Policy: Switching Between Long-Term Leasing & Short-Term Stays
Property Providers vision is to, “Help People Live Better” through being Sydney’s most flexible residential rental company. This vision is driven by 3 core values: Passion, Performance and Partnership. Importantly, we seek profit not through dollars and cents but through the pursuit of our guiding principle that all meaningful long-term partnerships have a strong foundation of mutual investment, respect, risk and commitment. We aim to create these virtues in all our relationships and touch points with long-term leasing tenants, short-term rental guests, employees, suppliers, partners and our property owner partners.
To clearly communicate Property Providers Policy in relation to the transferring a property between short-term rentals and long-term leasing (or vice versa).
Property Providers is positioned as Sydney’s most flexible residential rental agency (and offers 6 different rental services). Our moto is that it is “Your Property, Your Way”. We encourage our partner owners to leverage the full breadth of our service range to suit what their individual situation and of course both their short-term and long-term goals. Many of our owners take advantage of our unique ability and willingness to switch between long-term and short-term rentals. As stated, we support pivoting between products however it is important to recognise that short-term stays and long-term leasing operate under different legal frameworks with differing marketing channels, operational systems, separate trust accounts and in some cases different staff members. Therefore, it is important to have structure in place regarding switching between rental models to avoid confusion and conflict for all parties. There is also the consideration of the purpose of the occupant of the property to keep in mind. In relation to short-term stays, the occupant of the dwelling is a guest, who is requiring temporary accommodation. Juxtaposing this when long-term leasing a property the occupant (tenant) requires a primary or principal place of residence. Therefore, the occupant’s needs and expectations vary dependant on their rental model. By managing this process several times, we have identified the traps & pitfalls of switching between rental models and have drafted the policy to provide structure and clarity around the process.
- To be clear, concise, consistent, reasonable, and provide a fair operational framework.
- To effectively manage expectations on all sides of equation (I.e., internally, to guest/tenant and to owner/investor).
- To proactively anticipate and avoid confusion, conflict, and costs for all parties.
- To adhere to regulatory and compliance.
- This policy has several different elements and components to it and so has been structured as follows:
Assessment & Confirmation:
- Should the owner wish to switch rental models, they must notify Property Providers in writing with as much notice as possible.
- Property Providers will then conduct an onsite inspection at the property to determine if it is appropriate to switch and report on what is required to do so before an agreement to switch is made. (I.e., painting, carpet cleaning, re-stocking of crockery/cutlery etc.).
- Should the owner confirm they are willing to adhere to our recommendations the switch can be organised. Or at this point your request to switch can be respectfully denied by the agency if the property is not suitable for the alternate rental offering.
- For the rental model switch to be approved, the owner must commit to the chosen model for a minimum period of 6 months to make it worthwhile conducting the changeover. I.e. A property cannot flip back and forth constantly as this can create confusion and conflict.
- An initial upfront commitment of 6 months is where the agency defines whether an occupancy is long-term or short-term. Importantly short-term rentals that begin as less than 6 months as an initial term and then extend beyond 6 months are still considered a short-term rental as the occupant’s intent remains that they require the property for temporary accommodation purposes.
Contracts, Finance & Legal:
- A switching cost of $150.00 + gst will be charged to the existing owners’ ledger at the time of being advised/notified that the rental structure is changing.
- Appropriate management agreements will need to be in place as there are different costs, processes and legal frameworks that are required.
- Owners must also be aware that a short-term property has different government regulations that need to be followed, including registering the property with Fair Trading and fire safety compliance regulations.
- Owners must understand that Property Providers use different software for short term renting vs. long term leasing and therefore owner payments will be made on different dates and statements will look different dependant on the model chosen. If this happens mid-year – in no case will the accounts be aggregated into a single statement, so the owner will have 2 EOFY statements for that year.
- It is the owner’s responsibility to understand their strata by-laws in relation to rentals and what is/is not permitted.
- The owner is responsible for having the correct insurance required for the rental model they are choosing to operate on.
Operations & Cleaning:
- Owners understand that when transferring between properties extra charges for cleaning can occur due to the different styles of renting.
- Connection or disconnection of utilities including but not limited to; Electricity, Gas, Water, Internet, Foxtel etc. are solely the responsibility of the owner.
- It is our standing recommendation that Internet/Wi-Fi in a furnished property is never disconnected to enable switching rental models to be smoother. If Property Providers is required to meet trades at the property to assist in connecting/disconnecting services our labour rate card will apply.
- If the internet is not working when tenants/guests move into the property, Property Providers reserve the right to provide guests with a pocket Wi-Fi dongle and recharge at the owner’s expense.
- If Property Providers are required to organise, order, and manage deliveries on the owner’s behalf to make the property guest ready then labour rates will apply. Vice Versa if we are required to organise disposal of items then labour and disposal costs will apply.
- If owner returns in between switching they need to ensure enough time is provided to conduct the switch after their departure, i.e., getting guest ready.
- At the time of switching, it is to be assessed what marketing package the owner is currently on and what upgrades/ new marketing packages are appropriate to drive results and achieve desired outcomes. Any current or previous marketing commitment will expire on its original renewal date.
- The agency also requires enough time to update the property’s advertising to ensure it is accurate and reflective of the property’s current condition. In some circumstances new photographs may be required.
- When transferring a property’s rental offering between short-term stays or long-term leasing, Property Providers requires the property to be vacant for a minimum of 1 week from the end of the existing in-house rental to ensure a smooth and professional transition.
- At the end of the existing in house stay, the Property Manager will be responsible for conducting an onsite inspection at the property, in the form of the below:
- For long-term leasing: An outgoing condition report. This can take several hours especially for furnished properties. If damage is discovered the legislation provides consumer rights for the tenant to go back and rectify the damage themselves (often it is cleaning!) or by using their trades and incurring the costs directly. This coordination of this communication and planning can take far more time that people anticipate.
- For short-term stays: The property manager will need to not only conduct a post exit clean inspection, but they will also need to complete our, “Guest Experience Review Process.” This checks that the property is “guest ready” and provides insights into what needs to be fixed if it is not. Then time is required to sort out any last minute fixes or additions that need to be made.
Switching between rental models is more complex than it may initially seem. We are happy to provide our owners this option as part of our flexible service offering but need to manage it appropriately to ensure the best results for all parties involved.
We feel the above policy supports our company value of Partnership. We feel it is important to collaborate to effectively drive results.
Time is required to do this properly. Property Provider’s core purpose is to “Help People Live Better;” we believe that it is important to give our staff and partners reasonable preparation time to do their respective jobs to execute a rental model switch.
- Checklist for switching between long term leasing & short term rentals
- Switching between long term & short term rentals – Watchouts!
Effective Date: This policy is effective July 1st 2021