Published
Airbnb or a long-term lease? How to compare them honestly
The comparison is nearly always done wrong, in the same way, and it flatters short-stay. Here is how to do it properly for a Sydney property.
The mistake almost everybody makes
A long-term lease is quoted as rent — a net figure the owner receives, before their own property costs. A short-stay property is quoted as gross booking revenue — a figure that has channel commission, payment processing, the management fee, GST on that fee, cleaning, linen, consumables, utilities and internet still inside it.
Comparing those two numbers is not a close comparison; it is a comparison of two different things, and it can easily overstate short-stay by a third or more. Every honest comparison starts by reducing the short-stay figure to what actually lands in the owner's account.
What has to come out of the gross
Channel commission on OTA bookings. Payment processing. The management fee and GST on it. Turnover cleaning and linen, where they are not charged to the guest. Consumables. Utilities and internet, which a long-term tenant usually pays and a guest never does. Vacancy — no short-stay property is booked every night, and the comparison must use realistic occupancy rather than a good month annualised.
Then the costs both options share and neither payout accounts for: strata levies, council rates, insurance, land tax where it applies, mortgage interest and depreciation. They do not change which option wins, but they change whether either is producing what the owner thinks it is.
The Sydney-specific factor: the 180-day cap
For a non-hosted property in Greater Sydney, nightly letting is capped at 180 days a year. Any honest annual projection has to respect that cap rather than model 365 nights of demand.
The cap also has a doorway in it: bookings of 21 consecutive days or more are excluded from the count. So the real comparison for a capped property is not 'short-stay versus lease' but 'a planned year of peak nightly letting plus longer stays, versus a lease'. That is a meaningfully different — and usually stronger — proposition than the naive version.
When the lease genuinely wins
When the building prohibits short-term letting. When the apartment is far from any demand driver and would need heavy discounting to fill. When the furnishing and setup cost cannot be recovered inside the period the owner intends to hold the property. When the owner needs certainty more than upside — a lease is a fixed, largely passive income and a short-stay calendar is a business.
A manager who tells you short-stay always wins is telling you about their fee structure, not about your property.