Airbnb a real game changer for investors, says LongView's Evan Thornley

Love this article?
Republish this article on your website for free
Republish this article

Republish This Article

Feel free to publish this article on your website. We just ask that you do not edit the article and ensure that the author is correctly attributed! Just copy the code below into your CMS.

By copying the code below you are adhering to all our guidelines

Airbnb a real game changer for investors, says LongView's Evan Thornley

The financial benefit of an Airbnb property isn’t always clear cut to investors says Co-founder, investor and Executive Chair of LongView Real Estate, Evan Thornley, who believes that Airbnb may offer an opportunity to leverage higher returns than what can be achieved with a traditional rental.

According to Thornley, about 5 per cent of all the properties in Melbourne have the opportunity to make a better return if used as an Airbnb. However, the most important question investors need to ask themselves is if it makes sense to go into Airbnb or short term furnished.

“There are a lot more family and group travellers who want to stay in an Airbnb than there is suitable Airbnb’s in Australia. Therefore, when demand is greater than supply the price is driven up.

I purchased a small block of small art deco apartments in St Kilda, which was prime Airbnb territory. The apartments were, at the time, in traditional rent so we decided to move them over to Airbnb.

Within a year, I was getting more than 40 percent more cash in the bank each year than I was getting through traditional rent and that’s a lot!

The amount of money you can get per bedroom in a four bedroom house in St Kilda on Airbnb is about twice as much per bedroom for a two bedroom apartment in St Kilda. Therefore, investors have the opportunity to make about four times as much money in the house even though it’s only got twice as many bedrooms.”

- Evan Thornley, Co-founder, investor and Executive Chair of LongView Real Estate

Most investors and landlords assume that an Airbnb works best if it’s a small apartment located in the city.

Whilst this is true in some cases, unfortunately, a lot of these Airbnb’s are making the same return as those in traditional rent. This is partly due to the oversupply of small apartments located in CBD’s on Airbnb.

LongView have a very particular point of view when it comes to selecting the best properties to be listed on Airbnb, and it’s exactly not what most people think. In the right locations, houses, town houses and even whole small blocks of apartments is where the big opportunities lie with value for the investor.

Thornley says, there is a particular segment of travellers such as family and group travellers and unfortunately, there is very limited places for a large group to stay in. Whole families travelling together, two families travelling together, a group of people coming down for a wedding, a corporate group that are here for a project for three months.

There are very few places you can stay that give you all the benefits of an Airbnb, concludes Thornley.

The latest industry news on your website

Republish Urban content on your website

Republish this article
Note: Every effort is made to ensure accurate information is provided. If information is out of date, or factually incorrect, please get it touch so we can rectify. Urban accepts no liability and responsibility for any direct or indirect loss or damage which may be suffered by any recipient through relying on anything contained or omitted from our publication and platform. Opinions expressed by writers are that of the writer, and may not reflect that of Urban.
Are you a frequent user? Sign in or Register.