As we enter 2024, short-term rentals in Perth are flying high. Given today’s low rental yield, many local property owners are optimising their returns through the Airbnb/short-term rental market. And with Perth’s great weather and high tourist ratio, overseas and interstate investors are also flocking in, buying up property to get their piece of the pie.
Granted, short-term rental accommodation (STRA) is not without its own responsibilities, which are considerably higher than the traditional long-term model. Then, not all properties are suitable for short-term rentals. But as with most things, it’s about weighing the pros and cons—and seeing what’s best for you and your property.
In this article, we:
- Break down the pros and cons of short-term versus long-term rental – to help decide what is best for you.
- Discuss the benefits of hiring a short-term rental property manager—it’s a way of benefitting from the considerable rewards of short-stay accommodation without the time-sapping hassle.
First, let’s look at the popularity of short-stay accommodation in WA.
How many short-stay accommodation places are available in WA?
REIWA’s review of the short-stay market found 10,091 short-stay accommodation places in WA in the March 2023 quarter. 47.3 % of these were in the Perth Metro area.
As testimony to their popularity, these short-stay numbers are increasing by over 16% per annum.
Does this mean they are monopolising the market, then? Not really. While there is a shortage of rental properties, short-stay accommodation still only makes up a tiny percentage of total dwellings (0.4% in Perth).
What is short-term accommodation?
Rental accommodation is considered a short-stay if it’s less than three months. Specifically:
“Short-term accommodation is accommodation that may be occupied for a continuous maximum period of three months within any one 12-month period and is not subject to residential tenancy agreements (residential leases).”
– Special Residential (Serviced and Short-Term Accommodation) Policy
What are the pros & cons of short-term accommodation rentals?
SHORT-TERM RENTALS: PROS
- More money, fast — The biggest incentive for short-term rental is your financial gain. Manage your property right, and you’ll earn considerably more cash than long-term rental. And in peak season? You can raise your prices even further. The money comes in quickly, too, giving you a desirable, fast-flowing income stream.
- Flexibility — You control the calendar throughout the year. With short-stay bookings, you can block out specific dates for yourself, friends or family whenever you choose.Fewer tenancy issues: Unlike long-term rentals, you’ll have less risk of common rental problems such as late payment or property damage
- Fewer tenancy issues: Unlike long-term rentals, you’ll have less risk of common rental problems such as late payment or property damage.
SHORT-TERM RENTALS: CONS
Short-term rental property management requires effort and experience to get it right. Consequently, going it alone may not be so easy.
- Renovating and refurbishing your property: Making an attractive income from your short-term rental requires more than buying new bedcovers and fresh flowers. Unless the property is brand-new, expect to pay into the thousands for repainting, furnishing, gardening and fitting out the property with those little luxuries guests expect during a holiday stay.
- Marketing: You’ll need professional photographs of your property and an online listing (or a few) on platforms such as Airbnb, VRBO and Bookings.com.
- Cleaning and laundry: Regular guest changeovers require regular cleaning, laundry and home maintenance. If you have the time and only have one property, you may be happy to manage this yourself. Managing more than one property becomes challenging, though, and you’ll likely need professional help.
- Key exchange: You must arrange ways for your guest to find the keys. You can do this in person or send instructions for key safe access. Although, you’ll need to avail yourself if a guest loses the keys or locks themselves out.
What are the pros & cons of long-term rentals?
LONG-TERM RENTALS: PROS
- Steady income: Presuming your property is rented, you’ll enjoy steady, long-term income without accommodating new guests each week. However, your profits will be far less than you could earn with a short-stay arrangement.
- Lower renter turnover: Long-term tenants often renew their lease, so there’s even less cleaning and less chance of losing money when there are no bookings.
- Less work: Enjoy having no guest changeovers or dealing with bedlinen and key exchanges. Maintenance issues will still exist, but you’ll free up more time.
