Sydney Airbnb Net Yields Hold at 0.1% After All Costs

The gross short-term rental premium is {{str_premium_pct_fmt}} for a 3-bed house in Sydney, but after Airbnb fees, insurance, maintenance, utilities, and council rates, the picture compresses sharply. This article breaks down the real take-home for a 3-bed house in Sydney, walking line by line through what each cost actually is and where the short-term rental premium ends up after fees, insurance, maintenance, utilities, and council rates.

Sydney is a premium, low-yield market where the appreciation thesis often outweighs the cash-flow case. Median 3-bed house prices sit at {{sale_price_fmt}}, well above the New South Wales median of {{state_avg_sale_price_fmt}} and the Australia median of {{national_avg_sale_price_fmt}}. The numbers below assume self-managed short-term rental (Airbnb) and agent-managed long-term rental, which is what the dashboard shows by default.

The 3-Bed House: After-Cost Net Yield Lands at {{net_yield_str_fmt}}

A 3-bed house in Sydney grosses {{str_annual_gross_fmt}} on Airbnb against {{rent_annual_fmt}} on a long-term rental, a {{str_premium_pct_fmt}} revenue premium before costs. After all operating expenses, the short-term rental net yield is {{net_yield_str_fmt}} versus {{net_yield_ltr_fmt}} for the long-term option.

Note that Airbnb's host fee of {{airbnb_host_fee_pct_fmt}} is the highest among the major platforms in Australia. Stayz charges roughly 5% and Booking.com around 15%, so the platform mix you choose changes the take-home. Direct bookings via your own site avoid platform fees entirely but require marketing effort.

Airbnb Fees and Furnishing Eat Most of the Sydney House Premium

The single biggest cost difference between short-term and long-term rental for a Sydney 3-bed house is Airbnb's {{airbnb_host_fee_pct_fmt}} host fee, which alone consumes {{platform_fees_annual_fmt}} of gross revenue. Insurance is also higher under short-term stays ({{insurance_str_annual_fmt}} versus {{insurance_ltr_annual_fmt}}) because most landlord policies exclude paid guest stays and require a specialist short-stay product.

Maintenance is the other large gap: {{maintenance_str_annual_fmt}} for short-term versus {{maintenance_str_annual_fmt}} for long-term. The short-term figure includes annualised furnishing replacement (linens, kitchenware, and fixtures wear faster with weekly guest turnover), so do not list furnishing as a separate cost on top, that double-counts. Utilities of {{utilities_annual_fmt}} are also a host expense under short-term rental, whereas long-term tenants pay their own.

Hiring a Professional Manager Cuts Net Yield to {{net_yield_str_with_mgmt_fmt}}

The tables above assume self-management on the short-term side. For a 3-bed house, hiring a professional short-stay manager adds around {{str_agent_fee_annual_fmt}} per year, roughly {{management_fee_str_pct_fmt}} of gross revenue. After that line item, total short-term costs rise to {{total_costs_str_with_mgmt_annual_fmt}} and the net yield drops to {{net_yield_str_with_mgmt_fmt}}.

Whether that fee is worth paying depends on how much of your own time you can realistically commit. Self-management at typical Sydney occupancy of {{str_occupancy_pct_fmt}} means handling guest messaging at all hours, coordinating cleaners between back-to-back bookings, and managing maintenance issues remotely. For an out-of-area investor or anyone with a full-time job, a professional manager is often the difference between a sustainable operation and burnout, even at the {{net_yield_str_with_mgmt_fmt}} net yield.

Tax Treatment Often Tips the Balance Toward Long-Term Rental

The pre-tax net yields above understate the after-tax appeal of long-term rental because of negative gearing. When mortgage interest plus operating costs exceed rental income, the loss is deductible against your salary, reducing taxable income. At a 45% marginal rate (income above $190,000), every $1 of rental loss saves $0.45 in tax. At 30% ($45,001 to $135,000), it saves $0.30. A long-term rental property showing a modest pre-tax loss can deliver a positive after-tax return once the offset is factored in. Negative gearing applies to whichever strategy produces a tax loss (when interest plus deductible costs exceed rental income), and that can be either short-term or long-term rental, depending on the property’s financing, costs, and gross income.

On top of negative gearing, two depreciation deductions further reduce taxable income. Capital works deductions can be claimed at up to 2.5% per year of qualifying construction costs, depending on building age and a quantity surveyor’s depreciation schedule, and fixtures and fittings depreciation covers items like air conditioning, carpets, and appliances on shorter schedules. Held longer than 12 months, the property also qualifies for the 50% capital gains tax discount on sale. The dashboard calculates your after-tax position including negative gearing and depreciation based on your income, enter your salary to see how the tax treatment changes the short-term versus long-term rental comparison for your tax bracket.

Stamp duty and other transaction costs apply on purchase and vary by state; check with your conveyancer for current NSW rates and any first-home or investor concessions. data sources and market score methodology document how every figure here is calculated. For a Sydney suburb-level comparison, see Waterloo Yields 3.7% in Sydney, Nearly Quadruple Potts Point; Sydney Apartments Beat Houses on Yield Across Bedrooms covers the house-versus-apartment comparison with similar after-cost framing.

Data reflects market conditions as of {{data_date}}.

This information is for educational purposes only and should not be considered financial or legal advice. Regulations and market conditions change frequently. Verify current rules with local authorities before making investment decisions.