Holiday Rentals advice??

Hello people

Apologies if I am in the wrong section but I was hoping to seek some advice from anyone who uses one of their properties fro short term rentals.

I have a furnished house in Rosebud I was hoping to use for holiday rentals. I realise the market is strongest over summer but I have just finished cleaning it all up!!

My questions are:

Do you get tenants to sign any lease/ rental agreement?

Do you charge a bond? If so how much i.e. if they stay a week do you ask for a weeks bond also or stay a monthly get a month bond?

Is it a different type of landlords insurance that covers short term rentals?

If they ask to stay for a couple of months would you recommend they get the bills on in their names or charge extra and leave the bills in your own name?

Last of all please share any good / bad experiences that you have had that might give me something to think about!

Thanks people I appreciate any comments you may give me as I am a complete novice at this type business:p

Warm Regards

PackedLunch
 
I don't know the answers to your questions, however there are some potential pitfalls on short term rentals from a tax point of view.

a) To claim a deduction for most of the expenses related to the property, you will need to establish that the property was available for rent for close to whole year.

Let's say that you can get $5,000 a year for renting it out for a month or rent it out for the whole year to one tenant at $5,000 a year. On the surface the returns look the same, but if you factor in the potential undeducatble costs if it is only available for rent for a month of the year (IE. 11 months of interest undeducatble) then the return for the whole year after tax looks a lot better.
 
Haven't done it. Sorry.

You would need to speak to agents in the area. And then come back here to verify advice given!

Depreciation is different for holiday rentals. The house can be depreciated at 4% not 2.5% (well, it used to be... check it out). But that could mean that the house has not many years before depreciation runs out (if any).

You can depreciate furniture depending on its life.

Holiday rentals should be common in Rosebud. You really need to check with the agents.
 
Hello people

Apologies if I am in the wrong section but I was hoping to seek some advice from anyone who uses one of their properties fro short term rentals.

I have a furnished house in Rosebud I was hoping to use for holiday rentals. I realise the market is strongest over summer but I have just finished cleaning it all up!!

My questions are:

Do you get tenants to sign any lease/ rental agreement?

Do you charge a bond? If so how much i.e. if they stay a week do you ask for a weeks bond also or stay a monthly get a month bond?

Is it a different type of landlords insurance that covers short term rentals?

If they ask to stay for a couple of months would you recommend they get the bills on in their names or charge extra and leave the bills in your own name?

Last of all please share any good / bad experiences that you have had that might give me something to think about!

Thanks people I appreciate any comments you may give me as I am a complete novice at this type business:p

Warm Regards

PackedLunch
you don't ask for a bond for a weeks stay or overnight properties however most have credit card id etc incase of damages

in the right area you can make quite a bit with holiday properties in the high season for example say 150 a night $6300 over xmas alone you will also have cleaining bills unless you live close by and do it yourself I know of one in the marina in herevey bay made $64900 if self managed this would of been a good return just went under contract for 590k. can also be risky though buy a property no one wants to stay in and have to large a discount it might be better to buy a permanant rental investment property..
 
We rented holiday home in Victoria for our extended family to stay in for our son's wedding.

It was a private arrangement although the property was listed on realestate.com, probably a friendly RE agent.

We were sent application forms, had to pay a $500 bond, and paid extra for linen supply as we were travelling from interstate. We had to send a copy of our driver's licence with the application.

It all went well, communication was good, keys left in pre-arranged spot, bond refunded promptly. We did have concerns but it all turned out OK.
Marg
 
Depreciation is different for holiday rentals. The house can be depreciated at 4% not 2.5% (well, it used to be... check it out).

Nope. Never been the case. There is higher Building Write-off (4%) for 'short term traveller Accomodation, but a holiday house or holiday apartment, or serviced apartment etc won't fit the definition.
 
We rented holiday home in Victoria for our extended family to stay in for our son's wedding.

It was a private arrangement although the property was listed on realestate.com, probably a friendly RE agent.

We were sent application forms, had to pay a $500 bond, and paid extra for linen supply as we were travelling from interstate. We had to send a copy of our driver's licence with the application.

It all went well, communication was good, keys left in pre-arranged spot, bond refunded promptly. We did have concerns but it all turned out OK.
Marg

stayed in many holiday rentals around qld and have never paid a bond however always asked for a cc drivers license etc last one was in
Burrum Heads for a week stay
 
I think that there are great websites you can advertise the place on.

Then you need someone local to manage the key and do the cleaning between visitors.

A REA is often used but sometimes people pay a nearby stay at home Mum or retired person to manage the day to day stuff.

I have stayed in such places before and they can be really lovely. Much nicer than a little motel room with a dodgy telly and a bar fridge!
 
I don't know the answers to your questions, however there are some potential pitfalls on short term rentals from a tax point of view.

a) To claim a deduction for most of the expenses related to the property, you will need to establish that the property was available for rent for close to whole year.