LONG-TERM RENTALS: CONS
- Less income than short-stay accommodation
- More wear and tear on property
- Less flexibility than short-term rental options
SUMMARY:
Short-stay accommodation will give you more income.
However, choosing what suits you depends on your time, financial requirements, lifestyle commitments and expectations.
But suppose you like the idea of more income but don’t have the time, or know how to manage short-term rentals properly. In that case, an ideal solution is hiring a short-term rental property manager — especially if you have more than one property. Here’s how it works.
Introducing short-term rental property management
The role of the short-term rental property manager is to maximise your rental property return. They will also take care of all your rental accommodation responsibilities.
At Cloudbnb, our property managers advise on your property’s earning potential—and how to optimise its appeal. They create and market your listing, manage the property, organise cleaners and laundry supplies, hire professional photographers, handle guest check-in and checkouts and communicate with guests before, during and after their stay.
A good short-term rental management company will also ensure 5-star reviews for your listings. This is achieved through their professional knowledge and experience. For example, at Cloudbnb, our property managers will help furnish and decorate your home or apartment to optimise its unique appeal. They’ll ensure the property is kept clean and pristine — with all the finishing touches to provide that ‘hotel stay’ appeal.
Cleaning and laundry will be taken care of. Then, they’ll ensure there are fresh flowers, wine, chocolates and little necessities like fresh tea and coffee.
And the icing on the cake? Our team is available to answer calls from 8 AM to 10 PM and can sort out any emergencies quickly. So if the dishwasher fails, the air conditioner stops working, or the guest loses their keys, our team are here to sort it out for you.
Having these tasks taken care of by our experienced professional team is a massive benefit for an investor, particularly when provided for a set 20% fee. Hire a property manager experienced in short-term rentals, and you will:
A: Save time by not having to maintain your properties.
B: Increase bookings and profits through excellent professional guidance and services.
Introducing Cloudbnb
Perth-based Cloudbnb can maximise your earning potential and minimise the stress. Our complete short-term holiday rental management service makes getting the most from your rental property (like 14% in passive returns) easy.
We do it all:
- Property listing management & marketing
- Check-in & customer communications
- Cleaning, laundry & maintenance – ensuring that 5-star feel every time
- Styling & photography –
- Guest vetting – keeping your property safe and secure
- Property insurance
Ready to start earning more income?
If you’re ready to generate more income from your rental, get in touch today.
Helpful reading: short-term rental regulations in Perth
There are a few obligations surrounding STRA that all West Australian property renters need to be aware of, even if you have your property managed. Fortunately, they are simple and easy to follow. You’ll need to register your property with your local council, be aware of your responsibilities as landlord — and we recommend you stay abreast of the short-term rental planning reforms commencing in 2024.
NB: You can read more about WA’s STRA changes here.
Local government approval
Each local council has its bylaws to follow, with some having bylaws specific to short-term rental and holiday accommodation. For further information, see:
- ABLIS: Registration of Short-term Accommodation – Western Australia
- City of Fremantle – STRA Registration
- City of Perth – STRA Registration
Rental home safety & security
Read a guide to landlords’ responsibilities here.
Short-term rental planning reforms
The WA government is progressing with legislation to improve regulation around the STRA sector. These changes aim to better manage land use and the impact of tourism and STRA activities, particularly in residential areas.
Importantly, the changes do not introduce caps for STRA properties in WA. Further, in regional areas such as Mandurah’s Peel region, each local government authority will maintain the flexibility to determine planning approval requirements based on their needs. However, all properties must be registered — and comply with local planning requirements.
We suggest all property owners read proposed changes (starting mid-2024) to planning regulations and guidelines for un-hosted STRA properties in the Perth metro area.
Download a helpful Infographic on proposed STRA planning reforms here.
References
REIWA: Short-stay is not the solution to the rental crisis
WA Government: Short-Term Rental Accommodation Planning Reforms
ABLIS: Registration of Short-term Accommodation – Western Australia
City of Fremantle – STRA Registration
City of Perth – STRA Registration
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