While it seems tempting to make some additional money by letting your home as a holiday rental or a short-term rental, you should be aware of the differences between the two types of rentals and the issues around letting your home on a short-term basis.

Of major importance to realise is that when you rent a house as a holiday rental, you are not covered by the Residential Tenancies Act 1986 (RTA).

Holiday rentals

A holiday rental is typically arranged via a hosting site such as Airbnb, Bookabach, or any of a number of the other such hosting sites. You (or an agent if you prefer) set up the marketing via the hosting site

Most hosting sites will include booking terms and conditions, and payments are made in advance through a third party so you do not need to deal with money issues.

You must ensure that you state rules that you wish to have adhered to such as:

• the number of guests your rental can accommodate
• whether pets are permitted
• whether smoking is permitted
• any liability issues, e.g. if there is an accident on your property
• minimum/maximum length of stays.

You must also consider tax obligations, insurance and health and safety issues.

For information on your tax obligations, go to the IRD website: https://www.ird.govt.nz/sharing-economy/short-term-accommodation.

For more information on any of the other issues, go to the MBIE website: https://www.business.govt.nz/news/short-term-rentals-what-you-need-to-know/.

You should also check out local council rules on short-term accommodation as some councils require rental properties to be registered.

Note: As a landlord you cannot ask tenants to move out temporarily so you can make more money over the summer.

Short term rentals

When a fixed-term tenancy is 90 days or less, it is regarded as a short fixed-term tenancy and does not follow the same rules and requirements as a fixed-term tenancy of more than 90 days.

For a short fixed-term tenancy, both the landlord and tenant must agree in writing that a tenancy will not extend beyond 90 days. In addition the following will apply:

• the tenancy will not automatically become a periodic tenancy when the fixed-term ends
• the property is not constrained to market rents
• improvements made to the property do not mean the rent can be raised
• notice is not required to end the tenancy as this is covered in the written agreement.
  
  

Summary

Holiday rentals can be a good way to earn some extra money from your property but only in a limited number of situations. In addition, they are expected to be fully furnished and supplied, including all kitchen items, bedding, towels and so on.

Short, fixed-term tenancies provide a good rental solution where a short duration tenancy is required and suits both parties. A short, fixed-term tenancy does not need to be fully furnished, but furnishing may make the property easier to rent.