Short-term rental properties have been one of Australian property investors’ most favourite products in which they can invest. Nowadays, with Stayz and Airbnb making it as easy as possible ever before in order to lease homes to travellers, investors have been entering this really profitability booming market.
In this article, we discuss five important advantages of investing in short-term accommodation residences in Australia and why this method of investing can just be everything your portfolio is lacking.
1. Good Rental Yields
Short-term lease accommodation will have higher rents compared to long-term leases. While a normal lease accommodation would have 3-5% return per annum, this short-term accommodation can have 8-12% return or more in tourism-oriented regions.
The top priority in cash maximisation on rentals is location selection, together with unit administration. Properties along beachfronts, central business districts, or at attractions have high rates. In peak seasons such as summer breaks or holidays, investors will be in a good standing in maximising yield with price shifts in unison with demands. With short-stay Melbourne management, you can be as involved as you wish during the property management process.
2. Flexibility in Use
Another of the most attractive things about investing in short-term stay accommodation is the freedom it provides. With short-term rental homes in which tenants have exclusive occupancy, renters cannot book blocks of time with exclusive use.
This enables one to enjoy holidays at your own vacation rental home while still generating an income in the remainder of the year. It is particularly desirable to beach or mountain home investors, where one can enjoy regular retreats while building wealth due to appreciation of one’s property along with monthly rental incomes.
3. Tax Benefits and Deductions
Short let accommodation does have some notable tax benefits and this can enormously enhance your net yield. As a business, you can claim a fairly varied range of expenses such as managers fees, cleansing expenses, repair works, insurance premiums, as well as depreciation.
Advertising costs of listing your lodging on booking platforms, professional photos, and cost of furniture and staging your lodging can be deducted. You can further deduct transportation cost in going to your lodging in conducting maintenance or outsourcing to management companies.
4. Diversifying an Investment Portfolio
Short-term lease rental housing offers great diversities of portfolios of investments. Compared with conventional property investments with single capital appreciation, together with stable lease incomes, short-term lease homes are a business entity with varied revenues streams.
Such an investment is further protected in periods of market volatility. During periods of economic downturn when long-term leasing demand will most certainly decrease, units of short stay can diversify focus towards business individuals, vacationing families, or residents in need of staycations.
5. Rise in Tourism Industry in Australia
Australian tourism is one of those rare bright stars with positive outlooks of sustainable development, hence supporting investing in short-term lettings. Its diverse attractions, including its beaches, its cosmopolitan cities, as well as wildlife attractions, present cumulative demands both locally, as well as among international visitors.
Also changing post-pandemic is travel behaviour in favour of greater emphasis on personal, homelike accommodation as opposed to generic hotel accommodation. That has fostered repeat demand throughout Australia for superior quality short-hire rental product. Regional centres have particularly been at the forefront of this move as travellers centre towards non-mass tourism centre-based unique experiences.
Begin Your Short-Stay Investment Business
Short-term rental apartments offer a compelling yield enhancement method among Australian investors seeking high yield, liquidity, as well as significant taxation benefits. Growing tourism trends combined with traveller behaviour shifts create a positive market scenario towards this method of investing.
Short-term leasing as an investment is a winner with adequate research, astute location selection, and sound property management. It will be worthwhile to start with a short-term lease in a place you have a good understanding of, and diversifying your portfolio only over time as your confidence in this vibrant product increases.
