For Holiday-Makers: Where Are the Best Places to Buy a Vacation Rental Property in Australia

Posted by on December 15, 2020 in Investing and Insurance, Travel and Entertainment with 0 Comments

If you are looking for a sustainable real estate investment, and you enjoy taking vacations yourself, why not invest in vacation rentals? A vacation rental investment can be categorized under short-term rental properties. These properties are slowly taking over hotels as the go-to form of accommodation among tourists.

The industry is slowly growing. So many investors are becoming interested in having their own vacation rentals that, according to AirDNA, the short-term holiday rental supply in Australia increased by 47% from March 2018 to February 2019. This is equivalent to gaining more than 30,000 vacation rentals in the area.

Do vacation rentals now pique your interest? Read on to learn more about this kind of investment and where the best places are to buy a vacation rental property.

Buying a Vacation Rental: Is It a Good Investment Decision to Make?

In the past, when people wanted to go on a vacation, the only options for accommodation were inns and hotels. Then came the birth of vacation rentals, which have changed the way people stay while travelling.

In 2017, the short-term rental industry in Australia generated over $1 billion in revenue. This year, there has been a pause in travels due to the Covid-19 pandemic, which naturally affected the vacation rental industry. However, new data shows that the industry is slowly bouncing back; as of June 2020, there has been a 189% increase in vacation rental bookings. This is proof that vacation rentals are a good type of investment.

Advantages of owning a vacation rental property

To get you more excited in this industry, take a look at some of the advantages you’ll get in investing in a vacation rental business opportunity:


Perhaps the most obvious perk in owning a vacation rental property is the opportunity to earn. Renting it out to travellers can give you a convenient stream of income. The earnings you get can also pay for the property’s insurance and upkeep. Just make sure you apply the right marketing tactics so that you’ll have no vacancies throughout the year. You may want to enlist your property on several vacation rental platforms to ensure you’ll be able to reach more potential guests.

Have a Second Home

Investing in a vacation rental property doesn’t just give you an additional means of living; it also can serve as a second home for you. Whenever you want to take a break from your busy schedule, you don’t need to look further for accommodation as you already have one. The property can also serve in the long run as an heirloom that can be passed on to your children and future generations.

Tax Deductions

Vacation rental property owners can be eligible for tax deductions. You’ll be eligible for such deduction within the duration your property is advertised and rented out. You can claim these property expenses as deductions:

  • Maintenance and repair
  • Yard maintenance
  • Pest control
  • Cleaning
  • Insurance
  • Property insurance
  • Council rates
  • Body corporate fees
  • Interest
  • Capital work deductions
  • Funds borrowed to purchase the property

For accuracy, it is recommended that you keep all records regarding all property expenses. Hiring tax professionals is also helpful. Not only can they make sure that your tax return is done right, but they will also help you avoid any issues when your claims are reviewed or audited.


As years pass by, a property’s value naturally appreciates. A vacation rental property even has a higher chance of gaining better value, depending on the area where it’s located. You can make more money out of your property should you decide to sell it in the future.

Less Risk

A short-term rental business model is a popular choice among investors because of the low risk it offers. Since the industry is becoming popular, attracting potential guests to book can be a breeze. However, if by chance the demand for short-term rental vacationers is low, you can always shift to traditional, long-term rentals. Furthermore, you can always sell it or just treat it as private property.

The Best Places to Buy a Vacation Rental Property in Australia

When investing in vacation rentals, location is an important factor. It’s best to check out an area before buying a property there. To make sure you get maximum benefits for your investment, we’ve listed out the best places to buy a vacation rental property in Australia.

Sunshine Coast, QLD

This coastal city is Australia’s pride as it is considered one of the country’s ultimate tourist spots. The place consists of pristine beaches, surf spots, and subtropical forests, as well as freshwater rivers and lakes. Sunshine Coast tourism has recorded 2.2 million domestic holiday visitors and 251,000 international holiday visitors in 2019. The consistent huge number of people visiting this city makes it one of the best places for an investment property.

Coffs Harbour, NSW

Another wonderful holiday destination in Australia is Coffs Harbour. Vacationers love it here because of the abundance of activities they can enjoy, from dipping into the ocean at gorgeous beaches to watching birds and whales. This city also boasts of the Big Banana Fun Park, wherein guests can have fun trying out laser tag, ice skating, water park activities, and the 4D ride simulator. One of the city’s economic boosters is tourism as it welcomes an estimated 1.8 million tourists every year. This record shows the high potential this city can bring to those who want to invest in vacation rentals.

Adelaide, SA

This Australian city is home to world-famous wine regions, making it a paradise for wine lovers. The thriving restaurant and bar scene in the area is something hard to miss. Plus, tourists wanting to have a fun time can join immersive festivals and events. It is reported that more than 2.9 billion visited Adelaide in the year prior to June 2020. Aside from the high number of annual visitors, Adelaide is also considered one of the most affordable capital cities to live in. Having a vacation rental property here is certainly worth it.

