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‘New Year’s Eve proof’ with holiday rental rules

By Mark Hamblyn, Terri Scheer Distribution Manager

Owning a holiday home can be a lucrative investment, especially during the festive season when demand for rentals is high.

However, ensuring a holiday rental property remains in top condition requires pre-planning. It’s critical that landlords establish clear rules for potential renters to ensure the comfort and safety of neighbours and guests while also making sure the right insurance coverage is in place.

Unauthorised New Year’s Eve parties, additional guests, noise complaints and messy or damaged properties are common and unfortunate issues that short-stay rental owners may face.

To help ‘New Year’s Eve proof’ a rental property, landlords should consider the following:

Establish a holiday rental agreement

Clearly outline the terms and conditions of the stay, including check-in and check-out times, the maximum number of occupants, and any specific rules regarding noise levels and partying. Other conditions may refer to smoking, pets, candles and sparklers, and additional cleaning fees. Include any consequences of violating these rules and reinforce the importance of respecting the property and neighbours.

To discourage guests from hosting large gatherings without permission, ensure the house rules state the property is available for residential purposes only and that any events or parties require prior approval from the property owner.

Collect a security deposit

While long-term property rentals have strict requirements about bond amounts and where they must be held, short-term rentals do not have such restrictions. Property owners, or their property manager, must determine the appropriate security deposit amount and hold the funds themselves. Clearly state the amount of the deposit in the rental agreement and outline the reasons it may be forfeited. This not only encourages guests to take greater care of the property but will also help to offset potential out-of-pocket expenses for owners should minor loss or damage occur.

Engage a property manager

An effective way to ensure the smooth management of holiday rental properties during peak seasons is to enlist the services of a professional. A licensed property manager with experience in short-stay properties can handle all the booking requirements, from initial screening, deposit collection, paperwork, key collection and informing guests of property rules.

Conduct post-rental property inspections

Landlords should ensure their property is inspected promptly after each rental agreement to identify any damage, missing items or other concerns at the property. This should be done before the security deposit is released back to the renter. In the unfortunate event that damage is identified, landlords (or their property manager) should take photographs and keep invoices as evidence of damage and replacement costs.

Have landlord insurance in place

Many guests don’t necessarily mean to cause harm, but accidents can and do happen – they’re on holiday and likely relaxed. Before the holiday season begins, holiday rental owners should review and update their insurance policies to ensure it adequately covers the unique risks associated with short-stay properties.

Landlords should look for insurance policies that specifically cover holiday home rentals for tenant damage, theft, loss of rent and legal liability.

Terri Scheer offers dedicated holiday rental insurance, Scheer Short Stay, to help owners reduce the financial burden from tenant-related risks.

Property managers should check their authority to distribute or refer before discussing with landlords or dealing in insurance.

For further information, call 1800 804 016.


Insurance issued by AAI Limited ABN 48 005 297 807 AFSL 230859 trading as Terri Scheer. Read the Product Disclosure Statement before buying this insurance and consider whether it is right for you. Contact Terri Scheer on 1800 804 016 or visit our website at www.terrischeer.com.au for a copy. The Target Market Determination is also available.

The information is intended to be of a general nature only. Subject to any rights you may have under any law, we do not accept any legal responsibility for any loss or damage, including loss of business or profits or any other indirect loss, incurred as a result of reliance upon it – please make your own enquiries. This article has been prepared without taking into account your particular objectives, financial situation or needs, so you should consider whether it is appropriate for you before acting on it.

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