Chregan O'Flynn, director and co-founder of short-term rental management company Propr, says that faced with the challenges that these rentals can bring, some body corporates have taken the decision to ban them.
“This can be problematic. Not only can this decision lead to a decline in property values in those estates, but in recent months some of these bans have actually been overturned by the courts. This changing environment has prompted body corporates to look for ways of managing short-term rentals in their buildings which can be a daunting task in the absence of clear solutions.”
Challenges they are faced with include noise complaints, security issues, and lack of accountability, he explains.
“What inevitably happens in a scheme with over 30 apartments is that there are multiple short-term rental operators working in the building, each managing the units with varying degrees of effectiveness. When guests don’t abide by estate rules or pre-agreed terms and conditions, it is often the neighbours who suffer the consequences as some short-term rental management companies don’t have an effective mechanism to hold guests accountable.
“In severe cases, the net effect of these problems can result in loss of reputation for the building, a drop in property values and the inability of other inhabitants to live in peace and safety.”
According to O’Flynn, however, there are ways to alleviate these challenges.
“There are solutions in place to unlock the benefits of short-term rentals for operators, hosts and even the estates themselves in maintaining occupancy of the premises and increasing property values.”
To assist short-term rental hosts as well as to appease security estate trustees and developers, he lists four solutions for them to consider:
O'Flynn says that it is worth exploring solutions before knee-jerking into prohibition.
“While the trustees' concerns of the potential downsides are legitimate, they need to weigh their decision very carefully and be aware that an outright ban can affect the property values of everyone in the complex.”
He adds that when managed well, short-term rentals can provide owners with greater income, flexible personal use and a wider market into which they can sell their property.
“Moreover, in the right hands, short-term rentals are also continuously maintained and in a sellable condition, which cannot be said about long-term rentals which often degrade over the course of a multi-year lease.”
“If the above measures and tools are put in place, it will mean that trustees will no longer have to worry about the challenges associated with short-term rentals, resulting in a win-win outcome for all,” concludes O'Flynn.