With an increasing demand for short-term rental accommodation, Queensland is “undeniably a great market” for investors wanting to maximise their rental incomes, according to a leading short-term rental management company.
Rental management company MadeComfy said Queensland’s warmer climate and tourist attractions create significant opportunity for investors leasing their properties on a short-term rental basis.
It said that home sharing through platforms such as Airbnb has become a preferred choice amongst Queensland property owners.
Revenue and pricing manager Gina Zhang said Brisbane, in particular, has demonstrated a growing short-term demand due to its vibrant urban precincts, outdoor lifestyle and 12 months of sunshine-filled days.
She said it is among the top 10 most visited cities in Australia, with more than 8 million travellers in 2018.
“Despite the high competition, property owners here have a great opportunity to maximise rental income if the property stands out from the crowd and uses the best pricing strategy to attract guests,” she said.
“When it comes to both long-term and short-term rentals, the highest income projections are for South Brisbane and Brisbane City.”
She said property owners in Fortitude Valley, Milton and New Farm can also achieve good short-term revenues.
“For example, a two-bedroom professionally managed property in any of the above suburbs with a 70 per cent occupancy rate can generate more than $22,000 net income.
“Similarly, the Gold Coast also attracts an increasing number of tourists all year round who are attracted to its famous beaches, surfing spots, vibrant nightlife and entertainment options. On average, the Gold Coast has a short-term rental occupancy rate of 60 per cent and a monthly revenue of $2,000.”
Ms Zhang said Surfers Paradise and Broadbeach offer the highest short-term rental income.
“A managed property with two bedrooms can earn over $30,000 in net revenue with a 70 per cent occupancy rate as it attracts a great number of both holiday and business travellers. While Surfers Paradise is certainly the most popular and attractive suburb for short-term rentals, our research found it does not generate the highest long-term rental income.”
Ms Zhang said there are three ways to maximise short-term returns.
1. Raise nightly rates and wait for last-minute bookings
“Maximise your booking value in the high season,” she said.
“Set your prices higher than the average in the suburb and let other listings start to take bookings. The goal is to catch last-minute bookings in the week before check-in from guests who have few other options. Of course, this requires patience and a tolerance for risk, but on high-demand days, you have a good chance to secure last-minute bookings at a high rate.”
2. Raise prices for special calendar events
“Set a higher price and a five-night minimum stay over public holiday weekends to make sure the property is booked over the entire period and not just for one or two nights.”
3. Acquire the right ratio between price and occupancy rate
Aiming for a 100 per cent occupancy rate is not always the best way to achieve maximum returns, Ms Zhang said.
“A lower occupancy rate and adjusting prices accordingly is more beneficial. For example, a property with a $60 nightly rate and 100 per cent occupancy over 30 days will have a monthly return of $1,800. However, a property with a $100 nightly rate at 70 per cent occupancy will have a monthly return of $2,100.”