spread over 60 nights a year, a Gisborne holiday home owner could earn at least $12,000.”
The Bayleys research identified that 75 percent of Airbnb’s New Zealand listings were outside the traditional hotel districts – predominantly located in the central business districts of Auckland, Wellington and Dunedin, with Rotorua, Taupo and Christchurch having their hotel districts in CBD-fringe locations.