The first thing people ask me about running an Airbnb on a lease is how much money they need. The answer is a range, because it depends on the rent, the size of the apartment and how much you spend on furniture.
For most of our members, we suggest budgeting around $10,000 to $15,000 for the bond, some rent in advance and the furniture. When Terence and I leased our first apartment in Melbourne in 2023, we each put in $15,000. This guide breaks the number down line by line, shows a worked example, and covers the costs that arrive after the first booking.
The short answer
The costs fall into three groups:
- Before the first booking: the bond, rent in advance, furniture and setup, insurance and listing photos.
- With every booking: Airbnb's fee, cleaning, laundry and supplies.
- Whether or not anyone stays: rent, utilities, internet, maintenance and wear and tear.
The first group is what you need in the bank on day one. The other two decide whether the property actually makes money.
Before the first booking
1. The bond
When you take a lease in Victoria, the landlord can ask for a bond, which has to be lodged with the Residential Tenancies Bond Authority. For weekly rent of $900 or less, the bond is capped at one month's rent. Consumer Affairs Victoria's own example is a rent of $500 a week, where the most you can be asked for is $2,167. You get the bond back at the end of the lease, as long as there are no damage or unpaid rent claims. Above $900 a week the cap does not apply, so premium apartments can cost more up front.
2. Rent in advance
In Victoria, a landlord cannot ask for more than one month's rent in advance when the rent is $900 a week or less. If you pay weekly, the limit is two weeks. This is rent for the start of the lease, not an extra cost, but it is cash you need on day one, and you spend the first weeks paying for an apartment that is not earning yet. It took us three weeks to fit out our first place, which meant three weeks of rent on an empty property.
3. Furniture and setup
This is the biggest and most variable cost. An Australian short-stay management company estimates a modest one-bedroom setup at about $5,000 to $7,000, and $8,000 to $15,000 for larger or more premium places. Treat those as ballpark figures. The real number depends on the building, the quality you choose and what you already own.
We overspent on furniture by thousands because we bought what looked good rather than what earns. Spend where guests notice: the bed and mattress, linen and towels, a working kitchen, reliable Wi-Fi and an easy way to get in. Setup also covers more than one set of linen per bed so the next guest can arrive while the last set is in the wash, toiletries and cleaning supplies, a lockbox or smart lock, and listing photos.
4. Insurance
Standard renters' and landlord policies are built around long-term tenancies and usually exclude short-term guests, so read the product disclosure statement instead of assuming you are covered. Airbnb says its host damage protection is not an insurance policy, so it is not a substitute either. Get quotes for short-stay cover before you sign the lease, because it belongs in your budget.
5. Read the building's rules before you spend anything
This is not a cost on its own, but it is the most expensive mistake to make. Since 1 January 2025, Victorian owners corporations can make a rule banning short stays, if 75% of lot owners support it. The rule cannot apply to a lot that is the owner's or occupier's principal place of residence. An apartment you lease only to run as an Airbnb is not your home, so it is exposed. Read the rules before you sign the lease, not after. Councils can also have their own requirements, and Victoria has no state-wide short-stay register, so check with yours.
Costs that come with every booking
Airbnb's fee
Airbnb's help centre describes two fee structures. Under the split fee, most hosts pay 3% and the guest pays their own service fee on top. Under the single host-only fee, the host pays the whole fee, which industry sources put at about 15.5% in Australia for hosts connected through software. Check your host dashboard to see which one applies to you, because it changes what you keep from every booking.
Cleaning, laundry and supplies
Every stay ends with a clean, fresh linen and restocked basics. This is usually the largest variable cost, and it grows with the number of guests you host, not the number of nights. Shorter stays mean more turnovers. Get quotes from local cleaners before you set your cleaning fee, and compare them with what similar listings in your area charge.
The Short Stay Levy
Victoria charges a levy of 7.5% of the total booking fee on stays of less than 28 consecutive days, which has applied since 1 January 2025. The booking fee includes the nightly rate, cleaning fees and GST. On Airbnb bookings, the platform collects and pays the levy. If you take bookings directly, you register with the State Revenue Office and pay it yourself.
