RESOURCES: Getting on with the business of Holiday Rental

Whether you’re a newbie rental owner or a seasoned manager, there is no doubt that the short term rental market brings with it a bewildering array of considerations; some legal, and some just plain common sense!

Holiday Rentals in Australia are affected by: Corporations Law, the Trade Practices Act 1974, the Fair Trading Act 1999, the Estate Agents Act 1980 – and there are even elements of the Innkeepers Act to consider. Confused yet? It gets better.

What’s more, short-term property rentals have spent a lot of time in the media – sadly usually for all the wrong reasons – so whether you are an owner or a manager it absolutely pays to be squeaky clean with your documentation and policies.

The good news is that there is a wealth of information available online. This should allow you to create a rental system around your own circumstances.

Note: Once you have done this it would then pay to get this reviewed by a professional. There are a few legal advisors who specialize in this space such as Atherton Advisory (who also offer a periodic rental workshop).

First and foremost though though remember that you have a duty of care to your guests – so do ensure that you install basic fire protection such as smoke detectors, fire blankets and fire extinguishers.

The six-point checklist

So, other than having a safe and sanitary house what do you need to do before renting out your holiday home? We’ve put together a 6-point checklist:

1. Put together a Letting/Rental Agreement

This is probably the most important part of your rental ‘system’. Our research into this area uncovered the Real Estate Institute of NSW (REINSW) ‘best practice’ guidelines. These contain loads of relevant content for property managers that are relevant for single occupancy owners too. See point 3 for the things to cover in a rental agreement.

To make it easy, you can define your Rental Terms online with Bookastay and send a copy of these out as part of a Booking Statement (PDF) in any communications you send through the website.

2. Defined your House Rules

An often overlooked tool in the Owner Manager tool kit. House Rules are the effectively the ‘contract’ that the renter has agreed to abide by and can have the effect of clearing up any possible disputes before they even start.

They are also useful in providing neighbours and other interested parties with a level of comfort that you are serious player, and take the needs of the community into consideration.

We recommend you make your House Rules part of your Rental Agreement (add them as Other rental terms).

3. Establish a key management system

Loads of options here to get the keys into your guests hands depending on your circumstances. Will you offer a high touch experience, with keys at the gate and chocolate on the pillow? Or will the location of your property necessitate a more hands-off approach, such as leaving the keys with a trusted neighbor, or even posting them out. 

See our article on How to manage key collection

4. Itemise your household inventory

It is important that you have an inventory of the contents of your property that can be checked in with your guests. Either the owner or local agent should politely point out that if the visitors break equipment, if they are glasses for example then they should replace, if it is more serious - bed, window etc, then immediately report it. Again, this item can be contained within the house rules.

5. Check your Insurance

Make sure that you hold appropriate insurance. Make sure your home and contents insurance cover short-term holiday rental. Also,  be sure you havecomprehensive landlords’ and public liability insurance (as appropriate).

6. Put together a property manual and visitors guide

Provide a ring bound folder with some notes about the property - how the hot water system works, where the rubbish should be put, information on local shops, restaurants and attractions etc.

It is suggested that the emergency services numbers are included in this book.

More Info

For Owners and Managers: The Victorian Department of Consumer Affairs has produced an excellent publication that provides an overview of your legal obligations – summed up nicely in a sub 10 minute read. This one is a MUST read:

Download VIC DCA guide (PDF)

For Property Managers:  If you’re interested in getting more to the coal-face then the annual conference on short-term rentals  run by REINSW is definitely worth a look. Bookastay attended this conference in 2011 and as well as being an enjoyable affair, it attracted a number of out of state real estate folk too.

Finally, we intend to update this article with more resources as we come across them. If you know of something that should be added please let us know.

IMPORTANT: This article is an opinion piece. It does not constitute legal or financial advice. We recommend you seek professional advice from your accountant and/or lawyer about your specific situation before you enter the private accommodation rental business.