Despite large numbers of investors leaving the property sector as they feel the pinch of ongoing interest rate rises, Orange's short-term rental market continues to pay dividends for property owners with a long-term view.
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According to short-term rental research company AirDNA, occupancy rates in Orange are robust and were the same in March 2022 as they were in March 2023 which is 66.5 per cent.
Orange investor Weston Ryan purchased his property at 46 Byng Street in January 2019 for $648,000 and has been successfully operating it as a short-term rental ever since.
Ahead of renting the property out, Mr Ryan made a number of upgrades, including purchasing new furnishings, painting the property throughout and installing a new reverse-cycle air-conditioning system.
For personal reasons the four-bedroom house in the heart of Orange's historic CBD is heading to auction on May 6 with a guide price of $1.2 million to $1.3 million.
Mr Ryan said while the investment has paid dividends, would-be short-stay accommodation investors need to be aware of both the ups and the downs of this sector of the market.
"It's been a great investment for us," he said.
"I think there's a lot more accommodation coming on-line in Orange now with hotels and things like that so I think you have to offer something a bit special."
He said having a property in a good location, which is nicely presented, is key but it's important you consider how much you want to be involved in running the property yourself.
"I think you can have a lot of fun if you're doing it yourself, it can be quite rewarding," he said.
He cautioned that if you choose to rent via a third party it can be costly depending who you link with.
He said it's also vital that you're meticulous with your finances and dealings with the Australian Tax Office.
According to Mr Ryan current market conditions mean inventors aren't getting the same cash flow they once were, however there are still good returns on investments at sale time.
"I think there's still plenty of growth left in Orange," he said.
One Agency Orange's principal Ash Brown said many of the buyers who have inspected Mr Ryan's Byng Street property, which his company is selling, are considering continuing to use it as a short-term rental.
He said the property is what a lot of buyers and investors are looking for.
"I feel that the position is the best possible in Orange," he said.
"Plus it's close to Cook Park, and the best restaurants and cafes in Orange."
In fact Mr Brown has another property for sale at 44 Hill Street which is currently being used for short-term rentals and many potential buyers also plan to continue using it as a short-term rental if they buy it.
"It's got an extra living area, plus a bigger block, and is only a few doors from Kite Street, which rivals Byng Street," he said.
The Hill Street property is going to auction on May 6 with a guide of $1.3 million to $1.4 million.
He said One Agency Orange recently sold a short-term rental property at 47 March for $1.29 million with the new buyers planning to keep operating it as a short-term rental.
According to Mr Brown, as the property market returns to normal beyond the COVID high, there are plenty of gains to be made by investors with a long-term view of the market.
Mr Brown said the old adage that if you can hold on to real estate for the long-term you will do well, rings true.
He said investors able to hold on to their properties for five to 10 years will see healthy returns but people looking for a short-turn around may not.
"The market is back to normal prior to COVID and Orange is renowned for its good steady growth," he said.
Peter Fisher Real Estate's Michael Wright, working with Ashleigh Bock, is taking a two-bedroom property at 43 Franklin Road to auction on May 13 with a price guide of $600,000.
The seller is an investor who has been renting out the property however he now wants to sell it to take advantage of an investment opportunity in Sydney.
"It's been fully occupied; it's a nice property in a good position," Mr Wright said.
He said he expects the Franklin Road property to appeal to first-time buyers or investors wanting to enter the short-term rental market.
Mr Wright said while there have been properties come to market because "the edge is too fine" as a result of the recent increase in interest rates, he believes Orange isn't as impacted by adverse market conditions as many other locations.
He said he recently spoke to someone with an Airbnb property in Orange which is still "renting its socks off" with occupancy rates of 70 to 80 per cent.
However Mr Wright has heard from a number of sources that visitor bookings are now more "last minute" than they were a year ago, adding additional stress for the investor.
"[However] As a whole I think we've held very well as a market," he said.
"The rental market is still very strong with probably half-a-per cent vacancy or less, and that's a really good base for the market."
With nearby Blayney's McPhillamys Gold Project proceeding, Mr Wright expects demand for additional accommodation to bring an extra boost for the Central West property market.
According to AirDNA spokesperson Madeleine Parkin while short-term rental demand has slowed its rapid growth in the last few months, the sector remains strong.
"Property managers are probably feeling that slowdown quite dramatically, as the year-over-year growth dropped off from over 100 per cent in September to single-digits since November, picking up slightly to 12 per cent in March," she said.
"However, this is still 74 per cent more nights stayed than in March 2019.
"Meanwhile, supply is still growing, with a small dip in January and February, though this could be second home owners using their own properties in the summer rather than selling up, as supply increased again in March."
McGrath Estate Agents Orange's Rebecca Hammond, who heads up the company's local short-term rental division, said while the heat may have come out of the short-term rental market, generally there are higher returns to be made from this sector than from other options such as serviced accommodation or long- term leases.
She said her business works with property owners to determine what works best for them as market conditions, and their own circumstances, change.
"Choice is key to be able to shift from short-term to long-term to serviced or sale, depending on the current market demand."
Tracey Prisk
I am a writer on the national property team and I cover real estate news in Orange, Bathust, Dubbo, Wagga and the Blue Mountains. I was previously the editor of the Central Western Daily for six years and before that worked as the CWD's chief of staff. During this time I also wrote feature stories for Country Style magazine. Before joining ACM I was a film writer and reviewer at the Sunday Telegraph. I was previously the editor of the film and television magazine Encore and also wrote for Broadcast Engineering News.
I am a writer on the national property team and I cover real estate news in Orange, Bathust, Dubbo, Wagga and the Blue Mountains. I was previously the editor of the Central Western Daily for six years and before that worked as the CWD's chief of staff. During this time I also wrote feature stories for Country Style magazine. Before joining ACM I was a film writer and reviewer at the Sunday Telegraph. I was previously the editor of the film and television magazine Encore and also wrote for Broadcast Engineering News.
