The highs and the horrors of holiday letting

It’s that holiday time of year and whilst the promise of a high, short-term rental income is definitely something to get excited about, holiday letting is not without its risks.

A case reported by one of our clients paints the picture perfectly: a quaint seaside cottage in a remote village over-looking the Atlantic Ocean … having retired, the owners decided to rent their holiday haven out over the festive season for the high daily rental the season commands. 

The couple assumed that a family who paid the large deposit so quickly could also be trusted to take care of their home and promptly left their front door key with a neighbour.

To their horror they discovered long after the deposit was returned that a temporary tenant is not always a visitor who values your belongings! Missing artwork, water damage to their newly installed floors and a self-fashioned indoor braai completes the post-rental picture.

A furnished unit is an easily damaged unit

A lot of damage can be caused to a fully furnished unit within a short space of time and for this reason, the importance of thorough in-going and out-going inspections should never be underestimated.

Prior to a short-term tenant occupying the property, you must have documented exactly what items the property holds and the condition of those items. This will give you a baseline to compare to when conducting the out-going inspection.

If you then determine that damage has been caused by the short-term tenant, you have the necessary proof to hold the tenant responsible for that damage.

Don’t forget the house rules!

Another important aspect to implement is a comprehensive set of house rules. When on holiday, it is only natural that people loosen up and let their hair down. This can lead to a level of disruption that they would not ordinarily subject their own neighbours to.

Where the entire area is exclusively made up of holiday units or where the property is far enough away from neighbours, this can be acceptable. But all too often, the areas that people go on holiday in overlap with the areas people retire in. Noise complaints and a disturbance to permanent residents can mean body corporate fines for the landlord. 

A well-constructed and comprehensive set of house rules should be in place to limit these disturbances - the rules need to be referenced and attached to your holiday lease agreement.

While it can be a profitable time for short-term landlords, the ability to maximise on holiday rentals is cemented with a lease agreement that has specifically been drafted for holiday letting.

If you don’t have one yet, the TPN Holiday Lease forms part of the TPN Residential LeasePack.

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