Knowing what to look for when investing for short term rental in Cairns may be a little more complex than you think. At Cozie Homes, we have a lot of experience converting properties to be suitable for short term rental so here are our top tips for anyone looking at investing in property with the view to offer it as short term rental or holiday let.
1. Unit/Apartment or house?
One of first factors to consider when investing for short term rental in Cairns is whether you buy a unit or house. When looking at Cairns in particular, houses will likely appreciate in value more than a unit/apartment will so if you are wanting capital gains growth then a house may be the way to go. Houses also provide more avenues to build equity down the line, such as renovations and extensions. A unit/apartment, on the other hand, is much faster and generally less expensive to set up. Less rooms to furnish and no need for outdoor furniture or attractive gardens.
2. Budget when investing for short term rental in Cairns
Your budget is a large factor which could dictate whether you steer toward a unit or house. If, for example your budget is around $250,000, you will struggle to find a house that presents well enough, in an attractive location to attract holiday makers. On the contrary, this budget could secure you an attractive unit, close enough to the city centre to turn a great ROI on the short term market. From our experience, if you are looking to spend less than $400,000 on a property that will be successful as a short term rental, you will be looking at purchasing a unit.
3. Exit Strategy
It may seem counter intuitive to think of the end before the beginning but it is important to consider when investing for short term rental in Cairns. Will this be your retirement home? You may want to look at accessibility options if you plan to live there when you’re retired. Will you be selling in a few years? Short term rentals are a great option during the selling process. You can schedule viewings between bookings and the house always looks in top shape. Plus, you retain an income which takes the pressure off the sale. If you are looking to build equity, you might want to look for a house you can make some simple improvements or updates to. No matter which way you want to go, it’s best to have that in mind before you buy.
4. Who will your guests be in your short term rental?
When looking at properties, consider who you want your guests to be. Families with children make great guests as they generally have higher numbers, which you can charge more for. The property you are purchasing is likely to be in a family neighbourhood so if you have families staying, you can expect them to act appropriately. You’ll also need to consider if the property is safe for children. Is there a child friendly area where the adults can keep watch? Are there many stairs that older people would need to climb? It is fairly safe to say that, if looking at a house, families will be your target market, so choose appropriately.
On the other hand, an apartment in the city might be attractive to business professionals. Is there a laptop friendly workspace, is NBN available? Are there restaurants nearby? A couple might opt for a condo at the beach. Does it have a sea view and a nice balcony? A bath and large bedroom area? Think what you would look for in their position. If families are who you want, then you’ll be looking for something different than if couples or singles are your ideal guests! Determining this before you begin your search will save you a lot of time and hassle. It will also help you narrow down some of the other things you’ll need to consider on this list.
5. Location – where in Cairns do you want the property to be?
One important thing to remember is this is your property. Will you be using it yourself? One of the advantages of short term rentals is that it gives you this option. So what do you want when you take your holiday? With that in mind, think now who your ideal guests are, the next step is to decide which area to buy in.
Considering some of these things in relation to your ideal guests may help you decide on a location for your short term rental:
- How far to the Beach
- Distance to airport
- Transport to the city
- What does the rest of the street look like
- Access to bars and nightlife
- Distance to restaurants
- Proximity to appropriate activities
- Noise levels (families and elderly guests won’t want to stay near noisy nightclubs)
- Terrain – flat or hilly (elderly guests may not do well with uneven ground or hills)
- Accessibility – are there lifts or only stairs?
6. Parking and Transport routes
Whilst hiring a car in Cairns is very common for holiday makers, not everyone chooses this. If you are investing for short term rental in Cairns and there isn’t parking available then you want to be sure that your location is nice and close to the main area in that location. That means if it’s an apartment in the CBD, it needs to be walking distance to the esplanade. If the property is located in Palm Cove then you want to be walking distance to the beach and restaurants etc.
If your ideal guests are families, then parking is more likely to be a consideration. It can be difficult to walk far with young children so off-street parking should be on the wish list for your property. Many guests are disappointed to find there is no off-street parking, even if it is not listed as an amenity in the description.
Failing car parking, access to public transport may be something your guests might look for. In addition to that, checking where local tour companies will collect from may also be a factor to consider.
7. To Pool or Not to Pool when investing for short term rental in Cairns
Cairns is known for year-round pool weather – particularly to guests coming from colder climates such as Victoria or Tasmania. For this reason, a pool is a huge selling point for your short term rental. Whilst it may require a bit of extra maintenance, it will pay for itself when guests choose your property over a similar one without a pool.
When looking at pools, it is important to consider the general appeal of the pool too. Many pools in Cairns have the older, natural stone look, which is often less inviting to the eye than the clean blue look. Also the size of the pool will play a large factor in the cost to maintain. The larger the pool the more chemicals it will take to keep it pristine.
How nice it is to relax by the pool when you are enjoying a well-earned break?
8. Bathrooms – how many and what do they look like?
Have you ever been on holiday and checked in, only to discover that whilst the room was nice, the bathroom had you fearing for your health? Or maybe there was only one bathroom for 6 guests?
Short term rentals are no different. Ensuring there are multiple bathrooms for larger numbers of guests is vital. In addition to that, the overall look and feel of the bathrooms can be the deal breaker when guests are choosing a property.
Well lit, spacious, clean bathrooms that photograph well, will be much more enticing to guests. If your ideal guests are families then a bath tub and ensuite may also be selling points.
9. Facilities, Amenities and Chattels
Other things your guests may consider when choosing their property are:
- Laundry Facilities – particularly for extended stays or families
- Kitchen Facilities – fridge size, oven, equipment, dishwasher
- Gym
- Air Conditioning
- Wifi
Overall, your guests want to see that all the facilities, amenities and chattels are modern, clean and in good working order. All these things will help their stay be more comfortable which is generally what most guests are looking for in a short term rental.
10. Wow Factor when investing for short term rental in Cairns
Have you ever driven past a home and said, wow I wish I lived there? Needless to say, this home would perform well as a short term rental. It doesn’t need to be a million dollar home to have wow factor though. It can be curb appeal, a great view, a perfect entertaining area or huge spa bath. If you want to beat your competition for the booking, you need something to stand out from the crowd. Check out our current properties and the wow factor here.
Conclusion
At Cozie Homes, we do our best work to help you get your investment property ready for short term rental. Considering these 10 things BEFORE you buy can definitely save you money in the long run and ultimate improve your ROI, which is why most of us are in the game to begin with.
If you’d like some more personalised advice or a FREE short term rental appraisal before you buy your investment property, get in touch with us at Cozie Homes. We can help you every step of the way.