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Holiday Rentals: 4 Considerations Before You Rent Yours Out

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Property located in popular tourist areas can generate significant financial advantages for their owners through holiday rentals. Many holidaymakers now prefer looking for short term holiday rentals instead of more traditional hotel or caravan park accommodation. They can offer greater privacy, amenities and flexibility for families or groups of friends. But before renting your home or investment property this holiday season, we walk you through four key issues to first consider.

If you rent your property out as long-term residential property, you will be familiar with your state’s residential tenancy legislation. In NSW, the Residential Tenancy Act 2010 regulates issues including:

  • The Bond amount,
  • How you deal with the Bond,
  • What maintenance and repairs you must carry out, and
  • How much you can charge for water electricity and gas.

Residential Tenancy Legislation does not apply to short-term holiday rentals. Short term is usually a period of six and eight weeks, however, varies depending on your state. Importantly, you will need to confirm what restrictions apply by confirming with your local council. These can relate to noise or planning restrictions and may curtail your plans to use your property as a short-term holiday rental. Ensure that you take steps to understand what is and isn’t permissible under your property zone. You may also find researching similar holiday or short-term rental properties in the area and their zoning useful.

2. What if my Property is Under Strata?

If your property is subject to a strata scheme, you will need to review your strata by-laws and confirm that you can use the property as a short term rental and whether any restrictions or conditions apply. It is also sensible to discuss your plans with the other property owners/residents and gauge attitudes towards the idea. They may even already be renting their property as a holiday rental. If strata by-laws permit holiday rentals, your neighbours may still complain if your tenants fail to comply with the by-laws. It is then considerate to have this conversation early.

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3. Will Your Insurance Cover You?

If you rent your property as a holiday rental, check whether your insurance company will cover your home and contents insurance. If not, you should discuss updating your policy with your insurer so that it covers both using the property as a holiday rental and possible claims you will need to make.

4. Who Will Manage the Property?

Many companies, particularly online service providers, can manage your property for you. These services range from providing full management services, to providing a platform through which you can manage your property yourself.

Most service providers operate on a commission type payment structure. Importantly, before you sign an agreement, you should understand exactly what it covers, costs you may be liable for and what you may need to arrange yourself.


Renting your property as a holiday rental can be a good idea to generate extra income for Christmas presents. But you should first understand what are the requirements and restrictions imposed by your state government. Should you have any questions, please get in touch with LegalVision! We have contract lawyers experienced in drafting Owners and Guest Agreements, and would be delighted to assist!

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