Have run the numbers on a few places and it doesn’t seem much better than renting out long term, as well as a lot more effort involved, this might just be the Australian market as property is very expensive at the moment but would be interested to here others’ thoughts and advice.
There are too many variables and you’ve given us too little information about yourself, your budget, your goals. Coincidentally you might have seen this article and thread?
I think we’re on the tail end of a good thing. Airbnb has made life more difficult for hosts whilst pandering to difficult guests. The old homesharing community feel seems to have been replaced with a race to the bottom in which listings are meant to provide hotel style accommodation for a fraction of the price. The result is you might get as much renting long term. Also there are local laws coming in restricting Airbnbs in many places. Do your research on prices really well.
In my own case where I live about an hour (or less) for guests to travel from Melbourne it is more worthwhile than LTR because rents in the country are less than half what they are in the city as folks just can’t afford $500/wk for a 2 bdrm apartment. Most of them would only pay $250/wk for a 3 bedroom house. Fortunatley most of my guests come from Melbourne so they compare my AirBnB price ($90-120/night with 50-95% occupancy) to a city hotel rather than a country motel. So I reckon I get 2-3 times what I would if I rented the space long-term but less hassle, from my point of view, from having the same person there all the time. On the other hand I have to clean it twice a week. For the half a house (which I own outright) I rent the return is about 15% which is much better than a rental return. But I also have to keep up with the market and change prices accordingly depending on season and other rental places nearby. It definitely isn’t set and forget.
Given housing prices in Australia have stabilised or going backward a little and banks are tightening lending criteria I would think unless you already own property to secure against and are prepared to get a P&I loan, not interest only, and have some negative gearing to write off against it might be marginal. But that’s just my view I am no expert.
Would add that my broad rule of thumb is, you can make about 40-60% more than long-term rentals and the additional work is 40-60% if not more.
Now … if you are running amazing scams (Ponzi, money-laundering, loan fraud, rigged reviews), your return will be astounding, and AirBNB’s “privacy” non-rules offer the perfect place to hide.
Keep in mind that if you enter now you are entering a different market than the one many hosts here entered. That may or may not be a bad thing. Established hosts tend to have selective memory and prone to confirmation bias when thinking about Airbnb moving forward. You won’t constantly be comparing the Airbnb situation you deal with to the mythical one of the past. Established hosts aren’t going to be excited about getting more people to enter the market.
It sounds like you want to buy a property and Airbnb it as an investor, not as a host. I believe, but have no evidence to support that belief, that it’s a bit late for that. That said, there are tons of mediocre hosts and Airbnb is making moves to increase standards. If old hosts leave in droves that could be your opening.
It’s the same in my area. Many people find it inconvenient to live in the countryside so the demand and the rents are pretty low. We tried doing LTR and it just wasn’t worth the hassle. The wear and tear was bigger than with the STR, plus if you got stuck with some not so nice ppl, you cannot just wait for them to leave in a week.
It definitely depends on your situation. For me I enjoy it, as well as it allows us to continue to renovate the investment property we’ve bought as we can afford it. We just couldn’t access it as we do if it was LTR. Our intention was not to buy just for the purpose of str though. Worth mentioning is the banks won’t include the rent as income unless it’s been calculated as income in your tax return ( if you are looking to borrow more to finnish some more Reno’s!)