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