With rising interest rates putting pressure on property owners across Australia, many are turning to Airbnb to increase their rental income. This blog explores whether hosting on Airbnb is a profitable venture, diving into average earnings, startup costs, and strategies to maximize revenue in bustling markets like Sydney, Melbourne, and the Gold Coast.
Why Airbnb Beats Traditional Leasing
Airbnb offers clear advantages over long-term rentals. Hosts can set flexible prices, tapping into high-demand periods like local festivals or peak holiday seasons to boost earnings. Additionally, Airbnb provides $1 million in insurance coverage for damages, injuries, or theft, offering peace of mind. With the potential for significantly higher returns, it’s a smart move for property owners looking to make the most of their investment.
The Airbnb Market in Australia
Australia’s Airbnb scene is buzzing, with over 191,000 active listings nationwide. Melbourne stands out as the leader, boasting more than 21,000 listings. These properties enjoy a solid 69% occupancy rate, reflecting strong demand for short-term stays. On average, a listing charges AU$252 per night (before fees), delivering an impressive annual income of around AU$62,388 per property. These numbers signal a lucrative opportunity—but what does it take to get in on the action?
Costs to Start an Airbnb in Australia
To start earning with Airbnb, you'll first need to invest in setting up your property. The initial costs vary based on the size of your listing. For a one-bedroom property, Airbtics estimates the startup cost at AU$5,358. This includes:
Bedroom furnishings (AU$1,976): mattress, bedframe, and wardrobe.
Living room essentials (AU$2,356): sofa, dining table, and laundry facilities.
Other necessities (AU$1,026): towels, a smart lock, and labor.
For larger properties, the costs increase: approximately AU$7,539 for a two-bedroom property and AU$9,515 for a three-bedroom property.
Is Airbnb Profitable for Hosts?
Yes, Airbnb is profitable in Australia, especially in key tourist areas and cities with high demand for short-term rentals. According to Airbtics data (October 2023–September 2024), the average Australian host earns AU$5,199 monthly, AU$62,388 annually—with even bigger paydays in places like Sydney, Melbourne, and the Gold Coast. Location, property type, and seasonality all play a role, but the potential is undeniable.
Earnings Potential in Australia by City
Earnings for Airbnb hosts in Australia depend on multiple factors, including location, property type, amenities, and seasonality. Here’s how gross annual revenues stack up in key markets:
City | Average Annual Revenue (AUD) | Average Daily Rate (AUD) | Occupancy Rate | Yield | Regulations |
Melbourne | 48,109 | 197 | 68% | 5.4% | Lenient |
Sydney | 61,195 | 226 | 78% | 3.1% | Strict |
Gold Coast | 71,765 | 270 | 77% | 5.1% | Lenient |
What Drives Airbnb Profits?
Several factors determine how much you’ll earn:
Location: Properties in tourist-heavy areas like the Gold Coast or central business districts in major cities such as Sydney or Melbourne tend to earn more due to high demand.
Check out top Airbnb locations in Melbourne!
Property Type: Entire homes and apartments generally generate higher returns than single rooms, as they cater to families and groups seeking more privacy.
Amenities: Ensure your property has essentials like a clean kitchen, private sleeping areas, and functional bathroom facilities. Bonus amenities such as Wi-Fi, air conditioning, and a coffee maker can further boost your property's appeal.
Hosts can also use Airbnb’s review system to screen guests and add a cleaning fee to cover upkeep, making the business more cost-effective.
Airbnb vs. Long-Term Renting: How Much Can I Make on Airbnb?
When comparing Airbnb to long-term renting in Broadbeach, Queensland, the income potential is striking. A one-bedroom apartment rented long-term might generate $590 per week, but high body corporate fees ($5,000–$6,000 annually) can reduce net earnings.
On Airbnb, the same apartment could earn $210 per night, meaning just three nights ($630) would exceed a week’s long-term rent. With a 77% occupancy rate (5 nights per week), you could gross around $1,050 weekly, offering significantly higher income potential.
However, Airbnb involves added expenses like cleaning and platform fees (~14.2%) and requires active management. Long-term renting provides stable, predictable income, while Airbnb offers flexibility and higher returns, especially in tourist-heavy areas.
Metric | Long-Term Rental | Airbnb (One-Bedroom, Broadbeach) |
Weekly Gross Income | $590 | $1,050 (5 nights at $210, 77% occupancy) |
Annual Body Corporate Fees | $5,000–$6,000 | N/A (paid by host, not tenant) |
Other Expenses | Maintenance, etc. | Cleaning fees, platform fees (approx. 14.2%) |
Net Weekly Income (Estimate) | $480–$500 (after fees) | $800–$900 (after expenses, variable) |
In summary, Airbnb can be more lucrative in the right location, but success depends on careful expense management, occupancy rates, and handling the demands of short-term rentals.
