The decision between Airbnb and long-term rental is one of the most frequently asked questions by Australian property investors. The answer depends on your suburb, property type, occupancy rate and management appetite. This guide gives you the full income comparison so you can make a data-driven decision.
Airbnb vs Long-Term Rental Income Comparison — Melbourne Inner North
| Suburb | Long-Term Rent/Year | Airbnb Revenue (75% occ) | Airbnb Premium |
|---|---|---|---|
| Northcote (2BR unit) | $36,400 | $56,900 | +56% |
| Fitzroy (2BR unit) | $39,000 | $62,100 | +59% |
| Richmond (2BR unit) | $37,700 | $58,400 | +55% |
| St Kilda (2BR unit) | $38,500 | $63,200 | +64% |
Airbnb Costs You Must Include
- Airbnb platform fee: 3% of booking revenue
- Cleaning: $80-$150 per turnover
- Linen and consumables: $20-$40 per stay
- Property management (if using a service): 20-30% of revenue
- Short stay insurance premium vs standard landlord insurance
- Higher wear and tear on furnishings and appliances
The Occupancy Breakeven Point
At what occupancy rate does Airbnb outperform long-term rental? For most Melbourne inner-suburb 2BR units, the breakeven is approximately 58-62% occupancy. Below this, long-term rental is more reliable. Above this, Airbnb earns more net of costs.
Tax Implications
Airbnb income is fully taxable. You can claim deductions for cleaning, consumables, platform fees, depreciation, insurance and a proportion of utilities. A tax depreciation schedule is strongly recommended for short stay properties. GST applies if your Airbnb revenue exceeds $75,000 per year.
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