The Short-Stay Accommodation Boom: Is Airbnb Still Viable in 2026?
- Joshua Flack
- Jul 14
- 3 min read
Updated: 7 days ago
TL;DR
Short-stay accommodation can deliver higher gross yields than long-term rental, but it's not the easy money it once looked like. Regulation has tightened, councils have introduced rules and rating differences, management is intensive, and crucially, banks treat short-stay income cautiously when assessing your borrowing. This post takes a disciplined look at whether short-stay still stacks up in 2026 and what it does to your lending.
Short-stay went from secret hack to mainstream strategy to regulated industry.
In 2026 it can still work, but the easy version is gone. Higher gross yields are real, but so are the management burden, the regulatory exposure, and a problem most investors don't see coming: what short-stay income does to your ability to borrow.
The Yield Case
The appeal is straightforward. A property that rents for $600 a week long-term might gross significantly more as a short-stay let in a strong location, particularly in tourist or business-travel markets.
That gross premium is real in the right location. But gross isn't net, and net is where short-stay gets complicated.
The Costs the Gross Number Hides
Short-stay income comes with costs that long-term rental doesn't:
Cleaning between every stay
Higher wear and consumables
Platform fees
Management (if you're not doing it yourself, which is a real job)
Vacancy between bookings, especially off-season
Furnishing and maintaining the property to a guest standard
By the time you net all this off, the premium over long-term rental is smaller than the gross headline suggests. Sometimes much smaller.
The Regulatory Squeeze
This is where 2026 differs from the early years. Short-stay is regulated now:
Councils have introduced rules, registration requirements, and night limits in some areas
Some councils rate short-stay properties differently (higher)
The main home exclusion and tax treatment get complicated where short-stay is involved
Rules can tighten further, so the model carries regulatory risk
What's viable today can be restricted tomorrow. That's a real risk for a strategy that depends on the rules staying favourable.
The Lending Problem
Here's the one that catches investors out. Banks treat short-stay income cautiously for serviceability.
Long-term rental income is predictable, so banks count it (at around 75%) toward your borrowing capacity. Short-stay income is variable and seasonal, so banks discount it heavily or in some cases barely count it at all.
That means a property earning strong short-stay income might support less borrowing than the same property on a long-term lease, because the bank won't recognise the variable income the same way. If you're planning to keep growing your portfolio, short-stay income can actually constrain your next purchase.
When It Still Makes Sense
Short-stay can still be the right call when:
The location genuinely supports premium short-stay demand year-round or near it
You've netted off all the real costs and the premium survives
The local regulations are stable and favourable
You're not relying on the income to support further borrowing
You're prepared for the management intensity, or to pay for it
Where This Leaves You
Short-stay isn't dead, but it's a disciplined operational business now, not a passive yield hack. The gross premium is real, the net premium is smaller, the regulation is tighter, and the lending treatment can hold back your portfolio growth.
Run the net numbers, check the local rules, and understand what it does to your borrowing before you commit a property to it.
The way different income types affect your borrowing capacity is exactly the kind of thing that's invisible until it blocks your next deal.
At CRISP, we model how short-stay versus long-term income affects your serviceability, so you can choose the rental model with the full picture, including what it does to your next purchase.
Relevant tools and resources available for free here:
Other relevant articles to check out:
About the Author:
Joshua Flack is a mortgage and lending adviser and the founder of Crisp Financial. Before finance, he spent two decades running businesses across construction, facilities services, and franchising, which is why his advice starts with how the numbers actually work rather than how the brochure says they should. He works with home buyers, investors, and self-employed borrowers across New Zealand, with particular depth in complex and non-standard lending. Crisp Financial Limited (FSP1012114) operates under the Link Financial Group FAP licence. The information in this article is general in nature and is not regulated financial advice.
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