Short-Term vs Long-Term Rentals: What’s Right For You?

Investing in Adelaide’s real estate market is a good decision. But, you need to decide whether you list the property as a short or long-term rental.

There are clear pros and cons to both rental strategies, but the decision rests mainly on four things: location, income, management time and personal use. Once you’ve assessed the issues related to those things, it should become reasonably clear whether your rental property is best advertised as a short-term rental such as an Airbnb or a holiday rental, or a long-term rental for stable tenants.

The location of the property helps to determine if it will be in demand for short- or long-term use.

Rentals in popular tourist areas such as along the coast can attract high rates of income and occupancy during peak holiday times. Properties located in or close to the CBD or public transport may also be booked during major events such as the Adelaide Fringe, Gather Round, Womad and the Supercars Championship.

Properties located in suburban areas, particularly near good public schools, are in high demand as long-term rentals due to lack of supply. Adelaide’s rental vacancy rates remain consistently under one per cent, so young adults and families priced out of the Adelaide property market seek good long-term rental properties in suburbs right across Adelaide.

Long-term rentals bring the benefit of consistent monthly income, so if you need regular, reliable and stable cash flow from your rental, then a long-term tenancy is the way to go.

Short term rentals offer high revenue but with more volatility, risk and operating costs. But with a short-term rental you have more ability to adjust the rates due to market demand, whereas government regulations restrict the frequency and rate of rent increases in long-term tenancy agreements.

Short-term rentals require constant management due to frequent guest turnover, including marketing, communications, accounting and cleaning. Long-term rentals require far less time to manage, so if you are time-poor a long-term rental is the better option.

Of course, you can always list both short-term and long-term rental properties with our property management department, and hand all of the day-to-day management requirements over to the experts.

The last consideration is probably easy… do you want to be able to use the property yourself? If you’ve purchased an investment property in a coastal locale for example, will you want to use it during holiday periods or long weekends? Or might you want to use your CBD property yourself as handy city accommodation during events or nights out in the city? If staying at the property yourself is a possibility, short-term rentals are the way to go.

If you’re thinking of selling or buying an investment property in Adelaide, give us a call – our sales agents would love to help. And if you’ve bought one already, our expert property management team will take all the hassle out of owning an Adelaide rental property.