Short vs Long Term Rentals

Since the emergence of short term rental websites like Airbnb, Stayz, there has been much debate about whether properties rented on a short term basis provide a better rental yield for a property owner than on a long term lease. Property owners are trying to squeeze out every dollar when it comes to their homes so we made a list of pros and cons of both Airbnb short term property rentals vs long term property rentals

Pros

• Short term rentals can provide owners with rental returns up to 30% higher than a traditional long term
• Ability to choose when you wish to use your property personally.
• Can use holiday rental letting to supplement your income
• Flexibility to take advantage of higher rental returns during peak seasons (e.g. school holidays, long weekends or summer).
• Opportunity to generate income from your own home when it is vacant (e.g. work travel or holidays).
• Opportunity to meet people from all over the world.

Cons

• Banks may prefer the stability of a long term lease when assessing a home loan application.
• Risk that your property may sit vacant for extended periods of time particularly if the property is located in a less desirable area with little tourist activity.
• Uncertainty around regulations, council, strata bylaws and insurance coverage.
• Competitive, as more and more listings are popping up, you’re not only competing against other airbnb properties but other hotels on listings, price and service.

Short term rentals require a bit of leg work from booking every guest in, to ensuring the cleaning is hotel like. Fortunately for the time poor there is an AirBnB property manager in Sydney and Brisbane called HostmyBnb that can not only provide Airbnb cleaning but full Airbnb property management in Sydney and Brisbane

Long Term

Pros

• Stability of rental income received.
• Requires little involvement or effort from the landlord.
• Easier to profile a single tenant.

Cons

• Inability to flexibly manage your property to take advantage of periods of high demand.
• Tenants are likely to be more demanding for repairs.

Are short term rentals right for you? It probably depends. Data has shown that the properties which provide the best rental returns for hosts in Sydney are located in the inner city or near the beaches. And unless you choose to hire a short term property management company, chances are you will be putting in a lot of effort to earn these higher returns.