An advertised nightly rate tells you only part of the story. To assess holiday letting, consider the nights available, the bookings actually achieved and the full cost of preparing and operating the home.

Start with realistic availability

Owner use, maintenance and preparation can reduce the nights available to guests. Rates and demand can change through the year. Ask what an estimate assumes about availability, booked nights and nightly rates, and what happens if demand is lower than expected.

Allow for setup and ongoing expenses

• Setup: furniture, linen, photography, repairs, safety work and any required professional advice or approvals.
  
  
• Booking and management: management charges, channel or payment charges and any agreed administration costs.
  
  
• Guest turnovers: cleaning, laundry, consumables and waste arrangements.
  
  
• Property operation: utilities, internet, insurance, pool or garden care and maintenance.
  
  
• Longer-term ownership: replacements, rates, body corporate costs where applicable, finance costs and tax advice.

Check which costs are charged to guests, which are paid by you, and which are already included elsewhere. Avoid counting the same charge twice or assuming a guest cleaning fee will cover every cleaning cost.

Compare like with like

Separate gross accommodation revenue from the amount remaining after expenses. Ask for the calculation and the period it covers. When comparing holiday letting with another use of the property, use the same timeframe and include the costs relevant to each option.

Keep clear records

Record booking income, fees, invoices, refunds, maintenance and the dates used by you or your family. The ATO requires rental income to be declared. Personal use can affect deductions, and using your home to earn income may affect capital gains tax treatment. Ask your accountant how this applies to you.

Questions for your assessment

☐ What availability and rates do the estimate assume?

☐ Which fees and costs are included, and which are additional?

☐ What would a quieter period mean for the outcome?

☐ What setup and replacement budget should I allow?

☐ How will statements and supporting records be supplied?

Talk through your property with us

Contact Fulton and Co Property to discuss your home, your plans and whether holiday letting could suit your circumstances.