NSW government changes position on short-term rental platforms

By |
While it is currently reviewing the legislative framework that online short term accommodation portals operate under, the New South Wales government has indicated it is likely to become more accommodative of their use in the state.

The government this week released a position paper on what has become commonly known as the “collaborative or “sharing” economy, which will guide the government’s efforts in areas such as adapting regulations to keep pace with technological advances and ensuring consumer protection guidelines are adequate.

“Digital innovation is transforming the way people do business in every city and every country around the world. The reality is the collaborative economy is here to stay,” NSW Minister for Innovation and Better Regulation Victor Dominello

“We are living in the information age and it is vital that government policies embrace new technologies and enable businesses to operate with certainty,” Dominello said.

According to a report from Deloitte Access Economics, commissioned by the state government, the sharing economy in NSW was worth around $504 million in 2015, with more than 50% of consumers using a digitally enabled shared product or service including accommodation, transport, education, employment and finance.

But while the position paper may lead to online accommodation platforms such as Stayz and Airbnb moving out of the grey area they currently operate in, Don Binkley director of Property Providers, which manages and operates short-term rentals in Sydney, had some words of warning for people considering venturing into the industry on their own.

“People underestimate what goes on, it’s not a set and forget thing. You have to make sure sheets are changed, you need to ensure that getting people access to the property is seamless and you have an obligation to make sure any issues are dealt with rapidly,” Binkley said.

“From an idle capacity point of view people think it can be a way to have a ‘paycation.’ But if you’re doing that do you want to be woken up at 2:30 in the morning when you’re overseas because someone’s having trouble with something like connecting to the internet?” he said.

With short-term rentals offering attractive returns, especially over peak holiday periods, Binkley said many people are tempted to go it alone to maximise the money coming into their pockets.

“People sometimes think they can save some money if they do it themselves. But in the long run people can easily cost themselves a lot more money, especially if they have to start giving out refunds if people aren’t delivered what was promised,” he said.

“If you start getting negative reviews you can start losing money. As soon as you get those negative reviews you lose the social currency you have and you can’t charge as much.

“A lot of people try and do this over the Christmas period, but that’s when it gets harder and harder to get hold of tradies to fix a problem or have the cleaners come in between stays. But an agency will probably have some leverage via volume of service, so people will be more likely to work for them.”

Binkley believes that those who go it on their own are also more likely to not understand market dynamics, which will again impact their level of return.

“The reality is we do this for a living and we know how much a property is worth. People think they might have a feel for the value but we know.

“For example, in the Mosman area we look after 70% of what’s available there and when the cumulative occupancy gets above 78% or so, the price goes up. It’s simple supply and demand.

“The other thing that will happen is that people will make a sale and then get excited. That’s when they make a four night booking in October that costs them a three-month stay in August.”

While Binkley recommends anybody considering opening up their property for short-term stays should use an agency, he recognises not all will do so.

“For those people who do want to do it themselves I recommend they familiarise themselves with things like the Holiday Rental Code of Conduct.

“You also need to consider your insurance risk. Do you have the right insurance coverage and have you notified your insurance provider of what you’re doing?

“You need to have robust terms and conditions that limit your liability and have clear policies and procedures in place that you adhere to and they need to be policies that are proactive in dealing with issues.”
 

Can you afford to buy in this suburb? Find out how much you can borrow

Top Suburbs : collingwood , stafford hts , lockridge , melton , rockville

go back
Comments
  • Trisha HOST2GO Comfort Short Stay says on 21/01/2016 07:20:51 PM

    This is a great article and clearly outlines some of the pitfalls and areas for consideration before jumping in and Hosting without any prior knowledge, research or experience.

    Hosting and providing short-stay accommodation requires a lot more work and planning than most property owners realise. As the government starts to play catch-up with introducing legislation and frameworks to address the shared economy short-term accommodation, it's much easier for everyone involved if you get it right from the beginning.

    As a result of the overwhelming demand we developed a comprehensive business system for property owners to self-manage the entire process short-stay accommodation as a Host. The system is called HOST2GO. It's a very comprehensive product that covers; strategy, due diligence, property evaluation, pricing, sales, budgeting, property presentation, listing on airbnb, customer interaction and day to day management, including 25+ management templates.

    We recommend to anyone interested in hosting online through airbnb or any other website to do their research first. If you want to save the blood, sweat and tears buy our program otherwise you can do it yourself. Don't hesitate to contact me if you would like more information.

Get help financing your investment



Do you need help finding the right loan for your investment?


When investing in property, it is important to make sure that you not only have the lowest available rate that you can get, but also have the correct loan features for your needs.

Just fill in a few details below and we'll then arrange for a local expert Aussie Mortgage Broker to contact you and work out what features or types of loans are right for your needs. We'll even help with the paperwork. Plus, our mortgage broking service is at no cost to you.

How soon would you like a mortgage?
What is your Annual Household Income i $
Do you currently own any Investment Properties?
Do you own your own residence?
How much equity do you have in all your current properties?
First Name
Last Name
Where do you live?
What number can we reach you on?
E-mail address
We value your privacy and treat all your information seriously - you can check out our privacy policy here