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The PROPERTY DOCTORS, Sydney Australia Novak Properties
EP. 1410 “Airbnbs: Profit, Popularity & the Rules Holding Hosts Back”
Ever dreamed of making extra cash by listing your apartment on Airbnb while you're away? That dream could quickly turn into a nightmare if you haven't checked your strata bylaws first.
We dive deep into the complex world of short-term rentals in strata buildings, exploring why these restrictions exist and who they affect most. For tenants, the stakes are particularly high – unauthorised Airbnb listings can lead to lease termination, regardless of recent changes to eviction laws. Property managers have become increasingly vigilant, monitoring online listings and following up on neighbour complaints about unfamiliar faces coming and going.
Building restrictions on short-term rentals aren't arbitrary. They address legitimate concerns about security, excessive wear and tear on common areas like lifts (those suitcases take a toll!), and the disruption that high-turnover guests bring to residential communities. While beachfront properties in areas like Manly might seem perfect for holiday rentals, the same strata rules apply.
For property owners, the calculation is different but equally important. Yes, nightly rates through Airbnb can exceed regular rental income, but the increased wear and tear shouldn't be underestimated. Unlike long-term tenants who treat a property as home, holiday-makers often approach accommodation with a different mindset – sometimes even as a "party pad."
The regulatory landscape has changed dramatically too. What was once an anything-goes environment now operates under specific legal frameworks. Short-term rentals under three months fall outside the Residential Tenancies Act, creating different management challenges that most property managers prefer to avoid.
Want to know what's allowed in your building? Check your strata portal, request bylaws from your strata manager, or review your contract of sale if you're purchasing. Better yet, speak directly with your property manager before listing. Some buildings have adapted to accommodate short-term rentals, but assuming permission without verification remains the biggest mistake tenants and owners can make.
Good morning everyone. We have the beautiful Lisa Novak and myself talking about Airbnb, what it means in your strata building.
Speaker 2:I'm the ringleader, so I'm gonna Cleo good morning. Good morning, lace. How are you? Good, the blonde and the brunette and Mark had to run into a meeting. We're actually just both going into a meeting and he goes oh actually, can you just quickly do it? Threw me the phone so you should see my setup. I'm like I've got the phone on the dashboard and, yeah, we're just going to, we're just going to I don't know, wing, it won't we? And that's the reality of doing this sort of stuff.
Speaker 1:It's like, don't overthink it, just get on have a conversation and see who you can help. It's true, it's true, and there's always lots to talk about in real estate. Um, this morning we've chosen airbnb. Um, I guess this topic, coming into the winter months, isn't as relevant as when you've got, you know, coastal rentals, manly, our beautiful beaches. A lot of um tenants and owners do like to airbnb their properties when they're on holiday. Basically, um, you know, we we have a unit block that um, there is a ban on airbnbs. The owners don't allow non-host people um to airbnb that property and that usually just means not the owner. So if you're a tenant, you can't Airbnb, and that's put in as a bylaw. And if you do and it's found out, you're in breach of your lease agreement and the agent or owner can send you a termination notice. Wow, yeah, yeah.
Speaker 2:Now, is that, even with the new termination laws, cleo? Because actually I really just want to break this down, because sometimes we speak in a language that people don't understand, so can we just talk about where, if you're in an apartment and you're like, oh, I'm going to Airbnb this property, if you're an owner, what's a bylaw? Tell me what a bylaw is, just so that people can understand what we're talking about.
Speaker 1:Sure, the bylaws are the set of rules that have been designed for that unit block by all the owners in that unit block. It's also managed by the Strata Schemes Act and it is a government-enforced legislative act and you can include bylaws to tailor everyone's concerns that might own in that building. Those bylaws have somewhat changed, as you said, with the new regulations. You used to be able to put a pet van absolutely no pets. Things are a bit more relaxed now, um, but they are. You know. There are certain things within the bylaws that everyone needs to comply with.
Speaker 1:One um obvious bylaw is parking. Parking in visitors car spots, for example, it's not allowed. If you're caught parking in visitors' car spots, for example, it's not allowed. If you're caught parking in a visitor's car spot, they can impose a fine. You will then get a letter as the owner, even if it's your tenant. As the owner, you get that letter and you get the fine. So it's basically a set of rules.
Speaker 1:So, adding to those set of rules, some unit blocks have included Airbnb. If you are not the owner living in the property and you're the tenant, they can make that an enforceable breach by having you know Airbnb. And I've thought about why do people not want Airbnb? Now people well, look it just, it disrupts the building, especially if you've got a really high turnover of guests. Some people find it a security issue for that building. Um, they like to know who's living in the building, especially these little boutique blocks and what have you and um, a funny one that I saw before was um, when was looking online, was the wear and tear of amenities like lifts with suitcases and congestion of parking and things like that can really impact a unit block when you've got an influx of guests or tenants, you know, coming in and out so they don't like it.
Speaker 2:No, they definitely don't like it. No, they definitely don't. And so, guys, for anyone that's watching or that is interested, um, cleo, where can the bylaws be found? So we now know bylaws is a set of rules, but you know, I, let's say I'm an owner and I'm like I want to Airbnb my property. Where do I find the bylaws?
Speaker 1:usually there's a common area where they have a set of bylaws displayed in a cabinet. That was a very 70s 80s thing to do, but now most owners have access to their portal through Strata and you can get a copy of your bylaws easily. You could even just email your Strata manager and they'll send them over to you. They're quite a thick document. There's often a lot on there, there really is.