Discover top 32 Airbnb tips for hosts to boost your earnings!
How Airbnb Can Help Secure Your Financial Future
The flexibility of Airbnb allows property owners to generate higher returns while maintaining control over their calendars. For example, with the ability to block out dates for personal use, Airbnb provides a great balance between earning an income and enjoying your property.
In addition, Airbnb properties in high-demand areas often outperform long-term rental properties in terms of nightly rates and annual revenue, making Airbnb a smart choice for investors looking to maximise profits and build long-term financial security.
Are Airbnbs Profitable to Manage?
Managing an Airbnb property can be demanding, as guests have high expectations for cleanliness and service. That’s where a professional property management service like RightKeyBnB comes in. We handle everything from maintenance and housekeeping to property styling and photography, ensuring your Airbnb listing stands out and attracts more bookings.
Our Airbnb property management services ensure that your Airbnb is not only profitable but also easy to manage. With dynamic pricing strategies and expert marketing, we ensure that you maximise your Airbnb earnings without the stress.
Tax and Regulatory Considerations
Airbnb hosts in Australia must declare income and can claim deductions for expenses, as outlined by the ATO. Key points include:
Income is taxable, and hosts must keep records of all earnings.
Deductible expenses include cleaning, maintenance, utilities, and apportioned mortgage interest if renting part of the home.
GST applies if turnover exceeds AU$75,000 annually.
Local regulations vary; for example, Sydney has strict rules compared to lenient ones in Melbourne and the Gold Coast, affecting operational costs.
For detailed tax guidance, refer to H&R Block Australia and Lawpath.
Airbnb Revenue in 2024
Airbnb's recent Q2 2024 financial performance highlights a robust revenue increase of 11% year-over-year, totaling $2.75 billion. Net income reached $555 million, with an adjusted EBITDA of $894 million, reflecting the company's ability to generate strong profit margins and stable cash flows. This financial stability allows Airbnb to continuously invest in platform improvements, directly benefiting hosts in Australia by attracting more guests to the platform.
What It Means for Australian Hosts' Earnings
Airbnb’s recent growth trends can significantly benefit Australian hosts looking to increase their earnings. For instance, Airbnb has seen a marked increase in bookings around major events and holidays, indicating that guests are actively choosing Airbnb for special occasions. This trend allows Australian hosts to leverage high-demand periods, such as peak holiday seasons and local events, to maximize occupancy and boost revenue.
Moreover, Airbnb’s commitment to enhancing listing quality has led to the removal of over 200,000 low-quality listings and the introduction of "Guest Favorites," a feature that highlights top-performing properties. This means that Australian hosts who maintain high standards and receive positive reviews can enjoy greater visibility and higher booking rates. By prioritizing quality, hosts can stand out and attract more guests, ultimately increasing their earnings.
In addition, Airbnb’s focus on mobile engagement has resulted in a 25% increase in app downloads and a 19% rise in nights booked via mobile. This shift presents a unique opportunity for hosts to appeal to younger, tech-savvy travelers who prefer booking through mobile devices. By optimizing their listings for mobile and ensuring a seamless booking experience, hosts can capture this growing segment and drive additional bookings.
Maximising Airbnb Profit with Professional Management
Success with Airbnb takes more than just listing your property. At RightKeyBnB, we have the tools and expertise to manage your property and ensure consistent income. Ready to explore how hosting on Airbnb can lead to a secure and profitable future? Contact RightKeyBnB today and let us help you get started!
FAQs
How Much Does the Average Airbnb Host Make?
On average, Airbnb hosts in Australia earn around AU$5,199 per month, according to recent data from Airbtics covering the period from October 2023 to September 2024. This figure is based on an average annual income of AU$62,388 per listing per year, derived from a comprehensive analysis of 191,054 active listings across the country. This amount can vary significantly based on factors like property location, type, and seasonal demand. In popular areas like Sydney, Melbourne, and the Gold Coast, hosts can earn considerably more, especially during peak tourist seasons.
How can I maximize my Airbnb rental income?
To maximize income, focus on pricing strategies, high-quality photos, and appealing amenities like Wi-Fi, air conditioning, and a fully equipped kitchen. Optimize your listing by keeping it updated, responding quickly to inquiries, and encouraging positive reviews. Adjust prices based on local events and peak seasons, and consider professional property management to maintain high standards and attract more bookings.
Is Airbnb more profitable than traditional long-term renting?
Yes, Airbnb can often be more profitable than long-term renting, especially in tourist-heavy areas. For example, in places like the Gold Coast or Melbourne's inner suburbs, hosts may earn in just a few days what they would with a weekly rent from a long-term tenant. However, the profitability of Airbnb also depends on effective management and adjusting pricing strategies to maximize occupancy.