Sydney’s rental market offers two main strategies for property investors: short-term stays through platforms like Airbnb, and traditional long-term leasing. Each delivers distinct financial outcomes, management demands, and levels of stability. Understanding how these models perform within Sydney’s diverse property landscape is key to selecting the right one for your investment goals.
Income and Market Performance
Sydney’s strong tourism and event calendar give short-term rentals a natural advantage in certain suburbs. Homes and apartments near beaches, entertainment districts, and business hubs, such as Bondi, Surry Hills, and Darlinghurst, often perform well on Airbnb, particularly during summer and major events. Dynamic pricing allows hosts to capitalise on peak demand, but returns fluctuate with seasonality and market trends.
Leased properties provide steadier results. Suburbs with consistent residential demand, such as Lane Cove, Randwick, or Chatswood, support long-term tenancy and stable income. Rent is fixed for the lease term, providing predictable cash flow and reducing exposure to market swings.
Management and Time Commitment
Operating an Airbnb in Sydney is more labour-intensive than maintaining a long-term lease. Frequent guest turnover requires cleaning, communication, and attention to presentation. Many hosts engage short-term rental management services to handle bookings, marketing, and maintenance, but these come at a higher fee structure.
Leasing a property is generally less demanding once tenants are secured. Inspections, rent collection, and maintenance can be handled by a property manager at a modest percentage of the rent. For owners seeking a low-effort investment, traditional leasing remains the simpler and more consistent approach
Property Access and Flexibility
Short-term rentals allow owners to access their property between bookings, a practical benefit for those who travel frequently or use the space part-time. However, this flexibility comes with income gaps during low-occupancy periods.
Long-term leases limit owner access but ensure uninterrupted occupancy. Tenants hold exclusive possession for the lease duration, which creates reliable continuity for both income and property care.
Stability vs Flexibility
Airbnb suits investors focused on higher returns and flexibility, particularly in suburbs with strong visitor traffic or unique short stay appeal. It performs best where occupancy can remain high across the year and where owners can dedicate resources to management.
Leasing appeals to investors seeking predictable, passive income with limited involvement. It aligns well with family homes, suburban apartments, and properties in areas with steady rental demand. The trade off is lower peak income potential but a more stable and hands off experience.
Location as the Deciding Factor
In Sydney, location often determines which strategy works best.
- Airbnb performs strongly in central or coastal areas such as the CBD, Potts Point, and Bondi, where tourism, nightlife, and events drive consistent bookings.
- Long-term leasing excels in residential suburbs with schools, business centres, and transport connections, locations that attract long-term tenants seeking convenience and community.
Regulatory and Tax Considerations
Sydney’s short-term rental market operates under specific local regulations, including registration with the NSW Government and compliance with planning rules. Some local councils restrict the number of nights a property can be rented annually, especially in high-density areas. Hosts must also declare income for tax purposes and may be liable for GST and other applicable charges.
Long-term leasing follows a more straightforward regulatory path. Tenancy agreements fall under the Residential Tenancies Act 2010 (NSW), and income is taxed as standard rental income. Deductible expenses include maintenance, management fees, and property-related costs.
Conclusion
Both Airbnb and leasing can deliver strong results in Sydney’s property market when matched with the right location and management approach. Short term rentals offer higher flexibility and potentially greater returns but require active involvement and tolerance for income variation. Long term leases provide consistency, security, and a lower workload.
The decision ultimately depends on your property’s location, your investment objectives, and the level of engagement you are comfortable maintaining. Understanding these factors allows Sydney property owners to choose the strategy that delivers the best balance between effort and return.
Contact Us
At Murray Property, we assist landlords in assessing which strategy, Airbnb or leasing, will achieve the best outcome for their property. By evaluating each property’s location, potential yield, and management needs, we help owners make informed decisions that align with both short-term goals and long-term investment plans.