Stefan NIkolic manages around 140 Auckland properties as Airbnb places. Photo / supplied
Stefan NIkolic manages around 140 Auckland properties as Airbnb places. Photo / supplied
An Auckland manager of 139 Airbnbs has told of his biggest problem - and it’s not unruly guests, cleaning or getting paid.
Stefan Nikolic, managing director of the Courthouse Lane-headquartered Zodiak Management, said he started the venture six years ago, then Covid was wreaking havoc on his sector.
Mostly, itgoes fairly smoothly, said Nokolic, who immigrated here with his family from Serbia as a young child in 1994.
But staffing to keep up with expanding demand means he has been forced to ration expansion.
“Our biggest problem is keeping up with demand from new owners and hiring quality staff as we grow. We’ve had to limit the number of new properties to a maximum of three per week to be able to give them enough attention,” he said.
Zodiak started in 2017 but was down to one employee two years ago during Covid.
“Two years ago we experienced massive loss in clients due to the lockdowns, hence had to let go of our team of six that we had. Since Covid restrictions have lifted though, we have grown very quickly and are now experiencing more business than ever before,” he said.
Zodiak Management got $21,000 Covid cash from Work and Income initially in 2020 for three employees then a further $28,000 a year later.
Nikolic, aged 32, said the business has 24 staff now, mostly housekeeping manager, supervisor and workers as well as a customer service support team.
He would like to employ another three people in sales, marketing and administration.
“Our growth rate in revenue between 2022 and 2023 has been over 180 per cent, and this financial year we are predicting another 120 per cent growth,” he said.
Zodiak also opened its first key office a few months ago so Airbnb guests visit a pickup point with electronic lockboxes in a room accessible 24/7 via pin codes.
“This works really for CBD Airbnbs as a secure way to hand over keys,” Nikolic said.
Concerns have been raised about more short-term holiday-style rentals removing options and choices for longer-term tenants.
Zodiak Management founder Stefan Nikolic: limits the number of new Airbnbs he manages. Photo / Supplied
“We earn owners an average of 52 per cent more net compared to what they could get for their properties via a traditional tenancy,” he said.
“Some of our top-performing properties earn more than 100 per cent more compared to the long-term rental rate,” he said.
A property rented long-term at $500/ week could get $750/ week under his management after fees, he said.
Zodiak-managed properties are in the CBD, Ponsonby, Grey Lynn, Parnell and Mt Eden.
“During the last 12 months, the net earnings for owners after fees were $833/ week across our entire portfolio which includes different-sized properties from studio apartments to large five-bedroom homes,” he said.
The average occupancy rate for the entire portfolio was around 80 per cent annually but around 85 per cent for smaller properties like studios and one-bedroom apartments.
Annual occupancy rates of larger more luxurious properties were more like 60 to 70 per cent, he said.
Zodiak-managed properties are mainly investment residences, not people renting their own homes short-term.
Peter Lewis: Airbnb is not an option for him. Photo / Michael Craig
But multimillionaire 12-property Auckland landlord Peter Lewis says Airbnb isn’t for him.
The advantage of putting their place on Airbnb or other short-stay platforms is less regulation, Lewis said.
No healthy homes, Residential Tenancies Act obligations or difficulties in ending tenancies were advantages, he said.
Although there was the potential for a higher income, that was also a less uncertain income.
Disadvantages to landlords were a requirement to register for GST if the rental income exceeded $60,000 and the requirement to supply many small short-life items like kitchen appliances, bedding and household furniture.
“The necessity to maintain, replace, clean and launder the above is another drawback,” he said.
Constant resident turnover meant more record-keeping and occupant tracking and insurance costs would be higher.
“Most important of all is constant time-consuming day-to-day personal interaction with people arriving and leaving,” Lewis fears.
“Of course, there are firms who will handle all the day-to-day running of the property, but they will charge a justifiably high percentage of the income to do this. Stefan Nikolic would seem to be operating this style of business,” Lewis said.
“As I see it, running an Airbnb operation is very similar to running a motel with the associated long hours and daily time commitment. It’s a business.
“Long-term rental is an investment. I can see Airbnb working right now for some people who are finding it difficult with rising interest rates and taxation policies,” he said.
For some, that way of renting could be a financial lifeboat, Lewis said. Thankfully, he says, he doesn’t need to consider it as an option.
Anne Gibson has been the Herald’s property editor for 23 years, has won many awards, written books and covered property extensively here and overseas.
