Choosing between Airbnb vs renting in Australia is the biggest call you'll make on an investment property, and it isn't only about the money. Here's how short-term and long-term stack up on income, effort and risk, and how to tell which one suits your place.
STR vs LTR: what the terms mean
STR stands for short-term rental: a furnished home let by the night or the week. Guests stay a few nights to a few weeks, and you keep the keys, the furniture and the calendar. You're also not tied to one platform: Hometime lists your place on Airbnb and other booking platforms like Stayz, Booking.com, and Vrbo and their expanded distribution network, all at once, so it picks up bookings from several sets of guests rather than waiting on one.
LTR stands for long-term rental: an unfurnished home let on a lease of six or 12 months to a tenant who moves in and pays rent weekly or fortnightly. You hand over use of the property for the term of the lease.
Airbnb vs renting income: which is more profitable?
Here's a two-bedroom Melbourne apartment run both ways: on a lease at the city's median unit rent, against the average two-bedroom Melbourne property in Hometime's portfolio over the past 12 months.
That's roughly $9,200 more a year on the short-term side, or 33%, before utilities and consumables come out. Figures are indicative and move with the property, the market and how well it presents.
The costs owners tend to miss on the short-term side:
- Linen, restocking and consumables between every stay
- Utilities - tenants pay these on a lease, you pay them on a short stay
- Faster wear on soft furnishings, and insurance built for short stays
- The hours: guest messages, turnovers and pricing, every week of the year
The good news? A property manager like Hometime will take that list off your hands, so you can earn more and stress less.
Want the maths on your own place? Sign up for a free earnings estimate.
What decides it for your place
- Local rules come first: Some markets cap the nights you can let, some want you registered, and strata by-laws or council approval can rule short stays out. Greater Sydney limits non-hosted properties to 180 nights a year, and Victoria charges a levy on short-stay bookings. Check out our guide on Airbnb rules in Australia for more information on your market.
- Occupancy: Gross income is the nightly rate times the nights you fill, so a strong nightly rate counts for little if the place sits empty half the year. A managed property tends to fill well above the market average; see the Sydney and Melbourne figures below.
- Tax: Short-stay income is taxed as income, same as rent, but what you can claim differs, and the ATO treats part-year private use differently again. It’s worth a conversation with your accountant before you make the switch.
Sydney and Melbourne: a closer look
The picture shifts by market. Sydney and Melbourne are our two largest, and they run on different calendars, one on a long summer, the other on an events diary. Here's how each year plays out:
Professional Airbnb management in Sydney protects those 180 nights in the city for the months that pay best. In Melbourne, the job is different — Airbnb management in Melbourne is about pricing around the events calendar year-round.
Should I rent or list my house on Airbnb?
Four rules you can hold against your own place.
- You need the same amount every month. Go long-term. Short-stay income moves with the season.
- You're within 30 minutes of somewhere people travel to - a beach, a wine region, a stadium, a hospital. Short-term usually wins.
- You want to use the place yourself. Short-term is the only option that allows it.
- Strata by-laws or a night cap apply. Check those first; they often settle it.
Both sides carry risk. On a lease, it's vacancy between tenants, arrears and the time it takes to remove a tenant. On short stays, it's the swing between peak and quiet months, so the strong weeks have to carry the soft ones.
Switching from a long-term rental to short-term
- Check your local rules and any strata by-laws.
- Give your tenant proper notice under your state's rules.
- Furnish and style the property, then get it photographed.
- List it and set your pricing for the season ahead.
- Watch the first 90 days - reviews build from there.
Or hand the whole thing over. Full-service Airbnb management in Australia runs end to end, including styling and photography, pricing, cleaning, guests, and we stay across the local rules as they shift, so keeping up with them isn't your job. One Melbourne owner did exactly this with a Brisbane holiday home - here's how it went:
Case study
How Hometime turned a Brisbane rental into a high-performing STR
Michael and his wife wanted to use their Brisbane apartment to escape Melbourne's winters, and earn from it the rest of the year. Short-term rental wasn't on their radar until a friend suggested Hometime.
87%
Occupancy rate
Ish and Rudi
Local Hosts
2BR
Apartment, Melbourne VIC
.webp)
