Thinking about a short-term let? This new legislation might make you think again

With its music festivals, supercars, and great food, wine and scenic experiences Newcastle is now on the tourist radar as a hotspot of exciting events and great activities.

Some property investors might be tempted to forget about long-term rentals and go for a short-term holiday let via some of the online booking services.

However, there are a few points to consider if you’re thinking of doing a short-term let.

New regulatory framework

Newcastle City Council has indicated it will adopt the new regulatory framework to govern the short-term holiday letting industry introduced by the NSW Government last year.

The framework aims to address impacts such as noise levels, disruptive guests and effects on shared neighbourhood amenities, by reducing the amount of time permitted for short-term rentals to 180 days per year where the host is not present at the property. (If the host is present during the stay, this timeframe does not apply.)

There is a mandatory code of conduct, with complaints procedures and a strike system for any behaviour that unreasonably interferes with a neighbour’s quiet and peaceful enjoyment of their home.

Guests or hosts who commit two serious breaches of the Code within two years will be banned for five years and placed on a register.

Strata owner corporations also have the power to introduce by-laws prohibiting the short-term letting of houses or apartments in their block if they are not the principal place of residence of hosts. This means you will need to check with your strata corporation if you can actually lease the property on a short-term basis.

For more information about the new regulatory framework, visit the NSW Fairtrading website – www.fairtrading.nsw.gov.au/news-and-updates/news/new-short-term-holiday-letting-regulations

Do the figures add up?

With the new regulatory framework expected to come into play this year, property investors will have to look at the figures. For many properties, the majority of income is only earned during the summer months, and then they are left empty. Will you earn enough over those summer months and/or the 180 days?

Short-term lets also generally involve other costs; the property needs to be fully furnished, and will need other essentials such as kitchen utensils and bed linen. Because of the regular usage, you may well have to replace them more frequently due to increased wear and tear.

More work

From an ‘operational’ point of view, short-term lettings involve marketing the property regularly, managing cleaning and changing of linen between lettings and additional paperwork for your tax return.

And you’ll need to work on the guest experience to keep satisfaction and drive the online guest reviews.

Why a long-term let maybe the better option

There is probably less outlay to prepare the property for rental, and using an agent means you’ll get your property marketed correctly and your prospective tenants properly screened.

Once the property has been tenanted, there is a regular income for the next 12 months, enabling you to budget properly as you work towards your financial goals.

Most importantly, you haven’t got the stress of having to manage the property between bookings, and if you are using an agent, you haven’t got the stress of managing tenants and managing repairs and maintenance.

As we’ve been in the business for over 40 years, we have a wealth of experience behind us when it comes to letting property.

If you want to know more about letting your property and our property management services, our experienced team would love to help.

We work hard to ensure your property is leased with reliable and good tenants, and we take the stress out of marketing, managing and running your property and looking after your asset.

Simply give us a ring on 02 4956 9777, send us an email to mail@newcastlepropertymanagement.com.au or pop into our Cardiff office for a chat.

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