Homestay better than long term rental?

homestayIf we could earn RM1,000 per week by renting out your current property, would we do it? I would, of course. As per an article in TheStar, quoting numbers from AirbnB, the RM1,000 per week may be more real than a dream. Take a look at the image. The lowest happened on the list happened to be Kota Baru Kelantan but the rest of the usual locations I normally visit, from Langkawi to Melaka and Cameron Highlands means that I would have been pretty wealthy if only I had a property in these places. I think this is a sign for me to think a little more seriously. I have been thinking way too much instead of actions. Yes, I have told my wife about owning an apartment / condo in Langkawi, Melaka and Cameron Highlands.

Coming back to the possibilities. RM200 per apartment / condo per night for a family of 4 and renting out just 4 nights out of 7 per week is already RM800 per week. Note that RM200 is only enough for a 3-Star hotel room for 2 pax per night. No wonder hotels all around the world has started to complain against AirBnB. As of now, I am still relying on hotels more than AirBnB. Sometimes, the home that I like, the owner is either new to the renting business or did not have much reviews. I am a little more cautious too as this is an individual whom I do not know much about. A hotel meanwhile is already an established accommodation provider.

What about possibilities of taking care of these rentals by ourselves? Well, it’s not that easy. We need to somehow pass the key and explain the house rules, followed by inspection and cleaning up for the next guest. If we have just one apartment or condo, it is clearly not sustainable even if it’s RM800 per week which is only RM3,200 per month. No doubt, RM3,200 is by far higher than the usual monthly mortgages but I do not think we will do this full-time. I think it’s best to find an agent who can do this for us and agree on a deal with them. Yes, I sort of know the rates that these agents charge and I think it’s still worth it even if they are not the owners of the home. As of now, I am nowhere near these kind of rentals yet. Perhaps I should try it out if any of my tenants do move out in the near future. Will update.

written on 5 July 2016

Next suggested article:   Sell to buy more or keep getting rental surplus?

7 thoughts on “Homestay better than long term rental?

  1. Tried it AirBnB once in Bangkok, don’t really enjoy it, room is too small, no bfast provided. For the hotels owner, they still have many advantages which AirBnb don’t have.

  2. Tried it AirBnB once in Bangkok, don’t really enjoy it, room is too small, no bfast provided. For the hotels owner, they still have many advantages which AirBnb don’t have.

  3. I have discussed this with a few friends who wanted to sublet under AirBnB. I myself have stayed in AirBnB in HKK, India, Jakarta and Australia. Yes the money is good. Better than renting long term or at least yearly basis. AirBnB are all short term stays. They can range from 1 day to a week, mostly for tourists. During changeover, you have to do general clean up( the tourists won’t do it). From bedsheets, blankets, towels and body detergents and shampoo topping up etc can be a hassle for owners. Receiving guests at all hours and undetermined waiting and briefing of house rules require the presence of the owners or the representative to be there. It is almost a full time job.

    There is no way, your place will have 100% occupancy, you would be happy to have 60 to 80%. The additional income is meant for you to do lots of cleaning and changing of bedsheets/blankets and towels and briefing of guests all the time. Unlike a one-year lease or more tenant, you need not have to do all these.

    Some countries have laws against AirBnB as these are under categories of commercial property like service apartments, motels and hotels etc. Residential properties can be rented out for longer duration. In Singapore, the laws require residential properties to be rented out for at least six months. So the normal condo, apartments or houses under category of residential may breach the laws of the host countries when they are rented out under AirBnB.

    • Yea, actually there are lots of work behind every night that is rented out. In terms of the money, it won’t be that high because most probably I will get someone to manage it and thus the profits are shared. Too low, they won’t do. Too high, not sustainable. Haha. AirBnB is starting to be made illegal in some countries because there’s no regulations for this kind of ‘sharing’ business yet. As at now, I use hotels 90% and AirBnB 10%. No idea if it will change more in the future. I do feel that AirbnB for developed countries are okay. Maybe just the trust issue. Thanks Frederick! Like your on the ground sharing.

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