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If you’re thinking about diving into the Airbnb game in Australia, you might be curious about how much you could earn from this type of investment. Remember that the income you can earn from your Airbnb rentals may differ greatly based on your location, the season, and the popularity of your property.
Despite that, the short-term rental industry in Australia is definitely worth considering – especially when you consider that the average daily rate for this type of accommodation is around $200.
What if we told you that during high season, the rate could actually increase to as much as $307 per day? In fact, top-earning homes in Australia have even generated six-figure revenue in a single year, especially in locations like Darwin, where the average monthly revenue for an Airbnb sits at $4250.
If you’re thinking of investing in Airbnb, keep in mind that not all properties will yield the same results. It’s important to research the location and carefully analyse any influential factors. Tools like AirDNA can be a great resource for this.
Additionally, as you evaluate the potential returns from your Airbnb property, remember that capital cities in Australia also have different demands, ultimately affecting the guest volume and average occupancy rates for your listing source.
By understanding the Australian short-term rental market dynamics and making well-informed decisions, you’ll be better positioned to maximise your earnings and succeed in the Airbnb space.
Let’s dive in.
One of the key aspects to consider around investing in a short-term rental in Australia is understanding the potential rental income you can reel in. And while we’re sure you already know, estimating your Airbnb income correctly is crucial, as it affects other important metrics like cash flow and return on investment.
So here’s what you need to keep in mind.
Developing an effective pricing strategy can significantly impact your Airbnb earnings. Pricing your rental property competitively and adjusting your rates based on market demand can help you skyrocket your profits across the board.
Here are some key aspects to consider when determining your pricing strategy:
As we mentioned above, several factors impact how much you pocket at the end of the day. Here’s what you can expect.
The location of your Airbnb property plays a crucial role in determining your income. Properties in popular tourist destinations, major cities, or near significant attractions tend to have higher demand and, therefore, higher potential earnings.
On the other hand, properties in remote or less popular areas will likely generate less income due to lower demand.
The type and size of your investment property are also important factors that impact your earnings on Airbnb.
Entire homes and apartments: Offering a complete home or apartment can attract more guests, especially those seeking privacy or travelling in groups. These properties typically generate more revenue than private rooms.
Private rooms: Consider offering private rooms if you cannot rent out the entire property or live on the premises. Although private rooms may not generate as much income as entire homes or apartments, they can still be profitable, depending on your target market and location.
Size of the property: The number of bedrooms, bathrooms, and overall square footage also affects your potential income. Larger properties can accommodate more guests and often command higher nightly rates.
If you want to pocket more from your Airbnb property, it’s important to provide essential amenities and features that potential guests will appreciate. To help you get started, here are some value-adds you can consider offering your visitors during their stay:
If you’re considering becoming an Airbnb host Down Under, it’s essential to understand the costs, fees, and expenses involved. This knowledge will help you make informed decisions and ensure that you’re setting yourself up for success.
Many of these expenses come down to ensuring your overall property is in tip-top shape, and often, you can’t escape them. Here are a few to consider:
As a host, keeping your property clean and well-maintained is vital to ensuring your guests have a comfortable stay. Depending on your property’s size and location, you may need to budget for cleaning services as part of your expenses.
Professional cleaning services can cost between $30 to $50 per hour, sometimes more if your property needs more attention.
Regular maintenance and expenses – such as replacing furniture, plumbing, or electrical repairs – should also be factored in.
Having the proper insurance in place is absolutely vital for protecting your property and finances as an Airbnb host.
A typical home insurance policy may not fully cover short-term rentals, so you must purchase additional insurance tailored to your specific needs. Airbitics suggests hosts should budget for their overall operating expenses – including insurance and taxes – from 25% to 75% of their total revenue.
On top of all that, in Australia, Airbnb income earned is subject to income tax in some cases, and you’ll need to declare this on your tax return.
Additionally, Goods and Services Tax (GST) may apply if your turnover exceeds a particular threshold, currently set at $75,000 per year.
If you decide to use a professional property management company to help with the day-to-day operation and ongoing maintenance of your Airbnb property, you should be prepared to pay management fees.
These fees can vary but typically range from 10% to 30% of your booking revenue.
While this may seem like another expense to add to the list, it’s entirely worth it. Management services can include guest communication, property marketing, listing and cleaning support, and booking coordination, relieving some of the workload associated with running an Airbnb property.
At Growhost, when we talk to our owners about performance, we talk only in terms of net revenue results. This refers to what the owner gets in their pocket after the operational side of the Airbnb has been taken care of. Net revenue is all that matters.
As an Airbnb host in Australia, you’ll also need to pay close attention to local laws and regulations that may affect your ability to host and earn from guest stays on your property. Each state and territory and specific local councils may have their own rules and requirements that impact short-term rentals.
In New South Wales, hosts may be required to obtain a permit, and properties rented for over 180 nights per year may be subject to additional restrictions or taxes.
Meanwhile, Queensland generally allows home sharing, but some areas or apartment complexes may have by-laws restricting or prohibiting Airbnb-type activities.
To avoid facing penalties or legal issues, research the regulations specific to your location and ensure compliance. Failing to do so can result in costly consequences and difficulties.
If this all seems a bit overwhelming, we get it. But that’s where our services come in. Contact GrowHost now to see how we can simplify this process for you.
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