But he advised his landlords to let their homes and apartments to long-term tenants, often with longer leases to avoid re-advertising fees.
“Rents have really gone up in a lot of areas, and in many cases you’re looking at a rental yield of 5% to 5.5%, which is really, really good,” he says.
“For short-term rentals, however, you have to factor in cleaning costs and management costs and all the extra work that comes with that.
“If you have three or four properties, you can balance that by doing it full time, but otherwise you’ll be paying a pretty penny for the service. Also, you might find it difficult during the winter months when it becomes less desirable for visitors to go there or when people eventually return to work.
Rents have generally been high in most regional areas, increasing by more than 50% in some areas as tree changers on city wages move in and premises leave the market.
The town of Crescent Head in New South Wales has seen the highest rent increase over the past year in the country, at 54.5% according to the Estate House Rental Report for the final three months of 2021, with South Hedland in Western Australia seeing a 47% jump.
“High rents and low vacancy rates in regional areas have put pressure on landlords to sign longer-term residential leases,” says Emily Sim, managing director of property management at Ray White Group. .
“Tenants have such a hard time finding a property that they want to hold on to it.
“So I would say there’s nothing wrong with investors entering into long-term leases, after negotiating rent increases in advance. It can be a win-win for both parties. Short stays can be great, but the risks are higher, there is more wear and tear on the property, and you still have to pay income tax.
Plus, if you intend to stay on your own in your property, you won’t be able to claim as many tax breaks and expenses, Harris advises, and you could miss out on the most lucrative income at the most popular times.
“It might be wiser to stay in a hotel when you want to go,” he says.
This story first appeared in Domaine Prestige magazine.