How to Find the Best Airbnb Investment Locations in Australia

The Best-Known Destination Is Not Always the Best Investment Location

Well-known beaches, city centres and tourism destinations can appear attractive because their guest demand is easy to see. Popularity, however, often attracts more accommodation supply, higher purchase prices and better-established competitors.

A location may generate significant booking activity while still producing a weak investment result for a new buyer. The property price may be high, the market may be dominated by professionally managed listings or the accommodation may need to discount heavily outside peak periods.

The opposite assumption can also be risky. A less famous market is not automatically an emerging opportunity. Limited competition may mean the market is undersupplied, but it may also mean there is not enough reliable guest demand to support more accommodation.

The objective is therefore not to find the most popular or least competitive location. It is to find a market where demand, supply, purchase price, property fit and operating costs can work together.

Separate Guest Demand From Housing-Market Demand

Short-term-rental demand and general housing demand come from different customer groups. A suburb may have strong owner-occupier demand because of schools, commuting access and limited housing supply without attracting enough overnight visitors to support an Airbnb.

Another area may attract substantial holiday, event, medical or workforce demand while having a slower residential sales market. Neither dataset should be used as a substitute for the other.

Guest-demand research should examine bookings, stay patterns, visitor reasons, seasonal changes and competing accommodation. Property-investment research should separately examine purchase price, resale demand, long-term rent, supply, local employment and broader market fundamentals.

A stronger location passes both the guest-market test and the underlying property-market test.

Start With a Clear Guest Segment

A location should not be assessed for “all travellers”. Families, couples, business guests, event visitors, workers, medical travellers and pet owners search differently and value different property features.

Defining the likely guest segment helps narrow the right suburb, street and property type. A family beach market may reward fenced outdoor areas, multiple bathrooms and parking. A medical precinct may value lifts, quiet bedrooms, kitchens and longer stays. A business market may need reliable internet, desks and weekday availability.

A property should be selected to serve a defined guest need rather than furnished first and marketed to everyone later.

Find the Recurring Reasons Guests Need to Stay

Strong short-term-rental markets usually have identifiable demand drivers rather than vague lifestyle appeal. The key question is not whether the place looks attractive. It is what repeatedly brings paying guests into the area.

A market with several independent demand drivers may be less exposed to the cancellation of one event or a weak tourism season. Investors should still check whether those guests already have enough hotels, motels, serviced apartments and short-term rentals to choose from.

Check Whether Demand Is Repeatable

A busy weekend does not prove a location has sustainable short-term-rental demand. One festival, sporting final or temporary project may create exceptional booking activity without supporting reliable performance throughout the year.

Separate recurring demand from temporary demand. Hospitals, universities, business districts and recognised tourism regions may create repeatable reasons to stay. One-off infrastructure projects, major events and disaster-related accommodation demand may disappear.

Map Demand Across the Whole Year

An annual occupancy figure can hide large differences between peak and off-season performance. A coastal market may book strongly during summer and school holidays but experience long gaps during winter weekdays. A city location may perform better during business periods but soften on weekends or holiday dates.

Review demand by month, day of week and guest type. Identify whether bookings depend on weekends, school holidays, major events or short peak windows. Then consider whether the stronger periods can realistically support the weaker ones.

Seasonality is not automatically a reason to reject a location. It needs to be reflected honestly in pricing, cash-flow planning and the amount of buffer retained by the owner.

Build a Month-by-Month Demand Calendar

A simple demand calendar can make seasonal assumptions easier to challenge. Record school holidays, recurring events, business cycles, university dates, major sporting fixtures and low-demand periods for each shortlisted market.

Then compare the calendar with visible listing availability and rate changes. If properties discount heavily immediately after peak periods, the market may be more seasonal than the annual average suggests.

The calendar should show what drives each period, not simply label months as high or low.

Use More Than One Short-Term-Rental Metric

No single performance figure explains a market. Occupancy can look strong because rates are low. A high average nightly rate can look impressive while the property remains empty for much of the year.

Use comparable listings that genuinely resemble the proposed property. A luxury waterfront house should not be used to justify the projected income of a basic inland apartment merely because both sit in the same postcode.

Validate Data Instead of Accepting One Dashboard

Short-term-rental data platforms can provide useful estimates, but they should not be treated as audited financial records. Results may be affected by blocked owner-use dates, inactive listings, unavailable properties, different cleaning-fee treatment and estimated rather than confirmed bookings.

