Home for the holidays: perks and pitfalls of letting out your house

Perhaps we were greedy, but the idea of recouping a proportion of a massively expensive holiday seemed like a good idea. We expected to spend thousands of dollars on AirBNB houses and flats during a protracted holiday in Europe. We’d done it before, and it had worked out well. We’d even come to like the strange quirks of living in someone else’s house: the odd selection of novels to read, the diaphanous dress left hanging in the wardrobe, the shower nozzle that required a certain touch to get started.

Of course, there were a few niggles over the years: the apartment in the Veneto which seemed to have one fewer bedroom than advertised, and the house in Sri Lanka that came with a large and unadvertised German Shepard type dog which turned extremely unfriendly when politely requested to stop barking. Not to mention the promised wifi in Venice that remained no-fi for our entire stay, and the sonic-boom traffic noise in the ground-floor Hobart flat. Still, on the whole, a worthwhile endeavour.

We’d used Uber, and stayed in people’s houses both here and abroad, and even had a couple of abortive tries with Airtasker, the odd jobs sharing website. Weren’t we part of the new internet sharing economy with all this ultra-modern website booking usage? So why not let our slightly shabby three-bedroom Sydney semi in the eastern suburbs to some deserving Sydney visitors and recoup some of our sharing outlays?

The AirBNB phenomenon has spawned a whole understorey of enterprises happy to help you let your property via sharing websites, those like Stayz and even Tripadvisor as well as AirBNB. These booking management companies promise to take the anguished calls from your AirBNB guests at three in the morning when your hot water heater explodes. They say they will meet the guests on arrival – if it’s during business hours. They will make sure your keys are returned, the beds in your home are made with fresh sheets (which, depending on the company, they provide), and the place kept clean and tidy between guests’ visits.

And, of course, they take a hefty commission to cover these services – according to one quote, which we eventually accepted, 20 per cent of the rental earnings. As well as an upfront fee of more than $200 for a photographer to come and take a suite of photos to show the house to the best possible advantage on the various websites. And an initial so-called “deep clean”, to the tune of $246, before the first guest even arrives. (This clean might not have been so deep though – one of the guests complained in her AirBNB review that although our house was beautifully located, it was “dusty” and “grubby”.)

Then the incidental costs come marching along. A lock box for the keys in case the guests arrive at night ($60, and that’s before it’s bolted to the wall). Adding to the list of little extras were three new sets of keys (less than $20 but they had to be cut, paid for and delivered to the property managers). New quilts (we use woollen blankets), along with four pillows with pillow covers (that live under the pillow cases), for each bed. All this bed equipment is expensive.

Then, and this is not required, but obviously desirable, some kind of locking mechanism like cable ties to lock up cupboards or pantries or even a locking door knob on a small room, to stash lots of clothes, shoes and handbags, as well as laptops, computers, and anything else that needs to be tidied out of the way of guests.

Lastly, a special insurance package that includes public liability cover, in case the guests fall down the stairs and sue, or slip in the bathroom and sue, or set fire to the kitchen. This is over and above standard house insurance, which doesn’t cover these kinds of housing lets, and apparently compulsory, according to the management contract. This kind of insurance, especially for this kind of holiday let, might cost round about $6-$10 a day for a three-bedroom semi in Sydney’s eastern suburbs. NRMA has a deal especially for this sort of paying guest arrangement – it’s called ShareCover, and it can be sorted out on-line.

In the end, there’s a fair chunk of upfront cash needed for these various bits and pieces. And the weekly earnings weren’t that much more than the amount we earned when we let the house unfurnished and full-time on a six-month lease, and then we didn’t have to pay for electricity, gas or the internet, the agency commission, or indeed, the special insurance.

Our semi was let on the internet via AirBNB and using a management company for about $1250 a week (compared with an ordinary six-month lease in 2014 that earned us $900 a week).

Of the 33 days our house was available it was let for 27 (not a bad batting average), and earned a grand total of $5409. Once commission, insurance, cleaning and other costs were deducted, we eventually reaped a total of $3109, depending on whether the new pillows and so on are considered costs.

By the time we got back to Australia and returned to the workaday world, we had hauled in some much-needed cash, and someone had been in the house most of the time, warding off would-be intruders, and maybe alerting the fire department if an electrical short set the washing machine on fire – not that it did, but you can’t be too careful.

The results of our internet letting experiment were mixed. The house was pretty clean, and someone had even left us the bonus of a collapsible cot and child’s chair, not that we have children. But there was a bit of hassle en route, and the management company people weren’t the best communicators.

Would we do it again? Sure. Tidying and organising and sorting was a drag, but who can argue with $3000?

You get what you pay for

After two decades in the travel industry, Charlie Chohilli decided to start an accommodation-sharing website along the lines of Airbnb but with a subtle difference. The homeowners who list their properties on his new site, Aabode (aabode.com), pay no commission. Chohilli, who has recruited about 1000 owners to list their properties, says his firm can afford to do without owners’ commissions because automation and computerisation keep overheads low. “I’ve been in the (tourism and hospitality) business for a long time and I know how and where we save costs for guests and travellers,” he says. “We’re passing the benefits of all these savings to guests and property owners.”

It can be difficult to compare accommodation websites because they work in different ways and offer varying services and structures, plus differing audience sizes and levels of trustworthiness. But, very roughly, homeowners who let out their properties for short-term rentals are expected to fork over between zero commission (as per Aabode) and as much as 20 per cent of the total income.

Market leader Airbnb (airbnb.com), with millions of visitors, charges property owners between 3 per cent and 5 per cent, a commission automatically deducted from the final payment to the owner. The giant Booking.com (booking.com) charges property owners about 15 per cent but notes that the fee entitles owners to a broad range of services, including marketing support and content translation.

By comparison, Stayz (stayz.com.au) charges a standard 7 per cent commission and up-market Alluxia (alluxia.com) charges 10 per cent.

Hometime (hometime.io) charges 16 per cent, but this extra fee includes managing guest bookings and communication, welcome amenities, housekeeping and maintenance.

MadeComfy (madecomfy.com.au), with similar extras on offer, charges 20 per cent.

Absent property owners with security concerns could take advantage of My Home Watch (myhomewatchcom.au), an outfit that looks over the rented-out house or apartment at agreed times, waters plants, puts out rubbish bins, takes in the mail and even checks for pest infestations — all for a fee, of course.