The old investment adage of “bigger is better” is being dismantled by the short-stay market. Data from 2025 shows that 1-bedroom luxury modular homes are delivering up to 3x the net yield of traditional 4-bedroom family rentals. We dive into the numbers.
For decades, the standard Australian investment play was a four-bedroom, two-bathroom house in the suburbs. But as mortgage rates remain high and the cost of living bites, that traditional model is failing the “yield test.”
While a large family home might command a respectable weekly rent, the net return is often swallowed by high entry costs, land tax, and maintenance. In contrast, the “niche luxury” segment—specifically 1-bedroom
1. The Occupancy Edge: Couples vs. Groups
Data from major short-stay platforms indicates that 1-bedroom properties consistently maintain higher occupancy rates than larger homes. Why? Because the largest segment of the traveler market consists of solo professionals and couples.
The 4-Bedroom Booking Problem
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The 4-Bedroom Problem: You are reliant on large groups or multiple families. These bookings are often restricted to weekends and school holidays.
Capturing the High-Value Midweek Market
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The 1-Bedroom Advantage: You capture the midweek corporate traveler, the romantic weekenders, and the “digital nomad” looking for an
off-grid luxury sanctuary
2. Higher Nightly Rates per Square Metre
Why Modular Villas Command a Premium
In real estate, we measure success by RevPAR (Revenue Per Available Room). A 4-bedroom house in a holiday town might rent for $800 a night ($200/room). A single
Superior Return on Capital (ROC)
When you factor in that the modular villa costs a fraction of the 4-bedroom house to build and install, the Return on Capital (ROC) is vastly superior. You aren’t paying for empty bedrooms; you are paying for a premium, high-utilisation asset.
3. Maintenance and Turnover Efficiency
Ask any property manager: cleaning a 4-bedroom house after a group of eight people is an expensive logistical hurdle.
90-Minute Cleaning Turnarounds
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1-Bedroom Modular: Can be professionally cleaned and reset in under 90 minutes.
Reduced Wear and Tear
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Lower Wear and Tear: Fewer guests mean less damage to floorboards, walls, and appliances.
As we discussed in our recent look at the
4. The “Instagrammable” Premium
Reducing Your Marketing Spend
In 2025, travelers don’t just want a bed; they want an experience. A standard suburban house doesn’t get shared on social media. A sleek,
The Investor’s Verdict
If your goal is passive income with minimal overhead, the data is clear: scale down the size and scale up the luxury. By focusing on high-end, 1-bedroom modular assets, you are entering a market with lower competition and higher margins.