Short-Term vs Long-Term Rentals: Which Strategy Works Best in WA?

As Western Australia’s property market continues to evolve, investors face a key decision: should they opt for short-term rentals, such as Airbnb and Stayz, or stick with the stability of long-term leasing? Each approach offers unique advantages and challenges, and the right choice depends on factors like location, market demand, and individual investment goals.

Profitability Comparison

Short-term rentals can deliver higher nightly rates, making them attractive to investors seeking strong rental yields. In high-demand tourist areas such as Perth, Fremantle, and Margaret River, short-term rental income can surpass traditional leasing. However, fluctuations in demand, seasonal variations, and occupancy gaps must be factored in.

Long-term rentals provide consistent income and fewer vacancy risks. While the weekly rent may be lower than short-term stays, landlords benefit from reduced operational costs and reliable tenancy agreements. Suburbs with strong rental demand, such as Rockingham and Mandurah, can be ideal for long-term leasing.

Regulations & Compliance

Short-term rentals in WA are subject to increasing scrutiny. Many local councils, including those in Perth and coastal regions, have implemented zoning restrictions and registration requirements. Investors must stay informed about evolving regulations to avoid fines and non-compliance issues.

Long-term rentals, on the other hand, are governed by WA’s?Residential Tenancies Act, which provides clear guidelines for lease agreements, tenant rights, and landlord responsibilities. This structure ensures legal protection but also requires adherence to tenancy laws, including notice periods and bond regulations.

Market Demand & Suitability

The demand for short-term rentals is driven by WA’s tourism industry. Areas near beaches, wine regions, and city hubs attract visitors year-round. However, market conditions can shift due to travel restrictions, economic downturns, or increased competition from new listings.

Long-term rentals cater to a broader tenant base, including families, students, and professionals. High rental demand in metro areas and regional hubs ensures lower vacancy risks and predictable returns. Investors targeting areas with strong employment growth, such as Joondalup and Baldivis, can benefit from steady tenancies.

Risk vs Reward

• Short-Term Rentals:?Higher income potential but subject to occupancy fluctuations, increased maintenance, and regulatory risks.
• Long-Term Rentals:?Steady income, lower turnover costs, but may offer less flexibility in adjusting rental prices compared to short-term stays.

Investor Case Studies

Many WA investors have switched between strategies based on market conditions. For example, an investor in Fremantle may have capitalised on Airbnb demand during peak tourist seasons but opted for a long-term lease during off-peak periods to ensure cash flow stability. Another investor in Mandurah may have found long-term leasing preferable due to the ease of management and lower costs.

Conclusion: Which Strategy Suits You?

If you own property in a tourist hotspot and are prepared for active management, short-term rentals can yield excellent returns. However, if you prefer a low-maintenance, consistent income stream, long-term rentals may be the safer bet.

Ultimately, successful property investment in WA depends on a well-researched strategy tailored to your financial goals and risk tolerance. Need help navigating the best approach for your property??Contact Alicia McCulloch?at?[email protected]?or?0459 185 872, or book a consultation?here.