Costs whether or not anyone stays
Rent is due every week, whether the apartment is booked or not. So are utilities and internet, plus repairs and wear and tear. The weeks before your first booking and the quiet weeks afterwards come out of your own pocket, so keep a cash buffer for the first few months.
It also helps to look at what reaches you, not what the guest pays. On our first booking, the guest paid $625 and $521 came through to us, for a two-night stay against weekly rent of $480.
A worked example
Assume rent of $500 a week and a modest one-bedroom apartment.
| Item | Low | High | Where the number comes from |
|---|---|---|---|
| Bond (one month's rent) | $2,167 | $2,167 | Consumer Affairs Victoria's example for $500 a week |
| Rent in advance | $1,000 | $2,167 | Two weeks if you pay weekly, one month if you pay monthly |
| Furniture and setup, modest one-bedroom | $5,000 | $7,000 | Industry estimate from an Australian short-stay company |
| Total | $8,167 | $11,334 |
That is roughly $8,200 to $11,300, before insurance, listing photos and a cash buffer. Add those and you can see why we suggest budgeting $10,000 to $15,000. A higher rent, a bigger apartment or a more premium fit-out will push the figure up.
How to keep the up-front cost down
- Ask to pay rent weekly, which lowers the most you can be asked to pay in advance.
- Furnish for what guests use, not for what looks good in photos.
- Get insurance and cleaning quotes before you sign.
- Start with one property and learn what earns before you take a second.
- Get the landlord's consent in writing and check the building's rules before you buy anything.
Questions people ask me
How much does it cost to start an Airbnb on a lease in Melbourne?
For most people it is around $10,000 to $15,000 for the bond, some rent in advance and the furniture. On rent of $500 a week and a modest one-bedroom, those three items come to roughly $8,200 to $11,300, before insurance, photos and a buffer.
How much is the bond for a rental in Victoria?
In most cases it is capped at one month's rent, when the weekly rent is $900 or less. It is lodged with the Residential Tenancies Bond Authority and returned at the end of the lease if there are no claims.
How much does it cost to furnish an Airbnb in Melbourne?
One Australian short-stay company estimates $5,000 to $7,000 for a modest one-bedroom and $8,000 to $15,000 for larger or more premium places. Your own number depends on the building and the quality you choose.
Do Airbnb hosts in Victoria pay the Short Stay Levy?
The levy is 7.5% of the total booking fee on stays of less than 28 consecutive days. Airbnb collects and pays it on bookings made through the platform. If you take bookings outside a platform, you register with the State Revenue Office and pay it yourself.
What fees does Airbnb charge hosts in Australia?
There are two structures. Under the split fee, most hosts pay 3% and guests pay their own fee. Under the single host-only fee, the host pays the whole fee, which industry sources put at about 15.5%. Check your host dashboard for the one that applies to you.
Can a building ban short stays after I sign the lease?
Yes. Since 1 January 2025, a Victorian owners corporation can make a rule banning short stays with 75% support. The rule cannot apply to a lot that is the owner's or occupier's principal place of residence, so an apartment you lease only to host guests is exposed. Read the rules before you sign.
If you want the full picture on the rules, read rental arbitrage in Australia, and how it actually works. For the model itself, here is how to run an Airbnb without owning property, and the free training walks through it step by step. If you would rather read about the business first, here is how it started.
This is general information about the rules and costs as they stood in October 2026, not financial or legal advice. The worked example is an illustration, not a quote. Check with Consumer Affairs Victoria, the State Revenue Office, your council and a professional before you commit to a lease.
Sources
- Consumer Affairs Victoria, bond amounts and payments
- Consumer Affairs Victoria, residential rental agreement form (the $500 a week example)
- Tenants Victoria, starting a tenancy (rent in advance)
- Youth Law Australia, starting a tenancy (weekly rent)
- State Revenue Office Victoria, understanding the short stay levy
- Consumer Affairs Victoria, making rules to ban short stay accommodation
- Airbnb Australia help centre, service fees
- Hometime, setting up your first Airbnb (setup cost estimates)
- Hometime, Airbnb hosting fees in Australia (host-only fee)
