As recent legislative changes in NSW continue to shift the landscape of residential tenancy agreements, property owners are increasingly turning to short-term rentals and licence-to-occupy models as a more profitable, flexible, and secure alternative. Here’s why:
1. Avoid Complex Residential Tenancy Laws
NSW tenancy laws under the Residential Tenancies Act 2010 heavily favour tenant rights.
Recent amendments make it harder to terminate leases, recover possession, or enforce stricter standards.
By using a Licence to Occupy under short-term/flexible rental models, owners avoid being bound by these tenancy laws, granting them significantly more control and agility.
2. Higher Earning Potential
Short-term rentals consistently outperform long-term leases in high-demand locations.
With dynamic pricing and seasonal demand (e.g. holidays, events), owners can generate up to 2–3x more income annually compared to a fixed rent.
Nightly rates are adjusted based on occupancy trends, not locked into 12-month lease constraints.
3. Flexibility for Owner Use
Want to stay at your property occasionally or block dates for friends/family? No problem.
Short-term letting allows owner use at any time, unlike long-term rentals where the property is locked into an agreement.
This is especially ideal for second homes, lifestyle properties, or those planning a future sale.
4. Better Property Maintenance & Oversight
Short-term properties are professionally cleaned and inspected weekly.
Maintenance issues are caught and resolved fast—rather than accumulating over years in a fixed tenancy.
Your home is actively cared for like a hotel-standard asset, not left to deteriorate.
5. Quality Control Over Guests
You can vet guests before accepting bookings. Unlike long-term leases, there’s no “one-and-done” commitment.
Problematic guests can be declined or removed swiftly.
Licence-to-occupy agreements give owners the legal right to terminate occupation immediately if house rules are violated—without going through tribunal proceedings.
6. Reduced Legal Risk & Tribunal Exposure
Long-term leases often lead to lengthy NCAT disputes over:
- Rent arrears
- Damage claims
- Eviction delays
Flexible letting avoids these risks entirely. Guests are licensees, not tenants, so NCAT tenancy jurisdiction doesn’t apply.
7. Insurance Advantages
Specialist STR insurance providers offer more comprehensive cover for guest-related damage, loss of income, and liability—unavailable under traditional landlord insurance.
Policies are structured around high-turnover occupancy, recognising the unique nature of short stays.
8. Market Responsiveness & Data-Driven Strategy
Use real-time data to adjust pricing, availability, and minimum stays to match market demand.
Unlike fixed-term rents, STR owners can pivot strategies instantly in response to travel trends, economic shifts, or personal needs.
Downsides of Long-Term Tenancy in 2025
- Harder to evict: No-grounds evictions are being removed or limited.
- Rent controls: More restrictions around rent increases and justifications.
- Repair obligations: Increased compliance standards and liabilities.
- Higher tribunal volume: Owners often face drawn-out legal battles over seemingly minor issues.
It is your time to decide: L’Abode vs local short-term-rental managers: which is better for your property?
Summary
Short-term rentals and licence-to-occupy models offer owners more income, more freedom, and fewer legal headaches.
In an increasingly tenant-friendly regulatory environment, flexible letting provides a way to protect your asset, optimise your returns, and retain control over your property.