Industry, Investing, Long Term, Short Term

Checklist for switching between Long Term Leasing & Short Term Rentals

July 19, 2019 – 3 minute read – by Harriet Cotton

Changing from short to long term rentals can be complicated

Changing from short to long term rentals is more complicated than it seems.

Following on from our blog “Switching Between Long and Short Term Rentals – Watchouts!” we have devised a comprehensive checklist outlining the differences between the two types of rental and who is responsible for what under each model.

For those who are unaware there are significant differences between traditional long term rentals and short term stays.  Under a long term lease, the residents of the property are tenants, they lodge a bond with the bond board, they sign a REINSW lease agreement and pay their rent fortnightly or monthly. The property manager normally charges a letting fee and a property management fee. Leases are normally between 6-12 months long and tenants have extensive rights under these agreements.

With short term stays these can be any length of time under 6 months, varying from 7 days to 5 months.  Those staying in the property are guests, they have paid for their stay upfront and agree to terms and conditions vs. signing a formal document. The property management company normally charges a booking commission, property management fee and contribution towards cleaning and linen.

Check out the below info-graphic which highlights the differences between the two:

Long-Term Leasing vs. Short-Term Stays Comparison Infographic

The below chart outlines what’s involved for the owner and the agent depending on the type of rental being orchestrated:

Switching between Long-Term to Short-Term Rentals    
     
  Short-Term Stays – whats involved FURNISHED – LT Leasing – whats involved
Documentation STS Mngt Agreement LTL Mngt Agreement
Legal Framework Commercial Contract – Licence Land Stock & Agents Act
Fees and Charges    
Letting Fee No Yes
Property Mngt Fee Yes Yes
Booking Fee Yes No
Service P-Mngt + Hospitality Property Mngt
Marketing Up to 15 different channels RE.com and Domain
Homeguide Required Not Required
Inclusions    
Furniture Required Negotiated
Appliances Required Required
Soft Furnishings Required Negotiated
Cookery/Crockery Required Negotiated
Utilities – Gas/Electricity Owner Tenant
Internet/Foxtel Owner Negotiated
Water Usage Owner Split
Insurance Required – Standard Required – Standard
Maintenance    
Garden Maintenance Owner Negotiated
Bedding & Linen Owner – PP to Provide Optional
Pool Owner Negotiated
Setup Clean Owner – PP to Provide Owner
Exit Cleaning Owner – PP to Provide Tenant
Regular Cleaning Guest – PP to Provide Tenant
Garbage Disposal Guest & Owner Tenant

As you can see there is a lot to bear in mind for both types of rental, and assisting moving between the two can be outside the scope of property management.  While we are happy to offer guidance and assistance, owners must accept responsibility for actioning the changes required to operate these two types of rental.

If you have any questions, please do not hesitate to ask us, and we look forward to offering you our flexible services.

Happy Renting!

Property Providers is Sydney’s most flexible residential rental agency.  Our core purpose is “To Help People Live Better” through providing long-term luxury leasing, super luxury holiday homes and executive rentals for extended stays.  If you are interested in listing your property please contact us on +612-9969-7599 or if you are looking for a tenant or guest who is looking for a handpicked home please visit our website or brief us here

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