Hotel prices are skyrocketing in New Zealand at the moment - up to twice their usual rate in many Auckland venues, as visitors pour into the city.
Even in 2016 the Herald reported that the number of tourists visiting New Zealand has increased by 700,000, or 26%, over the past three years. And the trend is only continuing. Forecasted tourism numbers are to tipped to rise by 1 MILLION between 2016 and 2022.
Booked for a month
Recently we had some friends who were telling us about a mate of theirs who had managed to leverage his mortgage repayments by investing in his home and converting part of it into a studio to rent on Airbnb. Within days he was booked for the first month!
Obviously these increases to tourism are pushing holiday makers into the outskirts of Auckland (this guy was in the quiet leafy suburb of French Bay), and it is a smart time to think about how your home could work for you.
(Before I go any further I want to make it clear I’m not representing Airbnb or any other form of property rental outfit. As with any investment you should always seek independent advice. Just passing on some food for thought with your mortgage in mind here!)
A break for your mortgage
For this guy, his circumstances had recently changed and he was in the position of having some spare space. He couldn’t really afford to keep living in his home without something changing. He was thinking of renting out the room but after a bit of research decided to give the popular home rental site a try. After all, if it didn’t work out he could always look for a long term tenant. He invested in new furniture, bedding and cleaned the space so it felt modern, fresh and welcoming.
He got good photos taken and spent a bit of time getting the wording for the listing just right. And like I said, within 24 hours he had his first booking. Soon after February was booked. Already March is too. And suddenly things were a little easier when his fortnightly mortgage payments went out.
And, I have to say, fortunately for everyone he got in touch with his insurance guy to make sure he was covered for these changes in circumstance. Smart.
Our area of expertise
I know this is not an option for everybody. But what about when you next go away on holiday? Is there some way you could make space for a week or two and give it a go?
Or is there some way we can look at your mortgage to at least make sure you are making the right payments at the right times for maximise your repayments and minimise your interest?
Check you're covered
Talk to your insurer: Start by getting in touch with your insurer to let them know your plans to rent out your property. You can then get to the nitty gritty of how your home and contents policies would respond should something happen while guests are in your home. You’ll also need to let your insurer know if this is a one-off, occasional or regular gig for you and your home, as this may affect your cover.
Also make sure any changes you make to your home are compliant with current council regulations.
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