The idea of your property investment working harder for you is appealing, but how can you ensure that? Here’s our pro tip: explore beyond the usual path of finding a long-term tenant. New ways to generate income from property investments have become popular, with co-living and Airbnb leading the charge. You’ve probably seen or heard about them—one offers a built-in community vibe, while the other caters to travellers. The big question, though, especially for us here in Australia, is this: which one puts more dollars back in your pocket?
There’s no absolute answer to that question. Both co-living and Airbnb have their upsides and potential downsides for investors. So, let’s unpack what makes each of them work and see which might suit your investment goals better.
Digging Deeper into Co-Living Investments
Co-living is essentially a modern-day sharehouse with a deliberate focus on community and often with a more professional touch. Instead of renting out rooms individually, you build a space where people live and connect. Imagine recent college grads, the odd newcomers to the city, and digital nomads hoping to find their people. They have their own private space—a room or a small studio—but can also share common spaces like a well-equipped kitchen & living room and fun extras like an ergonomic yet stylish co-working space or a cosy backyard hangout.
The beauty here for you as an investor is often the longer lease terms. Instead of the constant turnover of short-term stays, you get tenants who might stick around for months, even a year or more, because they enjoy being a part of a community. This can translate to more predictable income and less time spent constantly finding new people to fill the rooms. Of course, it will not be all smooth sailing. You’ll need to be on top of managing the property, fostering that community spirit, and making sure everyone plays nice in the shared spaces.
Making Sense of the Financial Side of Airbnb Hosting
Now, let’s switch gears and consider Airbnb. It offers short-term stays and caters to people visiting for a holiday, a quick business trip, or maybe just passing through. Your apartment or condo unit becomes a sort of home away from home but offers a different experience than a run-of-the-mill hotel. You can definitely attract diverse guests.
The big lure of Airbnb for property investors is often the potential for higher nightly rates. If your property is in a popular location, especially during peak seasons or when there’s a big event in town, you could charge significantly more per night than you would for a long-term rental. However, this higher earning potential comes hand-in-hand with more hands-on management. Expect to deal with a constant cycle of bookings, check-ins, check-outs, cleaning, and making sure your guests have a fantastic experience so they leave you a glowing review. Plus, the income can be a bit more up and down depending on the time of year and local happenings.
The Nitty-Gritty: Where the Returns Might Lie in Australia
So, how do these two rental properties stack up when it comes to your bottom line as an investor here in Australia? Let’s break down some key areas:
Keeping it Occupied
Vacancies can hurt your returns in both models. If you plan to invest in co-living housing, prioritise creating a desirable community that people want to be a part of for the longer term. Location is key—being close to universities, business hubs, or areas with a strong sense of community helps. With Airbnb investments in Australia, it’s all about attracting those short-term visitors to keep your booking calendar full. Value proximity to tourist hotspots, beaches, city centres, and good transport links. You’ll also need to be on top of your marketing to stand out from the crowd online.
The Price Tag
With co-living, you can set rental rates for individual rooms or units based on the local long-term rental market and the added value of the shared amenities. For Airbnb, your nightly rates can fluctuate quite a bit depending on demand. School holidays, long weekends, local festivals—these can all be opportunities to charge a premium. But you’ll also need to be extra competitive during quieter periods.
The Costs Involved
Running a co-living space requires managing utilities for the whole property, potentially organising community events, and dealing with the usual wear and tear of longer-term tenants. With Airbnb, you can face more frequent cleaning costs, laundry, and potentially higher utility bills due to short-term guests. You’ll also need to factor in platform fees and the cost of marketing your listing. Property management fees can vary for both, depending on the level of service you need.
The Rule Book
Here in Australia, it’s super important to know the local rules, especially regarding short-term rentals like Airbnb. Some councils require permits or have certain restrictions on how many nights you can rent out your property. Co-living generally falls under standard residential tenancy laws, but it’s always worth checking for specific regulations in your area.
The Initial Outlay
Setting up a co-living space might involve some upfront costs to create appealing communal areas. The same goes for Airbnb because you’ll want to make sure your property is stylish, outstanding and well-equipped for short-term guests.
Finding Your People
When running co-living homes, you may need to be particular in attracting the right kind of tenants who will contribute to the community. This might involve a more involved application process. With Airbnb, you just have to focus on getting those bookings through your online listing and ensuring a smooth experience for your guests to encourage good reviews that will eventually draw more guests.
Making the Smart Choice for Your Aussie Investment
Maybe you have a property in an inner-city suburb with a strong sense of community—co-living could be a fantastic way to tap into that market and enjoy more stable returns. Or perhaps you have a place in a stunning coastal town that attracts tourists year-round—Airbnb might allow you to capitalise on those peak season prices. At the end of the day, there’s no one-size-fits-all answer to whether co-living or Airbnb offers better returns here in Australia. It boils down to your specific property, its location, your investment goals, and how much time and effort you’re willing to put in. This is where having expert guidance can be a huge help.
At The Harmony Group, we’ve seen first-hand the successes and challenges of various property investment strategies across Australia. We understand the local market dynamics and can help you weigh the pros and cons of co-living versus Airbnb based on your unique circumstances. We can help you analyse the potential of each model, understand the regulatory landscape, and ultimately make a well-informed investment decision that aligns with your long-term wealth goals.
Get in touch with The Harmony Group today. We’re here to guide you.
