“They must be making a killing with this place”, said every person who’s ever stayed at a nice-but-seemingly-expensive-for-what-it-is Airbnb in Australia.

You take your coffee out to the front porch of your ‘Romantic Farmhouse Orchard Escape’ set on a sprawling property with hectares to spare and start crunching some numbers. ‘What are the overheads, really?’, you ask your mid-holiday-intoxicated brain, convinced the rustic cabin you’ve just dropped $400 a night on would pay for itself in no time. ‘I can do this’, you convince yourself as your smug hosts wave to you from their main property down the long pebbled driveway. But, come Monday morning after checking out of your Airbnb and back in to reality, the better question is—should you do this?

First, consider the market. As the pandemic comes to an end (surely, for the love of god), many investors who bought property in regional tree change areas over the past two years are deciding what to do with it once things go back to “normal.” They are asking the same question you should be asking yourself on your Romantic Farmhouse Orchard Escape porch: Is a short or long-term letting better for an investment property?

Some who bought property to wait out the pandemic amongst the trees or sea breeze like their new life of tranquillity so much they’ve decided to stay. Others are being called back into the office and are ready to hear the unnerving honk of an unnecessary car horn followed by the elevation of a stranger’s middle finger just to feel alive again. Some simply want to know how to make the most money off their recent investment.

With the rental vacancy rate as low as it is in many regional areas—and vacancies set to fill further with the reopening of international borders—rents are at an all-term high. Industry experts are predicting market rents will rise by over 10% this year. Over the past year, the NSW coastal town of Crescent Head saw the biggest rent rise in the country at 54.5%.

In many instances, landlords are looking at rental returns of up to 5.5%. As such, many regional property investors are being urged to lease to long-term renters rather than listing on a short-stay platform like Airbnb. With the latter, you’re looking at cleaning costs and management costs, not to mention all the extra time you have to set aside to handle the associated admin with running a successful Airbnb. While Short-stay investments can be thrilling, the risks are higher—think greater wear and tear on the property, paying tax on proceeds, and the extra time and effort listing an Airbnb takes.

Time is actually one of the most important factors to consider if you’re seriously thinking of taking the Airbnb route. Do you have the time (and patience) to deal with bookings, interacting with guests before their stay, and handling any emergencies that might arise while they’re there? It mightn’t be such a passive income after all when you’re driving two hours down the coast to deliver some extra toilet rolls at 8pm on a Friday. And if you forego all of these responsibilities and outsource to a management company, can you guarantee the personalised service and spotless presentation which make the Airbnb experience worthwhile for guests? And depending on the location and accommodation, you may end up getting a lower rental return than a long-term tenant after deducting management fees.

You must also consider the local regulations, for example the NSW government recently changed how short term lettings operate. In certain areas of the state, listings are limited to 180 days per year. That’s a big blow to the bottom line.

Then there’s the down months to consider, when, depending on your location, it’s either to hot or cold for visitors to find your spot desirable. A full-time tenant will cover your costs (and the utility bills) year round, plus 5.5%, if you’re lucky. And with rental market heading in the direction it is, luck is definitely on the investor’s side.