Why the headline numbers mislead
A short-stay listing at $220 a night looks like $1,540 a week, more than double a $600 lease. But short stays carry costs a lease does not: platform and host fees, cleaning between every stay, utilities and internet, consumables, furniture wear, and in some places a levy. Occupancy is also never 100%.
Worked example
The default figures compare a $600 a week lease with short stays at $220 a night and 65% occupancy.
| Long-term lease | Short-term rental | |
|---|---|---|
| Income | $30,000 after 2 weeks’ vacancy | $52,195 from about 237 nights |
| Fees and management | $2,100 | $10,439 |
| Cleaning and linen | $7,118 | |
| Extra short-stay costs | $9,000 | |
| Costs paid either way | $5,300 | $5,300 |
| Net income | $22,600 | $20,339 |
On these figures the lease earns about $2,260 a year more, with far less work. Short stays need about 69% occupancy to match it. Add Victoria’s 7.5% short-stay levy and the break-even rises to about 78%.
Rules to check first
- Levies: Victoria charges a 7.5% levy on short stays under 28 days booked through platforms, from 1 January 2025.
- Night caps and registration: some states and councils cap the number of nights a whole home can be let for short stays, or require registration.
- Strata by-laws: many apartment buildings restrict short-term letting.
- Insurance and lending: standard landlord insurance may not cover short stays, and some lenders treat short-stay income differently.
- Tax: income is taxable and different expense rules can apply. Get advice.
Rules change often, so check your state government, council and strata before you buy or convert.
When short stays can win
Locations with strong year-round tourist or business demand, properties that suit groups or families, and owners who will manage it themselves to save fees. Even then, compare the extra income with the extra work and risk. For other ways to lift returns, see how to increase rental yield.
Frequently asked questions
Is Airbnb more profitable than long-term renting?
Sometimes, but not as often as the nightly rate suggests. After fees, cleaning, extra costs and realistic occupancy, many properties earn about the same or less than a lease.
What occupancy does an Airbnb need to break even?
It depends on your nightly rate and costs. In our example it is about 69%, rising to about 78% with Victoria’s 7.5% levy. Use the calculator for your own figures.
Do I pay a levy on short-term rentals?
In Victoria, a 7.5% levy applies to stays under 28 days. Other states and councils have their own rules, so check locally.
General information only. This calculator and content do not consider your personal circumstances and are not financial, tax or legal advice. Speak to a licensed professional before making investment decisions.