While the thought of sitting back while easy money rolls in is tempting, there are some serious legal and financial considerations to make before renting your apartment or room out on websites such as airbnb.com or stayz.com.au. Whether a home or apartment, it’s worth checking all aspects of the potential short-term lease arrangement or Holiday Rental Agreements to make sure you’re not dealt with a hefty tax bill or fine.
The main issue in apartments is whether the building by-laws allow you to let a room, or your apartment, for short-term stays at all. Generally, a 3-month minimum means that anything shorter is a no-no. Then there are local council zoning provisions, which, if your building is zoned long-term or permanent residential only, take precedence over building by-laws.
Strata laws vary from state to state, so it’s important to go through the details with a
fine-tooth comb before you put yourself at risk.
There is also the taxman to consider. If you are earning income from renting out your room, apartment or home, it will need to be declared as such, and the relevant tax contribution be given over. Similarly, it’s best to check with your insurance company if short-term stays are covered by your policy – as you don’t want to be left with damage that is not covered.
It’s also worth adding up the costs of having a short-term stay property to see if it makes financial sense. With the need for regular cleaning, ongoing house supplies, potential increase in bills (short-term renters are less likely to be concerned with wastefulness), and also in insurance (which may require you to upgrade to a business policy that covers hotels or B&Bs), it’s not as simple as it first appears.
The moral of the story is – do your research (ALL of it), before you make any decisions and put your property out there.