Australian Property News

Holiday rentals push up yields for landlords

Posted on Thursday, December 15 2011 at 1:08 PM

The Christmas holidays are just around the corner and for some landlords, their properties are likely to be in higher demand over the next month or so. While permanent rentals provide more stability, The Stayz Group Accommodation says now is a good time to switch your property from a permanent rental to a holiday-let pad, if you’re thinking about changing.

Business development director Justin Butterworth says the obvious reason is that you can probably get some extra cash if you holiday-let your property.

“Depending on the location of your property, it may be possible to charge your monthly mortgage repayment amount for a one-week stay, in which case you would only need to rent your property for 12 weeks a year to break even,” he says.

This quarter’s results (from 1000 holiday rental property managers surveyed) found that the occupancy rate was 28 per cent between July and September. Respondents were more optimistic about summer and predicted 45 per cent occupancy for the October to December quarter. However, 57 per cent of property managers said they were concerned about the increased cost of living, while 46 per cent noted that overseas holiday destinations are another concern (because they’re seen as more attractive with the higher Aussie dollar).

Interestingly, Queensland holiday-let properties had the highest occupancy rate in the country (38 per cent) despite the recent floods and downturn in tourism.

“With the Christmas holiday season drawing near, we’re seeing an increase in the occupancy rates of the other states, with more people taking holidays as the working and school year comes to a close,” Butterworth says.