Have you been sitting on the fence about renovating properties with the purpose of renting them out on a short-term basis? What’s holding you back? Short-term holiday rentals can be a great property investment strategy, resulting in wealth-building profits.
Mary and Lilah Nieuwland, a mother and daughter property investment team, joined Bernadette Janson on She Renovates to talk about their short-term holiday rentals portfolio and why it is a profitable strategy.
Mary and Liliah have a three-pronged approach to property, including renovating homes for the purpose of Airbnb, renovating to sell for profit, and managing Airbnb properties. Their current portfolio includes four short-term holiday rental properties, five completed renovations, and two renovation projects in the pipeline.
How Mary And Lilah Nieuwland Became Successful Property Investors
The mother-daughter team’s journey began when they signed up to The School of Renovating. Our education, guidance, and support gave them the knowledge and confidence they needed.
Additionally, the support from our community helped them through challenges and celebrated with them when they achieved their goals along the way. We have loved being on their journey with them and sharing their successes.
Mary and Lilah have a handful of projects they are currently working on, including:
- A joint venture in Woodend will be completed and on the market soon; a balcony railing is holding them up.
- A small bathroom renovation in South Melbourne. They’re under pressure to complete it because the tiler is still busy, and the people are ready to move in.
- A property in Port Melbourne has been prepared to go on the market. The photos have been taken, and they have an agent ready to sell it, but the campaign will have to take place between short-term rentals.
- Lilah is working on a four-bedroom house in Woodend. It’s an old seventies brick house that will be converted into a French country house.
This dynamic mother-daughter duo is a textbook case of how you can make the most of renovating. They have multiple strategies in their toolkit and are able to fill the gaps between their own projects by completing renovations for other people.
Mother And Daughter: The Benefits Of Working Together
Working alongside family can be challenging, and it can have an impact on your relationship. That said, Bernadette has worked with her husband and children throughout her renovating journey. She believes it generates a ripple effect in which you can set up your children to create wealth through property from an early age.
To make it work, you may need to set boundaries and define your roles. It helps if you like each other and enjoy spending time together.
Well, I think, first of all, you have to like each other.”
Mary had been in the business of renovating for profit for some time before Lilah joined her. She says she had to learn to step back, not be a mother, and listen to Lilah’s ideas and recognise that Lilah also has valuable insight. Four years on, Mary says the roles are reversed, and Lilah has taken the driving seat.
I do what I get told, argue about it, and then follow through. So, it’s been good.”
Mary welcomed Lilah into the business, knowing that if their relationship was affected, they would have to go their separate ways. Lucky, working together has not had a negative impact on their mother-daughter relationship. In fact, Mary says its created a stronger bond between them.
I do all the managing and dealing with all the clients. Mum helps with changeovers and renovations and steps in if I get stuck on something. But yeah, it’s been really good.”
How To Use Short-Term Holiday Rentals To Build Wealth
The original purpose of renovating homes for Airbnb was to build up a portfolio of investment properties to fund Mary and her husband’s retirement. Short-term holiday rentals generate a greater return on your investment, allowing you to pay off the property much more quickly.
Accountants may not agree with this strategy. However, you can put the money you make in an offset account, so you don’t use it to pay off the loan, and you can deduct the interest. This approach can give you the capacity to expand sooner.
But it is a fantastic way to build up your own wealth by paying off your property much faster.”
Mary’s original properties are close to the city and public transport, and they do well. One is close to the beach, and the other one is close to Albert Park. Lilah’s one-bedroom apartment is a bit different.
She purchased a one-bedroom apartment and decked out the courtyard to create a welcoming outdoor area. It’s a little bit quirky, which she says goes down very well. The return on investment of the apartment is also more significant than that on a three-bedroom house.
Unique Properties Are Ideal For Short Term Holiday Rentals
When Mary and Lilah take on properties for clients, they have some criteria that must be met. They are looking for something very different or special instead of just another house. Lilah says the property must catch people’s eye, and then it will do really well.
Old properties no longer make money on Airbnb. The property needs to have a wow factor. Mary and Lilah’s property in South Melbourne is such a home. Bernadette asked them to share the figures for the property:
We bought it for $419,000 and spent $30,000 on the renovation. We gutted it and did everything. Then we got it revalued at $680,000, and we earn from $1000 to $1,300 a week from it.”
How To Choose The Best Clients
It’s not only the properties that Mary and Lilah take on that must meet specific criteria; their clients must too. They try to ensure that they will get along with prospective clients and that they will be trusted to manage the property without too much interference.
The whole point of hiring me is to let me do what I’m good at.”
Short-term rentals are like any other rental property; you give them to an agent who manages them for you. Mary and Lilah undertake all of the responsibilities of short-term rentals, and if anything goes wrong, such as something that needs to be fixed, they will talk to the owner.
Mary and Lilah prefer to work with investment properties instead of people’s homes. They do make exceptions, especially if the property owner is away for a certain number of months a year. However, they want to avoid the complications that come when people are too emotionally invested in their homes and the contents of their homes.
