The Sunshine Coast is a tourist destination region. Our pristine beaches, rolling lush hinterland and plenty of things to do ensure a transient crowd of travellers no matter the season. With Airbnb and short-term rentals, a mainstay accommodation option for Aussie’s the idea of investing in a popular destination like the Sunshine Coast has probably crossed your mind. In addition to a booming rental sector as the ‘southern migration’ continues, so does the attractiveness of owning an investment property for a long-term rental. If you’re considering investing in the region this article takes a closer look at some of the pros and cons of short-term and long-term rental arrangements and which might be best for you.
Sunshine Coast & Noosa property over time
Investing in real estate is a long-term deal and while over the long term it’s a proven method it can be subject to market fluctuations. Naturally, it pays to do your research but historically, the Sunshine Coast follows a pretty convincing upward trend. Suburbs have increased around 6-8% per annum since 1993 with the last three years bucking that trend with increasing returns of close to 25%. It is starting to slow down now and has decreased by 2.4% in the last quarter. For a long-term investment strategy, the Sunshine Coast property makes a lot of sense. This isn’t financial advice and factors like the normalcy bias are always worth considering but in terms of long-term growth and return on investment historically – you can’t go wrong.
Investing in the Sunshine Coast & Noosa property market – what to look for.
Property investment is a different kettle of fish from buying a home. Occasionally, long-term investment can be used as a method to ‘downsize’ – the term coined by agents and marketers for the over 55-year-olds to transition from asset rich and cash poor. So, some emotion can be factored into your investment decision-making. But, outside of that, the decision is usually influenced by; location, market, age, condition, improvements and neighbourhood. Everything is measured against ‘return on investment’. This is natural considering that investment is about capital growth and income. Few people can afford to take a sustained loss so looking at average return on rentals in the area, supply in the region versus demand are good places to start. Features of the suburb (walkability, close to schools etc), ease of maintenance on the property and a few extras (like extra bathroom, bedroom, car space etc) that might get tenants over the line or bump your rental threshold up are key.
If you’re thinking of taking the Airbnb and short-term rentals route, location plays the biggest factor. Tourism hotspots are the clear winners, but the Sunshine Coast boasts a pretty impressive array of options in this regard. Distance to hospitality services, shops and activities are the big draw factors and will heavily influence your occupancy rate. Airbnb occupancy rates as an average across Australia sit at around 60% (source: OpenAgent) – the Sunshine Coast however sits higher – closer to 80%. This average is lifted by suburbs like; Noosa, Maroochydore, Coolum, Peregian and Mooloolaba. However, it’s important to remember that Airbnb and short-term rentals come with their own set of headaches and upkeeps: Fully furnished, higher cleaning and maintenance requirements plus managing bookings, last-minute cancellations and more. On the whole, the return for short-term rentals can be better but there is a significant increase in management too which will either eat into your time or your margin.
Short-term or long-term?
Ultimately, this decision is up to you. The long-term rental situation across the Sunshine Coast was recently dubbed a ‘rental crisis’. A study undertaken by Direct Collective revealed that recently the Sunshine Coast has displaced around 14,000 people. It also warned this was the tip of the iceberg, as an increasing number of owner-occupiers migrate to the Sunshine Coast. Those lucky enough to be able to invest in the Sunshine Coast property market can expect to be met with a favourable outcome due to supply outnumbering demand significantly. Short-term rentals are of course still an option too but in light of the above, ongoing fees and admin time, short-term rentals may be worth reconsidering.
Countryside Noosa Realty – Property Management
If you’re interested, Countryside Noosa Realty is currently offering a 6 for 6 campaign. This enables you to get 6 months of property management for 6% with the first 6 weeks free. You can check out the link below for more information and to contact us for a rental appraisal.
Further reading and more