Cross-check market data with live listing searches, local managers, tourism information, event calendars and long-term rental evidence. Where possible, compare several sources rather than relying on one automated projection.

Count Competitors, Then Assess Their Quality

The number of listings is only the beginning of competition analysis. A market with many poorly presented or inconsistently available properties may offer a different opportunity from a market dominated by highly reviewed, professionally photographed and actively managed listings.

Compare the accommodation guests will actually see when searching for the proposed dates, group size and property type. Review location, capacity, bedrooms, bathrooms, parking, outdoor areas, amenities, reviews, cancellation settings and minimum-stay requirements.

Do Not Ignore Hotels, Motels and Serviced Apartments

Airbnb listings are not the only competition. Hotels, motels, holiday parks, resorts and serviced apartments may serve the same guests and can respond quickly with promotions, loyalty programs or event pricing.

Compare what those operators offer at similar prices. A hotel may provide daily service, reception, pools, parking and flexible cancellation. A house may compete through privacy, kitchens, outdoor space, pet facilities and group capacity.

Look for Guest Needs That Competitors Do Not Serve Well

Differentiation should solve a real guest problem. Adding an expensive feature because competitors do not have it is not enough. The target guest needs to value the feature and be willing to choose or pay more for it.

Depending on the market, useful gaps may include larger family capacity, multiple bathrooms, secure parking, pet-friendly facilities, accessibility, workspaces, boat parking, equipment storage, outdoor entertaining or accommodation close to a specific venue.

Read reviews of competing accommodation to identify repeated complaints and compliments. Reviews may reveal concerns about noise, parking, cleanliness, heating, cooling, bed comfort, internet, stairs or distance from attractions that raw revenue data cannot show.

Use Review Mining to Improve the Location Brief

Guest reviews can reveal location-specific needs before a property is purchased. Repeated comments about difficult parking, long walks, unreliable internet or poor heating may point to risks that cannot be fixed through styling alone.

Positive reviews can also show which features guests value most. If guests regularly praise walkability, secure equipment storage, a fenced yard or proximity to a wedding venue, those factors can be added to the property brief.

Check Regulation Before You Rely on Revenue

Short-term-rental rules can vary by state, council, planning zone, property type and owners corporation. Registration, fire-safety, parking, guest limits, day caps, planning approval or local management requirements may apply.

An apartment may also be affected by strata or owners-corporation rules. Current operation by another owner does not prove the proposed property can lawfully or sustainably operate in the same way.

Complete regulatory checks before making an unconditional offer or relying on projected short-term-rental income.

Assess the Local Operating Ecosystem

A market can have strong guest demand and still be difficult to operate. Short-term rentals depend on reliable people, services and systems between every booking.

Before buying, investigate the availability and cost of cleaners, linen services, maintenance trades, emergency support, waste removal, lawn care, pool servicing and property management. Regional and peak-season markets may have limited service capacity precisely when demand is highest.

Remote ownership adds another layer. A property that requires frequent owner intervention may not suit an interstate buyer unless a reliable local team and clear management process are already available.

Interview Local Operators Before Buying

Local property managers, cleaners and maintenance providers can reveal operational issues that market reports do not show. They may know whether weekends are difficult to staff, whether linen services are limited or whether properties regularly struggle with mould, salt exposure, snow access or guest damage.

Ask for actual service pricing and capacity rather than assuming a team will be available after settlement.

Move From Region Research to Street-Level Research

Two properties in the same suburb can produce very different guest experiences. The final location decision should therefore move from state and region to town, suburb, street and individual property.

Guests experience the immediate surroundings, not the suburb average. Noise, steep access, difficult parking, unsafe road crossings, nearby construction or a long walk back from the beach can reduce booking appeal even when the property appears close on a map.

Visit the Location at Different Times

Desktop research can miss important street-level details. Where practical, inspect the area during the day, at night, on a weekend and during a quieter period.

A peaceful weekday street may change when a nearby venue operates. Beach parking may be easy in winter and difficult during summer. A short walk may feel unsafe or inconvenient after dark.

Match the Property Type to the Local Guest Profile

Location research and property selection cannot be separated. A market that works for couples may not support a large multi-bedroom home, while a family destination may not generate enough demand for a small studio.

The property should comfortably support the intended guest count. Bedrooms alone are not enough. Bathrooms, living space, dining capacity, parking, kitchen facilities, outdoor areas and heating or cooling should match the number of guests advertised.

