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Airbnb: What you need to know before renting your home to a stranger this summer

ABC News logo ABC News 7/11/2016 Kelly Stratton
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Short-term accommodation websites have been around for years and are a popular alternative to hotels for many travellers.

Now, as the temperature increases, so does the number of people flocking to Airbnb to rent out their homes for the summer.

But what are the hidden risks and technicalities involved in handing over the keys to your place to a stranger?

Firstly, what is Airbnb?

Founded in 2008 in San Francisco, Airbnb is the world's largest accommodation sharing website with over two million property listings in 191 countries.

Hosts can list their room or property on the website and name their price, and travellers can then look through the available listings and choose where they want to stay.

Airbnb takes a small commission if someone rents your property.

Is Airbnb popular in Australia?

Australia is a key market, according to Sam McDonagh, Airbnb's Australia country manager.

"There are now more than 83,000 listings in Australia and nearly 70 per cent of Australians are aware of Airbnb," he said.

"The thing we continue to hear from our hosts and guests is that people want to live like a local.

"When Airbnb guests stay in Australia with hosts they stay 2.1 times longer and spend 1.8 times more than the average tourist."

Why are people so concerned?

There's still a lot of conflicting information about the legal short-term accommodation websites are and what risks are involved.

On 19 October, a NSW parliamentary enquiry tried to clear up some of the confusion and recommended that state legislation be amended to allow homeowners to use online booking services.

Time will tell whether that suggestion will be taken on board, while other states and councils around the country are still scrambling to review their own rules.

But I thought it was legal...

Rules on short-term rentals differ from council to council.

Trevor Atherton, a lawyer and board member of the Holiday Rental Industry Association, has dealt with thousands of cases where councils have cracked down on short-term accommodation arrangements.

"If your guests are noisy or unruly and neighbours complain to the council," he said.

"The council then reviews their bylaws to work out whether or not it thinks it is legal.

"If it's not, then they can do whatever they want under planning legislation, including issuing hefty fines on the homeowner."

In July last year, the Victorian Supreme Court ruled that an owners corporation cannot restrict other landowners from putting their properties on short-term accommodation websites.

While this may be the case in Victoria, the legislation is still being tested in other states.

What if it's my guests who are in the wrong?

When renting your property to someone you are entering a contract, and you as the host can impose terms and conditions that the guest must adhere to during their stay.

This can include guests having good behaviour, paying a bond/security deposit and being responsible for any damage they cause.

Even though Airbnb also provides Host Protection Insurance and a one million dollar Host Guarantee, you should still make sure you have your own insurance.

"But so long as the legality of this activity is uncertain, so is your insurance policy," Mr Atherton said.

How is the tax office involved?

Any profit you make is considered assessable income and must be declared in your tax return.

If it's the other way around, you can claim the loss as a tax deduction and claim things like council rates, water rates, and all other running costs you would associate with a normal investment property.

Emma Seymour-Munn is a senior accountant and said there is a lot of maths involved when renting out your property on Airbnb.

She recommends all hosts keep a record of their guests, how long they stayed, and if they haven't rented the whole property how much space did they have access to.

This will make everyone's life easier when it comes to tax time or where a capital gains event is triggered.

What do guests expect?

Guests hold hosts and their property to a high standard and expect a home that's set up like a five-star hotel.

This includes freshly pressed sheets, cleaned carpets, for everything to be polished, quality bathroom products, and the absence of all the host's personal items.

Founder of HomeHost, Gabriel Sarajinsky, helps hosts manage their property.

He says to turn a profit "you need great photos, good reviews, an impeccable home" and be willing to put in a lot of hard work.

Still keen? Here are the five things you need to remember

  1. Check your local council's rules and regulations
  2. If you're a renter, check the conditions of your lease
  3. Do the math - make sure you won't be turning a loss
  4. Set out clear terms and conditions and make sure you have a valid insurance policy
  5. Keep a detailed record of all your guests and the space used

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