As the sharing economy continues to grow, more and more property owners are considering renting out their homes on Airbnb. However, not all properties are suitable for this type of rental. In this blog, we’ll discuss the pros and cons of short-term and long-term rental options and how Dynamic Residential can help you determine the best course of action for your property.
Long-Term Rental Positives
If you’re looking for stable rental income and less involvement in property management, long-term rental may be the best option for you. The long-term rental market in Australia is currently experiencing a growth trend, with rental prices increasing due to a decrease in available properties. Additionally, projections show that approximately 300,000 new migrants will be entering Australia each year, which will further drive demand for long-term rental properties.
Long-term rentals typically have a lease agreement of 6 to 12 months, with a fixed rent amount. This stability can provide property owners with the assurance of a steady income stream. Additionally, long-term rental properties are typically less demanding in terms of property management since there is less need for regular cleaning and maintenance as compared to short-term rentals.
Short-Term Rental Challenges
While short-term rentals can potentially generate higher rental income, they also come with their own set of challenges. One of the biggest challenges is the uncertainty caused by external factors such as COVID-19. During the pandemic, travel restrictions and lockdowns severely impacted the short-term rental market, making it difficult for hosts to attract guests. However, with COVID restrictions easing, local travel is picking up again, and guests are once again looking for short-term rental options.
Short-term rentals typically have a more flexible rental arrangement, with guests staying for a few nights to a few weeks at a time. This can potentially generate higher rental income as compared to long-term rentals. However, this flexibility also means that there is a higher demand for property management since the property needs to be cleaned and maintained regularly. Additionally, there is a higher risk of property damage since the turnover of guests is more frequent.
Suburbs Suitable for Airbnb
If you’re interested in renting out your property on Airbnb, some suburbs are better suited for short-term rental than others. Areas such as Olinda, Dandenong Ranges, Mornington Peninsula, Yarra Ranges, Melbourne Metro, Daylesford & Macedon Ranges, The Grampians National Park, Great Ocean Road, and Phillip Island are good options because they are located close to local attractions and events, which attract tourists to the area.
However, it’s important to note that even if your property is located in one of these suburbs, it may not necessarily be suitable for Airbnb. Factors such as the type of property, the size of the property, and the condition of the property can all affect its suitability for short-term rental.
Data Analysis to Optimise Rental Strategy
At Dynamic Residential, we have access to data that can help optimise your rental strategy. By analysing the average rent per night, the average length of stay, and historical seasonal occupancy rates up to 5 years ago, we can provide you with valuable insights to help you make informed decisions about renting out your property on Airbnb.
Additionally, we can review the offerings of competing properties in your area to see what guests are expecting and what will make your property stand out. For example, if there is an oversupply of 4-bedroom properties in your area, we may suggest offering your property as separate bedrooms instead of the whole property. By providing tailored recommendations based on data analysis and local demand, we can help you maximise your rental income and minimise your vacancy rate.
Is Your Property Suitable for Airbnb?
If you’re still unsure whether your property is suitable for short-term or long-term rental, speak to Dynamic Residential. Our team of experienced property managers can assess your property and provide you with personalised recommendations based on data analysis and local demand. Our goal is to help you make the most out of your investment property by providing you with a comprehensive rental strategy that maximises your rental income and minimises your vacancy rate.
If you’re considering renting out your property on Airbnb, it’s important to assess its suitability and develop a comprehensive rental strategy that aligns with your investment goals. At Dynamic Residential, we have access to valuable data analysis and local demand insights that can help you make informed decisions about renting out your property on Airbnb. Speak to us today to find out more about the suitability of your property and how we can help you maximise your rental income.
