Short term rentals: Profit spinner or risky move?

Written by in Investment on January 30, 2017

Need some motivation to finally clear out the junk in the spare bedroom? How does a hefty financial reward sound – say, $150 a night?

That’s how much savvy homeowners (and renters) are earning by renting out their spare space as short-term rentals.  

A raft of online platforms like Airbnb and are making it easier than ever to not only rent out your home when you’re away, but to rent out your spare bedrooms – and even your sofa – when you’re still at home!

But are short term rentals genuinely a strong profit spinner – or are there too many hurdles to jump through in order to make it work?

With many recovering from an extra long Australia Day weekend, we thought it was the perfect time to dive into some of the ins and outs of short term rentals:


More and more people are embracing the concept of private short term rentals. But before you get too excited about becoming a holiday-let landlord, it’s important to understand that not all properties are eligible for short-term letting.

The law is constantly being tested in this regard, but as it stands, many body corporates and strata committees don’t allow properties to be sublet as holiday homes, without formal approval. This is largely due to safety concerns, as it means an increase in the number of unknown visitors to the apartment.

Takeaway tip: If you live in an apartment and you would like to lease it out as a holiday home, or you’re considering investing in a property simply for this purpose, make sure you check with the body corporate first that it’s allowed. You can face hefty fines if you’re found to be in breach of the strata bylaws.


It’s one thing to make your property available to holiday-makers. It’s quite another to market it to the most possible eyeballs!

It makes sense to list your property across a number of platforms, including Airbnb, Stayz and, to give yourself the biggest possible opportunity of finding a tenant. This is especially the case if you decide to invest in a property specifically to lease out as a holiday home.

Takeaway tip: In order to make the most out of your investment, you need to treat your holiday home like a business. This means checking into each platform daily to manage enquiries; promptly and politely corresponding with enquiring guests; and keeping the property well maintained and clean between visitors.


Did you know that most standard home insurance policies, including landlords insurance, are null and void if you rent the property to short-term holiday-makers?

The simple reason for this is risk. Insurance all comes down to risk: the risk of damage to the property, the risk of someone hurting themselves in the property, the risk of someone failing to pay for their stay in the property.

With a high turnover of tenants, these risks become higher. Your insurer may perceive that a property with 50 separate holiday tenants in one year will become more damaged than a home rented to one long-term tenant for that same period.

Takeaway tip: Home and contents insurance for short-term rentals is a specialised industry, and Canstar reports that it’s growing in response to consumer demand. There are a number of specialist insurers who can help you secure adequate coverage for your property.

Overall, is it worth buying into the holiday letting market? For many property owners, it is proving to be a profitable path forward, but prospective holiday home landlords need to be aware that it requires extra time, effort and energy than a standard lease. If you have spare time and the ability to actively market and manage your investment, this could be just the profit spinner you were after!

Looking for other ways to boost your rental return? Cash in on student housing for 2017 >>