Investors comparing property types can also read the WTP guide to choosing between a house and an apartment for Airbnb. The answer should depend on the market, property, strata position, purchase price and intended guests rather than a universal preference.

Check Whether the Property Can Deliver the Promised Experience

A location may support a particular guest segment, but the property still needs to deliver what that guest expects. A family property should provide safe and practical shared spaces. A premium coastal stay should offer a genuinely strong location or experience, not simply coastal-themed styling.

Model Net Income Instead of Headline Revenue

Revenue estimates are not profit forecasts. A location may support a high nightly rate while also carrying expensive cleaning, management, insurance, utilities and maintenance.

The WTP resources and calculators can assist with general property scenarios, but assumptions should be checked against real local operating quotes and appropriate financial advice.

Calculate the Break-Even Occupancy

A useful stress test is to estimate how many booked nights the property needs each month or year to cover its operating and ownership costs. This should be based on net accommodation revenue rather than the advertised nightly rate.

Begin with realistic annual expenses, then estimate the average amount retained from each booked night after platform, management, cleaning and other variable costs. The result provides an approximate break-even booking requirement.

This is not a forecast or guarantee. It helps show whether the property requires an unusually high occupancy level merely to cover costs.

Use Three Financial Scenarios

One revenue figure creates false confidence. Model at least three scenarios so the investor can see how the property behaves when rates, occupancy and expenses change.

The buying decision should not depend on the strongest scenario being achieved.

Create a Realistic Setup Budget

A short-term-rental property may require substantial spending before the first guest arrives. Furniture is only one part of the setup.

Always Test the Long-Term Rental Fallback

A short-term-rental strategy can be affected by changing rules, weaker tourism, new competition, management problems or personal circumstances. A viable long-term rental fallback can provide another option if the original strategy becomes unsuitable.

Fallback analysis should use genuine long-term rental comparables rather than assuming the property will achieve a premium because it is furnished. Check vacancy, tenant demand, likely lease conditions and whether the layout appeals to local residents.

The property may also need to be sold one day. Consider whether owner-occupiers and conventional investors would value it without the Airbnb business, furniture or historic booking data.

Investors deciding between strategies can read the WTP comparison of long-term investment properties and short-term rentals.

Test More Than One Fallback Strategy

Long-term rental is not the only possible fallback, but every alternative should be supported by evidence. Depending on the location and property, medium-term accommodation, corporate stays or resale to owner-occupiers may be relevant.

Include Insurance, Climate and Physical Location Risk

Some tourism markets are exposed to bushfire, flood, cyclone, coastal erosion, storm, access or insurance risks. Those risks can affect both property ownership and guest demand.

An attractive waterfront or bush location may involve higher premiums, larger excesses, exclusions or periods when the property cannot operate. Evacuation access, emergency information and the reliability of utilities may also matter.

Obtain insurance indications before committing, then complete property-specific due diligence through the appropriate professionals and authorities.

Consider Infrastructure and Access Disruption

Guest demand may depend on roads, airports, ferries, rail, snow access or regional services. Closures and disruptions can reduce bookings even when the property itself is unaffected.

Check whether the location has alternative access, reliable utilities and practical support during peak weather or holiday periods.

Build a Shortlist Instead of Choosing One Favourite Market

Beginning with one emotionally preferred location can lead investors to justify evidence rather than compare it. A better process is to create a shortlist and assess every market against the same criteria.

Scoring does not remove judgement. It makes assumptions visible and allows weaker markets to be removed before time and money are spent sourcing individual properties.

A Practical Airbnb Location Scorecard

Use the same scorecard for every shortlisted market. The purpose is not to create a perfect mathematical answer. It is to stop one attractive feature from hiding several serious weaknesses.

Red Flags When Assessing an Airbnb Location

A Safer Research Sequence Before You Buy

The location process should narrow the market before the search becomes focused on attractive listings.

Use a Final Decision Gate Before Making an Offer

Before moving from research to negotiation, confirm that the opportunity passes every major part of the strategy. One strong metric should not override a serious legal, financial or operational weakness.

The Location Is Only the Beginning

After settlement, performance still depends on setup quality, photography, listing positioning, pricing, availability, reviews and operating systems. Buying in a strong location does not guarantee that an individual listing will perform well.

The property needs to be positioned against its real competitors and priced across changing seasons, lead times and booking patterns. Owners who already have a property can review Airbnb revenue management and optimisation support for the operating stage.

Location research gives the investment a stronger starting point. It does not replace the work required to launch, manage and continually improve the accommodation.