Airbnb vs renting in Australia: STR vs LTR

Choosing the right rental strategy for your property can feel like a daunting task, but it doesn’t have to be. While there are plenty of decisions to make, choosing between Airbnb vs renting in Australia (or short-term rentals vs long-term rentals) may be the most important. This decision can significantly impact your investment's performance, so it’s best that you understand which one suits you. 

Let's delve deeper into these options to help you find the best path for your property.

Airbnb vs renting: the breakdown

To know more about how much your property can potentially earn, schedule an obligation-free chat with Hometime:

Why choose long-term renting?

Long-term rentals are the backbone of the rental market, offering a dependable and straightforward investment route. Here’s why they might be your go-to option:

• Consistent income: Long-term rentals are the slow and steady runners in the rental race, providing a regular income stream. This predictability is great for budgeting and financial planning, ensuring you have a clear view of your earnings over time.
• Simplified tenant management: With longer lease agreements, the tenant turnover is significantly lower. This means you can save on marketing, tenant screening, and property preparation costs more often associated with frequent turnovers in STRs.
• Lower operational demands: Managing a long-term rental typically involves fewer day-to-day responsibilities. Tenants will handle the day-to-day cleaning and are more likely to deal with minor maintenance and repairs, reducing the need for your constant involvement.
• ‍Direct utility payments: In most LTR agreements, tenants pay their utility bills, which can lead to significant savings for you, especially during extreme weather conditions when the costs of heating or cooling can skyrocket.

Why choose Airbnbs?

Short-term rentals offer a more flexible and often more rewarding investment option, fueled by the rise of platforms like Airbnb. There are many benefits to owning an Airbnb, including:

• Potential for higher returns: The ability to adjust pricing based on demand, seasonality, and local events means STRs can bring in higher nightly rates than LTRs, potentially increasing your overall income.
• Flexibility in pricing: The dynamic pricing model of STRs allows you to maximise your earnings during peak seasons or around special events, giving you control over your rental rates.
• Personal use and enjoyment: One of the unique advantages of STRs is the flexibility to use your property for personal vacations or stays, providing a dual benefit of investment and personal utility.
• ‍Enhanced property maintenance: The nature of STRs means you’ll be regularly completing cleaning and maintenance checks between guests, helping to maintain or even improve your property's condition over time.

Airbnb vs renting: which one is for you?

The STR vs LTR debate isn't just about the numbers. It's also about matching your investment strategy to your lifestyle, financial goals, and how much personal involvement you're willing to commit. It’s important to consider the following:

• Your availability for active management: STRs typically require more hands-on management, including guest communications, cleaning, and maintenance. Assess whether you have the time or desire to engage at this level or if the hands-off approach of LTRs is more your style.
• ‍Investment goals and cash flow needs: Evaluate your financial objectives. Are you looking for a steady income stream, or are you able to navigate the variable income that comes with STRs for the potential of higher returns?
• ‍Local market dynamics: Understand the demand and regulations in your area. Some locations are better suited to short-term rentals due to tourism or events, while others may favour long-term stability. Check out our list of the best Airbnb markets in Australia for more info on how other short-term rental markets in Australia are performing.

No matter which path you choose, Hometime is here to guide you through the complexities of property rental management. Our expertise means we can provide tailored advice and management solutions, ensuring your property not only meets, but exceeds your investment expectations.

Get in touch with us at Hometime to unlock the full potential of your property with the following Airbnb management services:

• Property onboarding: We’ll help you navigate local Airbnb rules for homeowners so you can list your home on Airbnb and alternative websites as quickly as we can so you can start getting bookings ASAP.
• Listing optimisation: Our team constantly works on improving your listing using Airbnb SEO and Airbnb styling and professional real-estate photography. We also create detailed guides for your guests for a local touch that help you get great Airbnb reviews.
• Airbnb cleaning services: We’ll find the best cleaners for regular cleans and restocking between stays, paid for using the built-in cleaning fee from the booking. No need to pay out of pocket between guest stays.
• Revenue and booking management: Hometime’s pricing analysts and market experts use Airbnb dynamic pricing strategies and customised minimum night settings to help you calculate your Airbnb prices, allowing us to optimise your revenue while increasing short-term rental occupancy at the same time.
• Guest communication and management: We go the extra mile to ensure your guests enjoy every part of their stay, from making the booking, checking in, checking out, and everything in between. This includes guest vetting to reduce odds of property damage and Airbnb claims, taking care of maintenance issues quickly, providing alternatives for late-night arrivals, and even meeting them in person when needed!
• Airbnb property maintenance: Hometime’s local Airbnb experts will sort out all your maintenance needs to make both you and your guests happy. We’ll also do our best to get you the best rates for services in the area due to our close relationships with local businesses.
• Access to Hometime's all-in-one property management software to manage your Airbnb remotely.

Frequently asked questions

What is an STR in real estate?

Short-term rentals, or STRs, involve renting out properties for shorter periods like days or weeks. These types of properties are typically rented out on Airbnb and various alternatives to Airbnb like Vrbo, Booking.com, and more.

Tenant turnover and management for STRs are typically more involved compared to LTRs, but have the potential to earn more due to seasonal pricing.

What is LTR in real estate?

Long-term rentals, or LTRs, involve longer leases, typically months or years. Compared to STRs, tenant turnover isn't as frequent and overall management responsibilities are less busy. However, due to fixed pricing and longer periods between pricing changes, profits are typically lower compared to STRs.

How do I choose between long-term vs short-term rentals?

Your choice between long-term vs short-term rentals varies depending on your goals and overall management style. Short-term rentals have the potential to earn more than long-term rentals due to dynamic pricing factors, but require more day-to-day management from Airbnb hosts.

What are the best STR markets in Australia?

Some of the best STR markets in Australia include Melbourne, Sydney, the Gold Coast, and Brisbane. To know more about your property's potential profitability, contact Hometime.