In today’s evolving property market, more investors are exploring short-term rentals like Airbnb to boost cash flow and returns. But does it actually outperform traditional long-term rentals?

While Airbnb can offer impressive income potential in the right circumstances, it also comes with added complexity, costs, and regulation. Meanwhile, long-term rentals remain the foundation for most successful property portfolios — offering consistency, simplicity, and stronger financing outcomes.

Let’s break it down and compare both models — not just in theory, but in real-world investor terms.

The Rise of Airbnb as an Investment Strategy

Platforms like Airbnb, Stayz, and Booking.com have made it easier than ever to turn homes into high-performing short stays. Many investors are attracted to:

• Higher nightly rates
• Flexible owner access
• Rapid cash flow boosts in peak seasons

However, as short-stay accommodation becomes more common, councils are tightening regulations and lenders are looking more closely at the risk and income reliability of these properties.

At the same time, the strength of long-term rentals — particularly in undersupplied suburban and regional areas — is creating solid opportunities with far fewer complications.

Financial Comparison: Airbnb vs. Long-Term Rental

Understanding the Income Differences

Let’s say you have a 2-bedroom apartment in a metro lifestyle suburb.

• On Airbnb, you might earn $180–$220 per night. At 70% occupancy, that’s ~$4,000/month.
• But you also pay for:
  • Cleaning between stays
  • Higher insurance and utilities
  • Airbnb platform fees (~3%–15%)
  • Ongoing furnishing updates, restocking, and management

After expenses, your net income could drop significantly — especially if bookings slow during off-peak periods.

With a long-term tenant, the same property might lease for $2,800/month. The income is lower, but predictable. You’re not paying for cleaning, electricity, or linen, and you only deal with tenant turnover every 12–24 months.

If you’re building for the long term and want finance-friendly returns, stability often wins out.

Which Strategy Suits Which Investor?

Airbnb may suit you if:

• You have a well-located property in a tourist, coastal, or inner-city hotspot
• You’re willing to actively manage or pay for a property manager who specialises in short stays
• You want to use the property personally part of the year
• You’re comfortable with income fluctuations and higher operating costs

Long-term rentals may suit you if:

• You prefer reliable, set-and-forget cash flow
• You want to build a scalable portfolio with stable lending terms
• You value low effort and minimal day-to-day involvement
• You’re planning to hold and grow equity for reinvestment

Don’t Forget About Lending & Exit Strategy

One of the most overlooked factors is how each strategy impacts your borrowing capacity.

Lenders assess Airbnb income conservatively (if at all), and short-term rental income may not be fully counted in serviceability calculations. This can limit your ability to grow your portfolio.

Long-term rental income, on the other hand, is usually accepted by banks — making it easier to refinance, leverage equity, or purchase your next investment.

Your exit strategy also matters. If you plan to sell later, a property with a strong long-term lease and rental history may appeal more to mainstream buyers than a property solely suited for Airbnb.

Can You Combine Both?

Some investors explore hybrid models, such as:

• Running Airbnb for the first few years in a lifestyle suburb to maximise returns
• Switching to long-term leasing for stability or lending flexibility
• Using dual-key or dual-income designs to separate a liveable unit and a rentable short stay space

This requires careful planning, but when done right, it can offer the best of both worlds.

The Bottom Line

Airbnb investing isn’t necessarily better — it’s just different. The returns can be higher, but so are the risks and responsibilities. For most investors, long-term rentals provide the kind of predictability, scalability, and financial efficiency that builds lasting wealth.

At PropVest, we help you understand what strategy suits your goals — whether that means steady income, maximising borrowing power, or exploring niche opportunities like co-living or short stays with structure.

Need Help Planning the Right Strategy?

Not all high-yield properties are created equal. We’ll help you compare real options, forecast performance, and build a plan that fits your financial goals — not just your next purchase.