To truly earn money from Airbnb/short term rental property:

1) Must reduce cost as much as possible, INCLUDING BANK INTEREST.

This means that you'll ideally put as much paid upfront as possible, so that your monthly commitment is lower. This allows you to set more competitive rates and get positive cash flow ASAP. Too much monthly deficit is bad because of the quick wear and tear of Airbnb properties (detailed below in #3).

Very general rule of thumb is try to aim for 70% or less for loan margin, and make use of cashback for reno/styling/maintenance.

2) Remember to factor in cost of renovation and appliances. Airbnb in KLCC area can be extremely competitive and you're going to be fighting against people who spend higher on reno+amenities to give attractive photos, which tend to attract higher income tourists.

But you also need to know how to style the place with as low budget as possible, money invested in reno isn't necessarily reflected in higher Airbnb booking rates.

3) Prepare an exit strategy to sell and leave in 5 years. Related to Item #1, having a high loan means that it can be difficult to sell enough to cover outstanding loan and exit, in the event that cost of operations/value of the property goes bad.

Short term rental-oriented projects tend to wear and tear extremely quickly, within 5 years can see building age very quickly. Investors of this type usually want to up profit margin and there's high possibility that they'll try to cut maintenance cost as much as possible.

Airbnb is very vulnerable to changes in economic situation, moreso than regular rental. Lack of tourists=lack of income. Prices of property are still relatively high and KLCC is so easily accessible by public transport+so many high end hotels nearby. You have to be prepared to compete not just against owners of the same building, but the hotels and other Airbnb in the vicinity AND those that are built along the train lines.

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As far as Kampung Bahru redevelopment, it's an uphill battle to gentrify the area, as a regular visitor of KLCC/Yap Kwan Seng area for 15+ years it has not changed much.

Not directly, but speaking from friends and family who invest in tourist hotspots.

During times like MCO with really 0 income and economic troubles, can see the financial difference of those who overspend/overleverage with no backup vs those who are more prudent with their finances.

The ones who invested really early when property prices were low or with as minimal loan as possible, are able to survive better, compared those who overleverage with high loan margin beyond their affordability/buy overpriced during the property boom of early 2010s/jump on the compressed loan bandwagon sold by "gurus".

Basically because investing in property involves using loans (usually, unless you're one of those rare people who can afford to buy immediately), need to be sensible about if you're able to stay afloat and keep repayments even when no money from Airbnb is rolling in. Otherwise your unit can become another of Askarperang's posts dy 😁

This post has been edited by DragonReine: Aug 4 2023, 05:09 PM