It turns out that the place where people can get the most bang for their buck renting out a spare room on Airbnb is a town perched in Northern NSW, about 300km from Australia's east coast. Forget Point Piper (which has the lowest short-term Airbnb rental index score in NSW), and Bondi Beach (although this tourist-favourite does index relatively well compared with other suburbs close to Sydney's CBD) - South Tamworth offers the best value in NSW for Airbnb hosts renting a spare room.
The rental index score for a suburb expresses a comparison between the estimated monthly potential income from renting on Airbnb (based on a private room for 2 guests, using Airbnb's earnings calculator) and the median sales price for unit-type properties in the area. The index values were set within a range from 1 to 100 in order rank scores across NSW. Read more about the Stacked Up App 'index score'.
South Tamworth has the highest short-term rental index score (86.2 out of 100) and one of the lowest median purchase prices for unit properties across the state. The interactive dashboard offers striking insights about the geographic distribution of potential returns from Airbnb spare room rentals, with non-Sydney suburbs consistently showing higher index scores. You can drill-down by Monthly index or index score (which compares estimated monthly rental income with median sales price) - as well as searching for specific suburbs in the highlighter bar - to see the places where properties meet your budgeting needs. Have a play! There are also some dashboards underneath with pre-loaded configurations.
The outlier suburb from Sydney is Vineyard in the North West, where the median purchase price for units is far below the Sydney average, while estimated monthly rental income is almost the same as South Tamworth at $1,291. There's a big jump to the next-best Sydney suburb in terms of short-term rental yield - South Windsor has an index score of 27.1 (just over a third of Vineyard's score), with a median purchase price almost three times that of Vineyard, and estimated monthly rental income of $1,289. Suburbs with a similar rental yield profile to South Windsor, including Werrington, Jamisontown, North Richmond, and Winston Hills, are dotted around Sydney's West.
The stand-out from Sydney's inner-city suburbs is Potts Point, with a relatively low median unit price and an estimated monthly rental income of $1,402. Apart from Rushcutters Bay, no inner-city suburbs come close to Potts Point's index score of 22.6, with the City of Sydney and Elizabeth Bay ranking next-best.
As is clear from the dashboard above, the better rental index scores are clustered in suburbs with lower median purchase prices, which are almost all outside the Sydney area. Furthermore, there is a dramatic, exponential correlation between index score and purchase price at the low-end of the scale. Finally, the third dashboard shows how there are actually an abundance of options, both inside and outside Sydney, for hosts seeking monthly rental incomes from a spare room of $1,000 or more. This is perhaps the most promising insight from the data-set: that in many places across NSW hosts can potentially subsidise their housing costs by renting a spare room on a short-term basis.