If you’ve ever dreamt of owning a beachside cottage or a mountain cabin and turning it into a source of income, you’re not alone. Holiday rentals in Australia have seen a surge in popularity over the past decade, thanks to platforms like Airbnb and Stayz making it easier than ever for individuals to monetise their properties. But with the cost of living on the rise, interest rate uncertainty, and tourism still on the rise, is now a good time to start your own holiday rental?
The Australian Travel Scene in 2025
Australians are travelling the country in large numbers, heading out on short getaways to the bush, coastal escapes, and regional towns. International tourism has also bounced back, with more frequent arrivals from Asia, the US, and Europe.
This increase in travel has kept the demand for short-term accommodation solid, particularly in regions outside of major cities where hotels are limited. But while the demand is there, that’s only one side of the story. With demand increasing, so has competition, coupled with a changing political and legal landscape, this is one decision best not taken lightly.
Holiday Rental Market Competition
Many property owners, from retirees with a spare granny flat to investors with multiple listings, are flooding platforms with options. This means more competition, especially in popular areas.
As a new holiday rental owner, you’ll need to stand out, whether it’s through unique design, thoughtful amenities, or an unbeatable location. Think pet-friendly country homes, eco-conscious beach shacks, or luxury stays with curated local experiences. The more special your offering, the more likely you are to attract bookings.
Regulatory and Legal Considerations
Before you get started, be aware that short-term rental regulations vary across Australia, and some areas are tightening the reins.
For instance, NSW has introduced a cap on the number of days a property can be rented short-term in certain council areas, Victoria has introduced a short-stay levy, and Byron Bay has moved to restrict short stays to combat the local housing crisis. These rules can impact your profits and whether short-term accommodations are even allowed in your area. So, do your homework, check local council websites, or speak to a property lawyer before you invest.
How Much Money Can You Actually Make?
Holiday rentals can be lucrative in the right location, with the right strategy. Popular coastal locations like Noosa, Margaret River, or the Mornington Peninsula can earn premium nightly rates, especially during school holidays and long weekends. However, income can be seasonal and inconsistent. You’ll need to plan for off-peak times and ensure your pricing is dynamic enough to stay competitive.
A helpful exercise is to look at similar listings in your target area on platforms like Airbnb or Stayz and check their availability calendars to estimate occupancy. By multiplying the average nightly rate by the estimated booked nights per year and subtracting expenses, to can see what your net profit could be. If the numbers don’t work out at 50-60% occupancy, you might be cutting it too close.
More Than Just Clean Sheets and Check-ins
Running a holiday rental is more than handing over keys and stocking the fridge with milk. It’s a genuine business that requires solid management skills. From pricing and budgeting to customer service, marketing, and actually running the business, many successful hosts find themselves juggling tasks like handling guest inquiries at all hours, coordinating cleaners, managing reviews, and optimising listings across multiple platforms.
If you’re serious about turning a holiday rental into a sustainable income, or even scaling it into multiple properties, having a solid business foundation helps. For those looking to upskill, completing a graduate certificate in business administration online can provide the tools and confidence needed to manage the financial, operational, and strategic aspects of the business effectively.
Advantages of Starting Now
Despite the challenges, there are also strong arguments for starting a holiday rental business right now. Travel is back, and Australians are prioritising experiences and travel more than ever. Remote work means more midweek bookings and longer stays, and for investors, short-term rentals offer an alternative to traditional long-term leases, which are facing their own pressures.
Plus, if you already own a property in a desirable area, converting it into a holiday rental can be a smart way to boost its value and generate extra income with relatively low upfront investment.
Should You Start a Holiday Rental in 2025?
If you already have the property in a prime location, now is a great time to test the waters. With the right setup and smart marketing, a holiday rental can become a solid side hustle or even a full-time business.
If you’re looking to buy a property purely for short-term letting, make sure you do your research. High interest rates and regulatory changes can impact your profits, especially if you’re relying on consistent occupancy to cover your mortgage. Do the maths, factor in worst-case scenarios, and be realistic about how much time and energy you’re willing to put into hosting.
