Running an Airbnb instead of a long‑term rental can look profitable at first glance

But the hidden costs, regulatory pressure, vacancy risk, and operational workload often make it a far more fragile business model. The issues below are drawn from verified 2026 Australian STR research and industry analysis, including occupancy data, cost structures, and regulatory trends.

No matter what you are told Airbnbs are not passive (even with outsourced management) You will suffer, higher maintenance, guest disputes, council compliance and raids, neighbour conflict, compliance updates, licencing requirements and furnishing replacement.

Airbnb is a hospitality business with high volatility, high costs, and high compliance. Long‑term rentals are a stable tenancy product with predictable income and low operational burden.

Across Australia the data is very clear, an average Airbnb host earns $48,760 gross , and then has a further $14,000-$ 25,000 per annum in extra annual costs (utilities, furnishings, platform fees and Short Term Letting Management fees).

The 4 Reasons to swerve running an AirBnb

1. Fees are sky high

Short term management fees for an Airbnb run at around 20%-25% as they are basically running a hotel.  Because it is a hospitality business, the owner of the property is now running a hotel that is subject to seasonality that will significantly vary its cash flow profile. (Winter bad, summer hopefully ok).

2. Lower Borrowing power

Banks discount Airbnb income by 30-40% when assessing borrowing capacity, meaning, smaller loan sizes and slower portfolio growth. The cash flows are treated (correctly) as less stable and shorter in duration.

3. State and local governments are determined to ensure you don’t succed

In 2025 – 2026 we saw

1. Short Term Rental caps in day terms (e.g no more than 30 days per annum)
2. Short term rental geographic exclusions
3. Strata by law restrictions
4. Significant local council enforcement
5. Increased council rates and levies

State and local government have been very clear via their policies that they do not want to encourage that segment of the market. Smart investors know to avoid interactions with all forms of government, as they typically end in a fine, or further taxes, and a greater regulatory burden.

4. Costs are higher across every single category

1. Cleaning every stay
2. Non-reimbursed utilities ($5000- $6000 per annum)
3. Insurance policies (2-3 times standard)
4. Management fees  20- 25% per month

Yes whilst the gross Airbnb yield might look amazing, its the net yield that pays the bills.

If you would like advice on shifting your Airbnb to the long term market, or would prefer to stick with stability, reach out and we can give you some advice.