Investing on the Peninsula: rentals, holiday lets and the costs

The Peninsula's investment story has two halves.

Steady tenants: Western Port and the working towns

Hastings, Crib Point, Bittern, Somerville and Tyabb have permanent populations, train stations and local employment, so they have year-round tenant demand. Lower purchase prices there generally mean the rent covers more of the holding cost than in the beach towns.

Land value: bayside

Mornington, Mount Martha, Mount Eliza and the Sorrento–Portsea end are where buyers pay for land and location. Rents are high in dollars but low relative to the price, so the return is mostly in the land — and land values move in both directions.

Holiday lets

A well-run holiday house in Sorrento, Rye or Balnarring Beach can earn more over summer than a permanent lease, but the arithmetic changed in 2025: Victoria's short-stay levy takes 7.5 per cent of the booking value, the Shire has registration rules, managers charge a commission, and occupancy outside the summer holidays is thin. Many owners run a hybrid — holiday let in summer, a six-month lease over winter. Model it with real quotes before you buy.

Land tax

Any property that is not your principal residence attracts Victorian land tax above the tax-free threshold, and Peninsula land values put most beach houses over it. It is often the single biggest holding cost — use the SRO's land tax calculator on the actual site value.

Due diligence

Check the planning overlays (bushfire, erosion, vegetation), whether the block is sewered, and the Shire's rules on second dwellings and short-stay registration. Get a current appraisal and recent comparable sales from a local agent.

Sources

• State Revenue Office: short stay levy
• State Revenue Office: land tax
• VicPlan

Rules and thresholds were checked in October 2026. They change — confirm with the source before you sign anything.