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A new property management service is using online platforms like Airbnb to generate better returns for clients.
Hey Tom founders Joel Cacciotti and Luke Baker believe their service offers a real alternative to traditional leasing for property owners willing to try the digital sharing economy.
“We engage with the property owner on an agreement, not dissimilar to a lease, and then we register their property and essentially unlock the value that is in the short- and medium-term letting market,” Mr Baker said.
“We can guarantee our client a fixed rental return above what they would normally get if they were to go to a real estate agent and we can guarantee that for them for a one-year period.”
Hey Tom offers a fixed pricing model as well as a shared pricing model, allowing landlords either a guaranteed rental income or an uncapped yield.
According to Mr Baker, the fixed rate is agreed upon before singing and is guaranteed to generate above-market returns for landlords for a one-year period, depending on the property.
“But if you don’t want that fixed income and you want to see how well your property can do and believe in the sharing economy the way we do, we go and let it out as much as we can and then owners get 80 per cent and we take 20 per cent.”
Like traditional property management services, Hey Tom takes care of filling vacancies, cleaning and maintaining the properties, as well as regularly inspecting each listing between tenants.
“If you think about a traditional lease, the real estate agent might go and inspect it once every six months or once a year, but we’re in there every second or third day or week, depending on whenever the stay finishes,” Mr Baker said.
“I actually believe that the property is in a better position to be looked after and maintained to a higher standard as well, plus we can comfortably cover minor incidental costs without having to go back to our client and hassle them with something we deem to be trivial.”
The company’s founders agree that short-term leasing platforms aren’t suitable for all properties. The team speaks with landlords about whether or not services like Airbnb can work for them.
“We don’t just take everybody; there are a couple of criteria that we look for in properties. From our experience of doing this, we already know what a good property is going to be, and it’s really about the feeling and if this property is going to work well for what we’re trying to do,” Mr Cacciotti said.
“If somebody came to us with a property that was in Austral in the far western suburbs, we’re probably not going to be able to give that home owner our value proposition, so location and proximity to key things like transport are important,” Mr Baker added.
Hey Tom officially launched in April and currently has 10 Sydney properties in its portfolio.
[Related: PMs can turn digital disruption to their advantage]
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