Let's say that you can get $5,000 a year for renting it out for a month or rent it out for the whole year to one tenant at $5,000 a year. On the surface the returns look the same, but if you factor in the potential undeducatble costs if it is only available for rent for a month of the year (IE. 11 months of interest undeducatble) then the return for the whole year after tax looks a lot better.

Thanks PP!

I'm going for the all out approach of renting (Hopefully) as a holiday rental for the period Nov through Easter and then looking for someone to take up a six month lease in between. Obviously I may be looking for something I may not be able to achieve:p.
An added benefit of the holiday rental option is that I can use it as a holiday house for myself/ family when not leased out.
 
you don't ask for a bond for a weeks stay or overnight properties however most have credit card id etc incase of damages

in the right area you can make quite a bit with holiday properties in the high season for example say 150 a night $6300 over xmas alone you will also have cleaining bills unless you live close by and do it yourself I know of one in the marina in herevey bay made $64900 if self managed this would of been a good return just went under contract for 590k. can also be risky though buy a property no one wants to stay in and have to large a discount it might be better to buy a permanant rental investment property..

Yep fair enough. The license and credit card option would at least allow me to have them tracked down for expenses if things went wrong! I'm hoping to do all this privately as well, which may casue extra issues if tenants get nasty. It's an older house but one well loved.

I already own the property ( Half share with the bank) so I'm not overly concerned with it being vacant at times. I could just let it out on a standard long term lease but I look around and see the easy money on offer;) can't help but give it a go.

Thanks for the advice.
 
Nope. Never been the case. There is higher Building Write-off (4%) for 'short term traveller Accomodation, but a holiday house or holiday apartment, or serviced apartment etc won't fit the definition.

Ok. Fair enough. I'm sorry to provide misleading information.

So what is the definition of short term holiday rental? A fully furnished house with everything included, available for a minimum of a single weekend, is not a short term rental? That's a pity. Especially as the value of the asset is likely to decline much faster than a long term rental, I would have thought.
 
There is an ATO ID on this, but essentially the pattern of usage i.e. how long people stay there, is irrelevant. It's the nature of the property itself that counts.

Let's say you own a flash unit in a building up on The Gold Coast. Or an apartment at Thredbo. Or a serviced apartment in Perth. And those complexes each have on site managers, a restaurant etc. And nobody ever stays there longer than a week.

Logic suggests that they are 'short term traveller accommodation'.

The test is could somebody live in the property comfortably is they chose to? They would have bathrooms, kitchens, bedrooms etc so the answer is yes.

So what does fit the definition?

If you bought a room in a Sheraton that only had a bar fridge and a kettle, that would fit because you couldn't really live in it. Or if you own ten units in the same building, that passes the test.

We had a client who owned a serviced apartment. She had a lease agreement that prohibited anybody living in her apartment. She thought that might sway the ATO and let her claim 4%. It didn't.

When I bought my place at Port Macquarie, it came with an indicative Depreciation Schedule prepared by a big QS group I won't name. They had the building at 4%. I called them up and pointed out their error. They weren't terribly interested and said it was up to people's accountants to be on top of that.

This 4% vs 2.5% thing is a very easy way for the ATO to catch unwitting people out.

ATO: ‘We notice you are claiming 4% on the building. Tell us about the place.’
Taxpayer: ‘Oh, it’s lovely. Apartment on the beach. Pool, gym, restaurant….’
ATO: ‘Apartment?’
Taxpayer: Yep. It’s a beauty. Balconies off every room. I saw dolphins last time…
ATO: ‘Kitchen?
Taxpayer: ‘Oh, yes. Great kitchen. Better than my one at home. Stainless steel appliances, one of those fridges that makes ice cubes…’
ATO ‘Oh dear.’
 
Some research would help you out considerably

Holiday letting and short term rentals is a growing industry in Australia. Take a look at the following sites for research on how the experts are cashing in.
www.rent-a-home.com.au
www.yesbookit.com.au
www.stayz.com.au
You can self manage, use a web manager or use a local agent - the choices are quite good.
But expect to pay considerably more for holiday let management than conventional residential property management. The reason is, it's just harder work.
 
I can comment from experience in owning a (gorgeous beachside) property that there are both pluses and minuses associated with this type of investment. However for the most part, the returns can far outstrip permanent residential yields with the added bonus of being able to enjoy the place in quiet times, or whenever I feel the need to kick back and enjoy the coast.
 
I can comment from experience in owning a (gorgeous beachside) property that there are both pluses and minuses associated with this type of investment. However for the most part, the returns can far outstrip permanent residential yields with the added bonus of being able to enjoy the place in quiet times, or whenever I feel the need to kick back and enjoy the coast.

Thank you all for the responses, it really does help to get advice of people who have hadmore experience than I in this area. I love this forum!

Happy to advise I have now placed a tenant in the home until the start of November,which means the house will be available during summer or peak season when I can charge a higher premium. Loving it.

Cheers
 
PL, Can be a very good earner depending on location. One of mine is a 2Br min 4 nights stay. High season returns around 400 per night. Well sought location. It is in a service block but management only pay around 3K if they handle it.
 
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