Permanent rental or Airbnb? What achieves the best yields for an investment property in Noosa?
Noosa is definitely up there as one of Australia’s top tourist destinations. At the end of the 2016 calendar year, we had over 1.39 million overnight visitors (staying over 4.5 million nights). So how do investment properties stack up in Noosa and what achieves the best yields – a holiday rental or a permanent rental?
When considering your options you need to ask yourself some questions around what you want out of that property. For example, if you want to access to it for your own holidays you might lean towards putting the property on Airbnb.
At the time of writing (June 2017), the permanent rental market in Noosa is tight. Holiday homes are also doing well but occupancy rates and returns fluctuate strongly in different seasons and can be affected by factors out of your control (eg. the economy and weather). We could see an increase in occupancy rates during low seasons soon with the Sunshine Coast Airport catering for international flights from 2020.
Returns on an Airbnb or holiday home in Noosa
Let’s have a look at the returns on a 5 bedroom, 3 bathroom home with a pool and outdoor entertaining area in Noosa Waters. The total cost of the home (including furniture) was $1.1 million. The figures below are estimates and are for the home’s second year on Airbnb – reviews do take some time to build up.
Airbnb in Noosa – purchase price including furniture $1.1 million
| Season | Nightly Rate | Weeks | Projected Occupancy | Weekly rate (10% discount) | Gross Rental income |
| Low | $ 350 | 34 | 40% | $2,205 | $29,988 |
| Mid | $ 400 | 9 | 60% | $2,520 | $13,608 |
| Festival /Holiday | $ 500 | 6 | 80% | $3,150 | $15,120 |
| Peak | $ 750 | 3 | 90% | $4,725 | $12,757 |
| Gross Projected Return | $71,474 | ||||
| Estimated costs (spring cleans, consumables, insurance, utilities, rates, maintenance etc) | $10,000 | ||||
| Professional Team BnB Airbnb management fee (22%) | $15,724 | ||||
| Airbnb fee (approx) 3% | $2,144 | ||||
| Gross Net Projected Return | $43,605 | ||||
As well as enjoying a healthy return on their investment, the owners have access to their own holiday home in Noosa. They have the ability to store their personal items in their garage for use while on holidays. Some owners keep a car in the garage for that extra convenience.
Returns on a Full time/permanent rental in Noosa
The estimated returns for the same 5 bedroom property in Noosa Waters (with a purchase price of $1.06 million unfurnished) are still good and it might be a good option for some. The figures below assume that it takes 4 weeks to secure a tenant.
Permanent Rental in Noosa – cost of property $1.05 million
| Weekly Rent | Weeks rented | Gross Rental Income |
| $750 | 48 | $36,000 |
| Gross Projected Return | $36,000 | |
| Estimated costs ( insurance, utilities, rates, maintenance etc) | $8,000 | |
| Listing and advertising fee (2 weeks rent) | $1,500 | |
| Property management fees (10 per cent) | $3,675 | |
| Gross Net Projected Return | $22,825 | |
The conclusion? Holiday rental or permanent rental for Noosa?
It depends on your situation and what you want from your investment. If you want to enjoy regular holidays on the Sunshine Coast, Airbnb might be the best option for you. In terms of yield for this particular property, the figures are certainly in favour of Airbnb.
What is Airbnb Management?
If you live interstate or don’t have the time or patience to manage your holiday rental Team BnB will manage it on Airbnb for you. It’s just like using a property manager for a permanent rental. Team BnB manages holiday homes on Airbnb in Noosa and other parts of the Sunshine Coast. We create the listing, take the photographs, liaise with guests, take bookings, manage the pricing, check in guests, provide guest services, organise professional cleaners and make sure your guests have freshly laundered linen. You can find out more about what we do here or contact us.
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