AIRBNB IS HELPING MR.and MRS. AVERAGE IN BUYING OWN INVESTMENT.
Category : Insights
REAL ESTATE OWNERS TAKE NOTE
AND THOSE WANTING TO GET INTO REAL ESTATE
INVESTING AT AN ENTRY LEVEL.
Wow. Who’d have thought that renting your home or room could be so lucrative.
I created a mini backpacking chain along Sydney’s eastern suburbs beaches
from 1987 through to 2008. Ended up winning awards mainly because I packed
in so much quality giving the travellers a real away from home feel. The backpacking industry created capital gain in all the suburbs they were in. A lot of home owners twigged to the fact that renting their spare rooms out to travellers
gave them the extra bucks so the value of their investments grew and so did their selling
price for the property. How many of you know of friends or relations who rented out their spare room to a couple of students or travellers from 2005 onwards. This is before Airbnb started making inroads into accommodation.
And now Airbnb has become a force to be reckoned with. Its the sign of the times. We are living in a new world and in an era of DISRUPTION. Just like Uber the amount of alternatives in our every day lives has mainly come from our belief in the digital world.
WHAT CAN’T YOU GET OFF THE NET ANYMORE?
My SHOUT OUT today is
GET YOURSELF A CHUNK OF AUSTRALIA, ANYWHERE.
You might be surprised that you have some borrowing capacity, but if you don’t ask, you may never know. Find yourself a mortgage broker who listens to you and gives you just good simple plain advice. Don’t side with the banks so much, they have their own agendas and history tells us that they aren’t necessarily the right people to go to.
The article below should give you some confidence to at least start thinking about the possibility of taking the first step in owning your own piece of Australia land.
If you are on today’s average income…..THIS IS DOABLE.
DON’T BELIEVE IN WHAT YOU HEAR AND READ IN THE MEDIA.
“Today’s Daily Reckoning will show you why anyone calling for an Aussie real estate downturn is going to be wrong for the foreseeable future. In fact, it’s the complete opposite. There’s a potential bonanza on the table if you can pull off the right moves.
First we go to Queensland, then down to Tasmania, by way of Bondi. You’ll also see something that few Aussie real estate investors have seen in decades. You might want to consider putting this dynamic to work in your own portfolio.
You might already know what I’m about to say when it comes to the Sunshine State. The State Government up there has just put out its latest budget.
Lo and behold, there’s a bonanza of spending despite billions in debt on the books already. All that political waffle about cutting the debt down and slashing spending has gone out the window. There are marginal seats to be won! That means cash needs to be splashed.
Here’s a taste: the Queensland government is going to spend $10 billion this year on capital work projects across the state. A lot of this is going to regional areas.
Here’s the deal as far as we need to know: all of this will increase property values where these improvements go in.
The most notable thing on these infrastructure projects is the go ahead and extra initial funding for Brisbane’s new cross river rail line in the inner city.
There’s five new stations that go along with this. In total it will cost an estimated $5.4 billion. It will be finished somewhere between 2022 and 2024, depending on the source.
The windfall for any landowner who happens to own property within the surrounding area will be somewhere between 30–120% if past projects like this are any guide.
In London, hotspots near the new stations for its cross rail rose 30% as soon as it got the go ahead.
Some of this will have been priced in already no doubt as investors speculated on the rail network getting the final go ahead. I’m not familiar with Brisbane to say how much for sure. Further speculation will now give this type of property a further boost in the short term.
The biggest gains for infrastructure like this are usually prior to construction and after completion. Buyers get put off in between as the disruption and noise from the actual work done goes on. There’s usually an opportunity to take advantage of the price lull in between these two end points.
That’s up to you to think about. For our purposes today, it’s enough to know there’s so much construction scheduled for Australia that real estate can still run up.
And that’s before I even tell you about what’s happening in Tassie…
Airbnb is upending Aussie real estate
Tasmania’s second biggest lender MyState Bank says more investors are now letting their properties on Airbnb. That’s opposed to listing for long term tenants.
Annual rents for houses have risen 4% for houses and 12% for apartments, according to figures in the Australian Financial Review. It’s also causing a shortage of traditional rental accommodation.
Demand for houses and apartments on Airbnb is coming from the cracking rate of tourism going on down there.
This isn’t unique to Tassie. All of Australia’s most popular tourism spots are now seeing this effect.
Buyer’s advocate Catherine Cashmore is a friend of mine. Catherine actually reported on this last year. It’s crucially important. The economics of renting your property in the right Airbnb area smash having a long term tenant. Short term stays can pay you up to three times the normal rent.
I actually happened to be in Byron Bay last week. I stayed in an Airbnb! I was there for a photography workshop. At lunch I happened to meet a nice expat British lady who’d bought in Bondi about seven years ago.
She said Airbnb had been a great earner for her in recent years because she rented out her apartment when she went on holiday and back to Britain. According to her a lot more competition had come into Bondi in recent years from other Airbnb landlords.
But note the effect this is having. Almost all Australian property investment in residential stock is for capital gains. The net yield is lousy. Airbnb is changing this dynamic, and what my friend Catherine was trying to get across last year.
Airbnb has the potential to give landlords capital gains and positive rental income. This hasn’t been seen in Australia like this for decades. And with China’s middle class expanding by millions, we have the potential for the biggest tourism boom of all time.
Ignore these twin dynamics at your peril.”
If you need someone to talk to, no strings, email me and I’ll give you an unbiased view of how I see things and why you should be looking.