Rapid development and uptake in uncrewed aerial vehicles (UAVs) for environmental monitoring, specifically using three-dimensional data from LiDAR and structure from motion (SfM), has enabled improved condition assessment, including fine-scale erosion monitoring. Comparing the precision of LiDAR and SfM for measuring erosion is essential in enabling appropriate method selection. Additionally, knowledge regarding optimal flight heights allows for consideration of the trade-off among survey areas, flight times and precision. We assessed UAV-based LiDAR and SfM for providing high-precision digital surface models (DSM) of substantial gully erosion on a conservation reserve in the southern Australian arid rangelands. The gullies exist in low-slope chenopod shrublands with calcareous soils, and are of significant management concern, with erosion occurring rapidly over short periods following irregular and intense rainfall events. Root mean squared error (RMSE) values for SfM-derived DSMs with resolutions of 2, 4 and 6 cm were lower than comparable LiDAR datasets (SfM = 0.72–1.39 cm; LiDAR = 2.08–3.15 cm). Additionally, 2 cm SfM-derived datasets exhibit notably lower RMSE values than 4 and 6 cm datasets (2 cm = 0.72 cm; 4–6 cm = 2.08–3.15 cm). Change detection over the 1-year study period highlighted erosion in locations of management concern. We propose that, although both methods are of value, SfM is preferred over LiDAR because of its simplicity, reduced cost, and the additional monitoring capabilities of visible-colour imagery, with no notable sacrifice in precision. Visible-colour survey areas and times can be optimised by increasing flight height without dramatic losses in precision. The use of either method will be of great benefit for the monitoring of arid gully erosion and assessing the effectiveness of management interventions, allowing adaptive management and leading to improved condition of arid rangelands into the future.