Property investing

Short-term letting vs long-term renting

An honest, independent comparison of Airbnb-style short-stay letting against a standard long-term lease — the real costs, the owners-corporation ban power, and how regulation differs state to state.

A genuinely different decision, not just a different price

Search for "Airbnb vs long term rental" and most of what comes back is written by short-stay management companies — businesses that earn a percentage of your booking revenue only if you choose short-stay letting. That's not a reason to distrust everything they say, but it is a reason their comparisons consistently lead with the higher headline income and treat the costs, effort and regulatory exposure as a footnote. This page tries to do the opposite: start from what each strategy actually costs and requires, not just what it can gross.

The long-term case: the default for a reason

A standard 12-month (or longer) lease is the lower-effort, lower-risk default for most investors. Once a tenant is placed, a property manager typically charges roughly 5-8% of rent plus a letting fee, there's no ongoing guest turnover, cleaning or furnishing to manage, and standard landlord insurance is built around exactly this arrangement. (Suncorp Group, verified 20 Aug 2026) The trade-off is a lower gross yield than a well-run short-stay in a strong tourist location, and less flexibility if you want the property back for personal use at short notice.

The short-term case: higher gross, real ongoing costs, real regulatory exposure

Short-stay letting (Airbnb, Stayz and similar, whether through a platform or direct bookings) can out-earn a long-term lease on gross income in a genuinely tourist- or business-travel-demand location — but that gross figure isn't the number that matters. It has to absorb: furnishing and ongoing replacement of furniture and linen; cleaning between every stay, not just periodically; a materially higher management fee if you outsource it (often in the 15-25%+ range, against roughly 5-8% for long-term, though this varies by operator — confirm current pricing directly); occupancy that fluctuates with season and demand rather than a signed 12-month lease; specialist insurance, since standard landlord cover commonly excludes or limits short-stay use (Suncorp Group, verified 20 Aug 2026); and, in Victoria, a 7.5% levy on every booking fee. (State Revenue Office Victoria, verified 11 Aug 2026) Whether the higher gross survives all of that, for your specific property and location, is the actual question — not whether Airbnb "pays more" in the abstract.

If it's an apartment: your owners corporation may have the final say

This is the part most short-stay comparison content skips entirely, and it can override the whole decision before cost even enters the picture. Since 1 January 2025, a Victorian owners corporation can vote to ban short-stay accommodation (any booking under 28 consecutive days) in its building altogether, by special resolution — 75% of lot owners, or 75% of lot entitlements if decided by ballot or poll. (Consumer Affairs Victoria, verified 20 Aug 2026) The one exemption: the ban can't apply to a lot that's the owner's or occupier's own principal place of residence, so it targets investment short-letting specifically, not owner-occupiers who occasionally let a room or their whole home while away. Separately, since February 2019 (amended January 2025), VCAT can fine up to $1,100 for a short-stay breach, award up to $2,000 compensation for loss of amenity, and — after three breach notices for separate incidents within 24 months — issue a prohibition order banning that specific lot from short-stay letting for a period. (Consumer Affairs Victoria, verified 20 Aug 2026) Before assuming short-stay letting is viable in a specific apartment, check the building's own owners-corporation rules — not just state law.

Regulation is a genuinely different regime state to state

Don't assume a rule from one state applies in another. Victoria's approach is the levy plus the owners-corporation ban power above — there's no statewide short-stay register or day cap. NSW runs a materially different model: registration on the state's STRA Register is mandatory for every short-term rental property ($65 to register, $25 annual renewal), and a 180-day annual cap applies to non-hosted stays (host absent) across Greater Sydney and several other areas, with Byron Shire running its own separate 60-day cap outside two mapped exemption precincts. (NSW Department of Planning, Housing and Infrastructure, verified 20 Aug 2026) If you're comparing a short-letting strategy across state lines, treat each state's rules as a genuinely separate check, not a variation on a shared national theme.

A more honest way to decide

Short-stay letting tends to make sense when all of the following are true: the location has genuine, consistent tourist or business-travel demand (not just "it's near the city"); you're prepared to either manage it actively yourself or pay a materially higher management fee than long-term letting; you've confirmed the building's owners-corporation rules and the specific state's regulatory requirements allow it; and you've run the actual net numbers — after furnishing, cleaning, vacancy, insurance and any levy — against a long-term lease for the same property, not just compared headline nightly rates to weekly rent. If any of those don't hold, long-term letting is very likely the better-returning choice once the full cost picture is counted, not just the simpler one.

Practical checklist

Before choosing a letting strategy

• Check whether the building's owners corporation restricts or bans short-stay letting (Victoria: confirm directly with the OC, don't assume)
• Get a genuine short-stay demand read for the specific location, not just proximity to a CBD or attraction
• Get an actual management-fee quote for short-stay vs long-term, rather than assuming a headline percentage
• Confirm your insurer's position on short-stay use and get specialist cover if needed
• Check the specific state's registration, day-cap and levy requirements before committing
• Run the net numbers — after furnishing, cleaning, vacancy, insurance and any levy — against a long-term lease for the same property

Questions for a professional

• Does this building's owners corporation restrict or ban short-stay accommodation?
• What would a realistic short-stay occupancy rate and net (not gross) return look like for this specific property?
• Does my landlord insurance cover short-stay use, or do I need a specialist policy?

Official resources

• Consumer Affairs Victoria: Making rules to ban short stay accommodation
• Consumer Affairs Victoria: Short stay accommodation — laws to prevent unruly parties
• NSW Department of Planning, Housing and Infrastructure: Short-term rental accommodation
• State Revenue Office Victoria: Short stay levy

Sources and methodology

• Understanding the short stay levy | State Revenue Office Victoria — State Revenue Office Victoria (retrieved 11 Aug 2026)
• Making rules to ban short stay accommodation | Consumer Affairs Victoria — Consumer Affairs Victoria (retrieved 20 Aug 2026)
• Short stay accommodation - laws to prevent unruly parties | Consumer Affairs Victoria — Consumer Affairs Victoria (retrieved 20 Aug 2026)
• Does landlord insurance cover Airbnb and short-term rentals? | Suncorp — Suncorp Group (retrieved 20 Aug 2026)
• Short-term rental accommodation | NSW Department of Planning, Housing and Infrastructure — NSW Department of Planning, Housing and Infrastructure (retrieved 20 Aug 2026)

Figures on this page are drawn from Delora's local knowledge graph, refreshed from these primary sources and checked for changes on a regular schedule. If a figure here looks out of date, the official source above is always the authority — please let us know.