MGT3SMG: Airbnb vs. Real Estate Agency Models-Strategic Analysis

This report analyzes two property management strategies—long-term leasing through real estate agencies and short-term rentals via Airbnb—to identify which model delivers higher net revenue for a client owning 30 properties across Melbourne suburbs (Bundoora, Kingsbury, Preston, and Heidelberg West), with an even 15-15 split between the two approaches. The evaluation includes market research on median rents and occupancy rates, revenue estimation adjusted for efficiency, cost analysis incorporating management and operational fees, and net annual income calculations. Results indicate that Airbnb properties, despite lower occupancy (60% vs. 90%) and higher management complexity, yield greater annual revenue ($340,256) compared to agency-managed properties ($279,856). Based on these findings, the report recommends increasing Airbnb-managed properties in Bundoora due to high returns, maintaining a 50-50 split in Kingsbury and Preston for risk balance, and conducting further research for Heidelberg West. Overall, a hybrid rental strategy is advised to optimize profitability while mitigating market risks.