Hobart, TAS

Tasmania is the capital and most populous city of Hobart. Whether you’re looking forward to witnessing new art pieces or appreciating the scenery from the mountain top, this is the place to go. Travellers also swear by the delicious Tasmanian produce that’s served at the wide array of restaurants. Tourism is flourishing in this city; that is why opening a vacation rental here is a good investment. The Tasmanian Tourism Snapshot reported that the total number of visitors in Hobart prior to the pandemic outbreak was at 1.3 million.

Canberra, ACT

This list wouldn’t be complete without Australia’s very own capital city. Although it's known to be a small town, it still offers huge opportunities for vacation rental investors. According to data from the Tourism Research Australia Visitor Survey, Canberra welcomed 2.9 million domestic overnight visitors, 2.3 million domestic day-trippers, and 266,278 international visitors during the year prior to June 2019. Be ready to fill in your appetite as you visit eateries and wineries in the area. Also, check out renowned galleries or celebrate with the locals by attending festivals.

Outside Australia

You can also extend your search to other countries that welcome foreign investors to help boost their economy. One of the ideal choices for property investment is the US. Besides having strong economic growth and stability, the country has many beautiful cities that create opportunities for steady passive income.

In 2019, property sales to foreign investors in the US reached USD 78 billion. This number shows that, if you’re thinking of starting up a rental vacation business in a foreign land, you’ll never go wrong with this country.

To make sure you get the most out of your investment, look for the most in-demand, touristy destinations. As you can see in The Short Term Shop, which helps investors find the most profitable vacation rentals in America, the busiest markets are those which are located in prime spots.

Big Sur, CA

An idyllic coastal spot in California, Big Sur is a paradise for all nature lovers. Vacationers are bound to enjoy many activities, including climbing the 3,379-foot-tall Manuel Peak at Pfeiffer Big Sur State Park and surfing at Sand Dollar Beach. With an estimated 5.8 million annual visitors, you’ll be sure that your vacation rental here will receive regular bookings.

Aspen, CO

Aspen is a ski-resort town that is an open playground for outdoor lovers all year round. There are many scenic mountain views to admire, from the Aspen Mountain to the Maroon Bells, which are the two peaks of Elk Mountain. Guests can even ride the Silver Queen Gondola for a more stunning viewing experience.

Even with the Covid-19 pandemic still ongoing, Aspen has recorded a 23.6% increase in occupancy just last October. This just shows that this place is worth considering as an investment location for your vacation rental property.

West Glacier, MT

This is the ideal starting point for those who long to explore the Glacier National Park. The park welcomes millions of visitors, with approximately 3.05 million tourists in 2019. As a vacation rental property owner, you wouldn’t want to miss this huge opportunity to get high occupancy. Promoting a vacation rental here is a breeze as this city provides as much peace and quiet as anyone can hope for on holiday.

While in West Glacier, vacationers can also go rafting at the Flathead River or simply hike or cruise at Lake McDonald.

Jackson Hole, WY

Lots of activities await those who plan to visit Wyoming’s Jackson Hole valley town. While the place is popular for its three ski areas that are jam-packed during winter, travellers can still enjoy other activities no matter what the season is. From whitewater rafting on the Snake River, to horseback riding while appreciating Wyoming’s most beautiful landscapes, one will never run out of things to do in this glorious haven.

Jackson Hole attracts more than 2.6 million visitors every year, making it a good place for those planning to invest in a vacation rental property.

Key West, FL

This city situated in the southernmost point of the US delights tourists with charming beaches, lively nightlife, and a lot more. Key West is most distinguished for its pastel, conch-style architecture. To further appreciate the beauty of this city, guests can book a cruise along the Key West Harbor.

Tourism is one of the city’s economic boosters. According to research, Key West welcomed more than three million travellers and generated tax revenue of nearly $200 million in 2018. If you’re looking for a perfect place to start a vacation rental property, this place is an excellent choice.

How to Choose the Best Vacation Rental Business Opportunity for Yourself

Vacation rentals can be profitable if you choose and market the right property. Your success in this industry will start with your selection process. The qualities to look for in a vacation rental property include:

Appealing Location

As mentioned earlier, location is an important consideration in vacation rentals. The lists above clearly show that the best places to buy a vacation rental property are in close proximity to different attractions. This is what appeals to vacation rental guests. You can purchase a property in any area you like, but make sure that your future guests will have easy access to holiday destinations and enjoy the property, as well.

High Demand

This is vital in any kind of business. In vacation rentals, this pertains to the frequency of bookings in the area. If there’s low to no demand in a particular location, then it wouldn’t make much sense to invest there. This will just lead to your business having low occupancy rates and a negative impact on your income and return on investment. So, before investing, first study the demand for vacation rentals in a certain area.

Safety and Convenience

The safety and convenience of your future guests should not be taken for granted. Are there any nearby amenities and facilities, such as grocery stores, bars, or restaurants? Most importantly, is the neighbourhood safe? Remember, should your guest have any bad experiences during their stay at your vacation rental, this can affect your business’s reputation.

Final Thoughts

Vacation rentals are a great investment. Aside from giving you a steady source of income, they can also serve as your second home. Just make sure to purchase a vacation rental that is in a prime location so that you can reap the greatest rewards.

For your source of travel and adventure, Mai Tai is the site to go to. We keep readers up-to-date with the latest about the global leisure industry. Get more tips about buying a vacation rental property on our website!

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