Benefits of short term accommodation renting vs long term renting in Australia for property investors

There are several benefits to short-term accommodation renting and long-term renting in Australia for property investors, and the best option depends on the investor’s goals, the property’s location, and the market demand. Here are some potential advantages of each:

Benefits of Short-Term Accommodation Renting:

  1. Higher Rental Income: Short-term rentals can generate higher rental income than long-term rentals, especially during peak seasons or special events when demand is high.
  2. Flexibility: Property owners can rent out their property for short periods of time and have the flexibility to use the property themselves when it’s vacant.
  3. Tax Deductions: Property owners may be able to claim deductions on expenses incurred in providing short-term rental accommodation such as cleaning, maintenance, and repairs.
  4. Opportunity for Furnished Rentals: With short-term rentals, investors can furnish the property and offer it as a fully-furnished rental, which can appeal to business travelers or tourists who want a hassle-free experience.
  5. Potential for Capital Growth: Depending on the location and market demand, short-term rental properties may appreciate in value more quickly than long-term rentals.

Benefits of Long-Term Renting:

  1. Stability: Long-term rentals provide a stable income source as tenants sign lease agreements for a set period, providing income security for property investors.
  2. Lower Vacancy Rates: Long-term rentals tend to have lower vacancy rates than short-term rentals since tenants are more likely to stay for a year or more.
  3. Lower Costs: Long-term rentals have lower operating costs, such as utilities, cleaning, and maintenance, since there are fewer turnovers and less need for immediate repairs.
  4. Less Management: Long-term rentals typically require less management than short-term rentals, as property owners don’t need to clean and maintain the property as frequently or respond to guest inquiries.
  5. Lower Legal and Insurance Risks: Long-term rentals typically have lower legal and insurance risks than short-term rentals, which can be subject to different regulations and requirements.

Ultimately, the decision to invest in short-term or long-term rental property depends on the individual investor’s goals, the property’s location and condition, and the market demand. A comprehensive analysis of the market and thorough financial calculations can help determine which option is the most profitable for a particular property and investor. If you would like more information or an appraisal of your property to consider if it would be suitable for short-term or long-term rental, please contact Tegan at Geographe Holiday Homes, or 0424 295 293.

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