Converting an old lakehouse into a profitable holiday rental

This is not our first attempt at setting up an Airbnb, in fact, we have spent 15 years in the industry transforming run-down holiday houses on the Mornington Peninsula into a profitable holiday rental. This was the first house so far from my stomping ground and SO far from Melbourne. Is it too far away from all the business that exists in the big city?

Visiting for the first time, my gut said…Nope, this is a disaster but the character of the property shone through and really we just couldn’t resist.

Nobody had loved this property for a very long time and it had been rented out for years and left to rot.

But it was only a short distance from the centre of the beautiful Metung Village on the Gippsland Lakes and (we found this out later), had its only private pathway to the water (bonus)!

The house although looking very run down, was structurally very sound and built on a concrete slab with stone foundations.

BEFORE: this tired old cedar house needed some tlc and some modern beach house colours

Before we started any work we cleared out all the carpet and curtains and polished the boards so that we could see what we were working with. And we spent many weeks at the house to get a sense of the design concept we wanted.

What’s a design concept? Well its the vision for the property and you need to have vision before you do anything else.

You need to consider the surroundings, the architecture of the property and how it will be used. We knew this was going to be used for holidays with kids and pets. We also knew that the beautiful wooden interiors needed to be the focal point.

We decided to keep things simple and created a “Coastal Scandinavian” feel. That meant we could recycle furniture, buy second hand items and add texture with fabrics, rugs and sheepskins.

Outside we loved that Hamptons look and thought that the exterior would shine with dark wood and white trim.

lakehouse renovation
AFTER: Painting the woodwork a blue/grey and the trim all white completely transformed the house.

The renovation had to address all the wood inside and so in some instances where we had narrow shiplap panelling we chose to paint everything white to create a much larger feel to a low ceiling in the downstairs lounge.

BEFORE: The lounge was very dark and overbearing with low ceilings and no heating.

It was essential that we create a spacious room but it had to feel cosy if it was going to meet the needs of the prospective guests.

So the simple solution was what appeared to be white paint but was in actual fact a slight blue/green/grey white with a pure white for the ceiling. The floorboards had been polished and in the cellar the boards had also been insulated.

The stunning floors came up a treat and made the white walls even more special.

We kept the colour scheme very neutral and fitted a wood burner as the cosy central focus.

holiday house interior styling
AFTER: The ceiling painted in pure white along with the skirting and window frames, the paint for the walls was Dulux Tranquil Dawn Quarter Strength.
property styling gippsland
AFTER: The sofa has removable covers – highly recommended for holiday rentals – this sofa was an ebay find. The Oars on the wall were salvaged from the local tip and we did nothing to the doors to the lounge as they were dripping in character and patina.

Furnishings were mainly recycled items from eBay, gumtree or marketplace and we did find some unique pieces at Rustique but again many of these were salvaged second-hand items.

The goal for us is to always buy expensive items a low prices and this means second hand for us.

Our best bargains were many pairs of oars that are scattered throughout the house (and which gave it its name The Oarhouse) from the local tip. The sofa was an Early Settler sofa which we picked up for $300 and had recently been refurbished and stuffed with feathers. Bonus! A lovely pink chest of drawers for the children’s room cost $30.00.

upcycled furniture
AFTER: an old chest of drawers already painted created a pop of colour in the children’s bedroom, we just added some handles.

Mixing old and new furnishings is what we love most, it allows us to integrate interesting pieces of furniture with character and a story to tell. There is so much more depth when everything has age and patina, your senses wake up to the specialness of the rooms and it creates that WOW! for your guests and a profitable holiday rental.

BEFORE: a rather uninviting dining room. The hall and dining were made of roughly hewn wood which was hard to paint so we made up a whitewash in the same colour as the walls in the rest of the house and voila!
holiday house styling
AFTER: The whitewashed wood came to life. Ceiling is painted with Dulux ceiling white.
metung holiday house
AFTER: We decorated the walls with Oars and Fishing tackle baskets rather than artwork to keep a more rustic Scandinavian feel


We were fortunate that the kitchen was the one thing in the house that didn’t need any renovating apart from a coat of paint and a new dishwasher but the old laundry had seen better days. Laundry and Kitchen are costly exercises so we kept it simple.

AFTER: we painted the old broom cupboard white and added a rustic piece of furniture as storage.

The bathroom was another story. It was well past its use by date and had to be completely redone. We used a freestanding vanity from Schotts which was our one indulgence.

BEFORE: No room to move, a tiny bath that you couldn’t fit into and no waterproofing to speak of.
bathroom renovation holiday house
AFTER: The bath was chosen to be as deep as possible with it being too difficult to get into. The vanity and toilet locations were swapped giving the room m ore space. Subway tiles and wood effect tiles for the floor. Mirror is Freedom Furniture

Bedroom Design

When deciding on the bedroom designs comfort and space is always the main consideration along with heating and cooling. We wanted to keep the wooden floors throughout but each bedroom had a large rug for comfort. The main two bedrooms were also fitted with overhead fans and reverse cycle heater/air conditioner.

BEFORE: a dark uninviting room with wallpaper from the 1950s.
interior styling and staging
AFTER: King Size bed from our own range. A king size bed is a must if you have the room and are planning a holiday rental. Recycled furniture from Ebay and wooden bench at the foot of the bed from Rustique

Commercial Linen

Comfortable mattresses are key to a great guest review and King Size beds are essential if you have the room and will add to your profitable holiday rental. Because mattresses impact guest reviews more than anything else you should buy the best you can afford. Our range of mattresses can be found on our website or email us with an enquiry.

As for bedding, we know that commercial bedding is the best option. Buy white linen that can hold up to commercial washing. In these days of coronavirus, it is essential that you launder linen at a commercial laundry to ensure high temperatures in washing and drying. White linen can always be bleached if heavily stained with makeup and suntan lotion but coloured linen cannot. You will find our commercial linen is of great quality.

Our favourite Airbnb and holiday rental sheets are a 50/50 poly-cotton blend. They feel fresh and for a coastal property are the best option. Linen Supplies
AFTER: We used a stunning rustique decorative wheel of birch to create a dramatic backdrop for the second bedroom.
AFTER: The second hand chair has a slip cover, the sheepskin gives a nod to the Scandi feel and the cushion is made from an oilcloth.

It took months to remodel the house and as soon as it was finished it was listed on our property management website Ocean Blue Coastal Retreats, AirBnB, Homeaway and Booking.com and became a profitable holiday rental.

We received our first booking within 24 hours and then the bookings started to pour in.

After 9 months we had quadrupled what we expected to make in income for the property making it a profitable holiday rental. With the property being so far away from Melbourne we thought that the occupancy may be affected but nothing could be further from the truth.

We were approached by a couple of smaller boutique holiday rental advertisers to list the property on their websites and influencers started to enquire if they could stay.

Will we do it again? Of course, we are already on the lookout for the next project…

Do you have an Airbnb or holiday rental story you would like to share?

We would love to hear how you renovated your dream house.. or do you have a house you need our help with? Let us know and get in touch.