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[one-half]With the future of Strata AirBnB short-term letting still unclear in Sydney I urge all committees to get themselves prepared for a world where Airbnb stays and Council don’t enforce local planning restrictions on short-term letting.
Now short-term letting is deemed to be a negative for resident owners and the property price for the building. I believe that a proactive owners corporation could turn it into a massive positive and upside for the residents living in the building on a day-to-day and long-term property prices for everybody by increasing rental yields achievable by strata short-term letting.[/one-half]
Strata AirBnB Solution
When considering your solution to AirBnB and making it a positive for your building you will need to consider the fundamentals of your building including: size, location and mix of owner occupiers. To help you develop your solution I have broken down a possible solution by the size of your building.
LARGE STRATA BUILDINGS 150+
I believe that large buildings 150+ apartments could potentially partner with a property manager and find a balance.
If we compare to the Queensland apartment building model buildings can grant an exclusive license to a piece of common property I would suggest somewhere like a concierge desk in the lobby. This licence would give benefits to everyone involved, the building gives the rights to use common property to run a letting business and in return the property business will provide concierge services to all apartments in the building.
This provides owners with a concierge service valued at $80,000-120,000 per annum. This means your building will have either decreased strata levies or increased services to all owners. And the property manager will have an advantageous opportunity to grow a letting pool within and around the building and generate income directly from the investor owners.
A property price increase can also be achieved with short-term letting as apartments within your building have a much higher return on investment. And as with all investments a higher rate of return regularly drives a higher purchase price until the return on investment rate equals a competitive property in the area.
MEDIUM STRATA BUILDING 60-150
The short-term letting solution for a medium size building will be much more dependent on the amount of investor owners and the location of the building.
With the right mix of investors and location a property manager could also consider taking on a licence to operate a business and provide concierge service for a reduced period of time each week.
If not viable to provide a manned concierge an alternative solution is the installation of storage lockers and key storage system. This can provide resident owners with parcel delivery services in either general or cold deliveries and short-term letting tenants with an easy key access system.
I believe that any service or system that adds value to residents and the ability to increase rental yield should be considered by all buildings.
SMALL BUILDING under 60
Buildings under 60 lots will most likely need to introduce a lock box style system if they are embracing short-term letting. Although inner-city buildings with a high level of investor owners could also achieve a solution with an on-site property manager arrangement, if it can be financially viable to the property manager.
Where to Next with Strata AirBnB
No one is pretending the short-term letting Airbnb debate is anywhere near finished. Any arrangement of setting up a key box system or property manager on site will have its own unique set of challenges and discussions for every building. I simple suggest you start being proactive before you find a property manager running a business at the front of your building or in your visitor car parks and giving no value to the resident owners.
Steps in the process to be Strata AirBnB ready
1. Raise the discussion with the committee ~ it is reasonable to expect resistance
2. Engage a lawyer for assistant
3. Canvas potential on site property managers ~ evaluations their concierge skills and procedures are critical
4. Negotiate a suitable location on site
5. Negotiate conditions of arrangement ~ term, cost to either party, scope of works