Speaker 2:And if you're looking to buy an apartment because I've got one at the moment that I'm selling and it's very Airbnb-able, if that's even a word you can actually find the bylaws in the contract of sale. So if you're looking to buy a property, that's where you're going to find those bylaws. So, cleo, let's just talk about it for a sec, because a lot of people just go oh, I'm going to Airbnb it because you do make a lot more money right Airbnb-ing than what you do on your stock standard weekly rental.
Speaker 1:And for a landlord, or an owner, as they call, the host, or you know, if you're living in there, that's okay, unless you know the other owners, you know, come together and they've made complaints, but tenants aren't, because they're essentially making money off the landlord. They're, you know, airbnb probably more than what they're paying for their weekly rent. So you know it's a contentious point and especially, you know what usually happens is tenants go on holidays and they're paying rent while they're going on holidays. So they think, why not just Airbnb it? And we have found tenants that have done that on the sly and we've had to, you know, penalise them when they come back, maybe not renewing their lease. The owner might, to, you know, penalise them when they come back, maybe not renewing their lease. The owner might decide, you know, they don't want them as tenants anymore because they haven't gone about it the right way.
Speaker 1:So there are things that we look for. Obviously, we go online. Sometimes it's usually the neighbours that tell us look, oh, I don't know, there's been people coming and going or they have parties and it's really loud. And then we investigate, we go online and we're like, oh, there it is for $300 a night. Wow.
Speaker 2:And you know there's a considerable amount of wear and tear on a property as well. You know a lot of people dismiss that. You know with the Airbnb because obviously, long-term rental, you've got people in there and they're homemaking. You know they're moving in, obviously they're taking out a six or 12-month lease and that's their home, as opposed to someone who's Airbnb-ing and most of the time it's okay. But you know people often are there on a holiday and sometimes they'll use it as a party pad as well. And you know this is where you know we start to fall into trouble. But the wear and tear is considerable with the Airbnb as opposed to a long-term tenant. And then, not only that, we actually don't look after the management of Airbnbs, we look after the management of longer-term rentals because there is so much involved in that management that ingoing, the outgoing, the clean, that you know isn't there.
Speaker 1:There's an enormous amount involved and you know, anything that's a short considered STRAs, I think, short-term rental accommodation they're covered by different laws. So we don't do short-term rentals lower than three months because they're not covered by the residential tenancies act. So, um, all those rules that apply to a normal tenancy don't apply if it's a three month or less um lease agreement, so we don't do those. Our lease agreements are typically six months, um, but yeah, the wear and tear, definitely the bond money, things like that, um with an airbnb is is tricky waters when, when you're a managing agent trying to, you know, mitigate loss for the owner if the tenants have a bad guest, for example, staying, you know, and we also have those tenants that say, oh, it's not Airbnb, they're friends of ours, they've come from overseas, they're staying.
Speaker 1:That sort of deceit can really easily come undone and it will, especially in this um strong, strong, tight market. Your best being um forthcoming with your agent, with your owner, and saying, look, I'm going to europe for six months or three months, is there anywhere I could airbnb for a couple of months? And just ask the question. You'll be surprised. Some owners might be okay, some buildings might be okay. I know that some unit blocks dy beachfront manly. They're used to airbnb. They've got no reception, so you'd be foolish to risk your lease agreement. Um, do it, excuse me in the wrong way so yes, okay.
Speaker 2:So question um, because I know that there's new termination or you know you can't terminate a tenant. There's new termination laws that have come out. So I'm a tenant, I am. I've decided that I'm going to Airbnb. I didn't tell anyone. What does the termination look like?
Speaker 1:look, it's a breach of the agreement. That hasn't changed through these new legislative um things. It was no grounds evictions that have changed, so giving no reason for a 90-day notice. The breaches of the agreements haven't really changed. If you're in breach, an agent can take you to ncat, supply evidence of the breach, as in breach of the bylaws, breach of the lease agreement, reasons why and your lease can be deemed, um, you know, frustrated they can. They can terminate you. Um. It's usually with breach notices it's the three strikes you're at. It's not the first breach, it's something you continue to do, but something like a breach of a bylaw. Once Strata have sent you a breach as well, that's official, that's coming from Strata. You take that to NCAT, you plead your case and you could be asked to vacate very easily.
Speaker 2:Unbelievable. All right, guys, that's a wrap. Hopefully that's helped some of you people out there. I know we get asked a lot about Airbnb. I know I certainly do. I know, cleo, you're a phenomenal property manager. I'm sure you get asked all the time and I know I certainly do. In sales, people are like can we Airbnb this, so refer the time and I know I certainly do. In sales, you know people like can we Airbnb this? So you know, refer to your bylaws, see what you can do, stick to the rules. Everyone's all over the Airbnb. You know there was a time years ago where you could just get away with absolutely everything to do with Airbnb and your property, but now it's become a real thing. You know it's a business for people and there is quite a lot of law and legislation around it. So make sure you're following the rules, guys, because chances are you probably are going to get found out and hopefully this has helped some people out there.
Speaker 1:And yeah, again, like Lisa said, just talk to us. We're happy to help guide you through if you can or you can't. And again, have a great day. You too Well, help um guide you through if you can or you can't. Air dnb, have a great day, um, you too well, it's not raining, it's nice today I know the sun's out.
Speaker 2:I said that to mark before I was like such a nice morning, what's different? Oh, the sun's out, thumbs out, see you lady in red.
Speaker 1:I love the red on you, thank you.
Speaker 2:Thanks so much I'll see you in the office bye.