Styling A Short-Term Holiday Rental
Styling is an all-important factor in determining the success of your short-term rental property. If it is poorly styled, it will not attract people’s attention, and it will not make you money.
If a property is already furnished when Mary and Lilah take it on, they will try to dress it up as much as possible. If not, they will give their client an estimation of how much it will cost for them to style it according to their tried and tested formula.
If they need new furniture, I can help them with sourcing it. Or if there’s already furniture in the home, we try and style around it and make it look as attractive as possible.”
How Long Is A Short-Term Rental?
Long-term rentals may be furnished or unfurnished and rented out for anywhere from six months to a number of years to the same person. Short-term rentals involve a much higher turnover of tenants.
A short-term rental can be anything from one day to several weeks, to a few months. Mary and Lilah’s rental strategy is to accept stays of a minimum of 21 days. If they see that they have a gap of one or two weeks between tenants, they will accept shorter stays, but they will never do anything less than a week.
It has been a reliable way for them to secure an income from short-term rental properties. All of their properties are booked through the new year into May and June 2023.
The Effects Of Covid On Short-Term Rentals
The first three months of Covid were very quiet for Mary and Lilah’s Airbnb properties, except for one. A couple from America were stranded in Australia and ended up staying for 18 months.
To generate business, Mary’s husband, who has connections to the film industry, suggested marketing to the producers of films and TV series that we scheduled to be filmed in Melbourne.
Mary spent some time online, looking up the details of production companies in the area and the films and series set to be filmed in Melbourne. As a result of the group email she sent to these people, they had a lot of business throughout the pandemic, and now she has a useful database of potential clients.
Best Properties To Own For Short-Term Holiday Rentals
If you are ready to purchase a property for short-term holiday rentals, what type of property should you buy? Should you buy a house, a townhouse, or an apartment?
Mary and Lilah’s most successful property is the one-bedroom apartment. It is close to the city, has a big outdoor space and a car park, and is always rented out. Based on the property’s success, they would advise you to buy two or three one-bedroom apartments instead of a house because your return on investment will be greater.
That said, different strategies yield different results. If your goal is to build capital wealth, a house will be a preferable option. Therefore, if the purpose of your property portfolio is to fund your retirement, it would be best to purchase a variety of different properties.
The house will increase in value over time, and the one-bedroom apartment will give you cash flow. “
Mary’s experience has shown her that the bigger the property, the more work. The costs are greater, and there is a greater risk of more people having parties and damaging the property. Therefore, the smaller properties are a lot easier to manage.
The Best Areas In Melbourne To Invest In Property For Short-Term Rentals
Lilah says their two properties in South Melbourne are more successful than the one in Port Melbourne. Even though Port Melbourne is on the beach, the name gives people the impression it is a port, and they don’t want to stay close to shipping activities.
Their properties in Elwood and St Kilda West have done well, while the one in Albert is a bit more tricky because it isn’t close to public transport. Mary says she would invest in a one-bedroom apartment in an old building that has plenty of character and somewhere to park a car.
Marketing Your Short-Term Rental Property
Marketing is obviously an important aspect of making money from short-term rental properties. Besides their database of potential clients who Mary sends emails to every six months or so, they are on various online platforms.
They have a website, and their properties are listed on Airbnb. 65% to 70% of their business comes from Airbnb, and the rest is from their website. They tried listing on another platform but have found Airbnb to be reliable and easier to work with.
Mary and Lilah used to be active on social media and used paid adverts to promote their properties. Now that they are fully booked, the extra work involved in keeping up with social media isn’t worth it for them.
I think it’s a great idea. If someone else did it, I would like it, but I, I don’t like doing it.”
Short-Term Holiday Rental Insurance
To highlight the importance of short-term holiday rental insurance, Bernadette asked Mary and Lilah what has been the most horrendous, scary, or funny thing that’s happened with their business.
They shared a story about tenants who had a three-day party at one of their properties that the neighbours didn’t inform them about. It was a last-minute booking, something they don’t usually do, but it sounded genuine.
The client was a Melbourne photographer who had models camped out in limos on the street, and there was quite a lot of noise. Although nothing was damaged, there were makeup stains on everything. Airbnb covered many of their costs for cleaning and replacing a carpet and a chair.
Conclusion: Short-Term Holiday Rentals Can Help You Build Wealth
Mary and Lilah are truly successful Wonder Women and shining examples of what you can achieve when you engage in numerous strategies for renovating and property investment. They have shown us how short-term holiday rentals can help you build wealth.
They have a strong mother-daughter relationship and an equally good working relationship. Drawing from each others’ strengths has enabled them to build a thriving business that includes renovating, selling properties for profit, and a host of Airbnb properties that ensure constant cash flow.
If you want to meet up with a group of savvy renovators, come over and join the She Renovates Facebook group. It is full of (mostly) women working hard to make their dreams a reality, making a great income through renovating for profit.
