Airbnb arbitrage and rent-to-rent: what owners should know before saying yes

1. How arbitrage works

The operator signs a normal residential lease, furnishes the property, and lists it on Airbnb, Booking.com and similar sites. They pay you a fixed rent and keep the difference between that rent and what guests pay. To win the lease, operators often offer rent above market, a longer lease, or a "corporate lease".

Some arbitrage guides coach operators not to mention Airbnb at all and to pitch a "corporate lease" instead. If someone offers above-market rent for a furnished-style corporate lease, ask directly whether the property will be listed for short stays.

2. The consent rules

Queensland: under the Residential Tenancies and Rooming Accommodation Act 2008, a tenant may sublet only if the lessor agrees in writing, or under a tribunal order. A lessor must not unreasonably refuse a request to sublet, so if you are asked, respond in writing with your reasons.

NSW: a tenant must not sublet without the landlord's written consent. Handing the whole property to short-term guests without consent is likely to be treated as an unauthorised sublet. Every NSW short-term rental must also be on the STRA Register, and a tenant registering a property has to upload confirmation of the owner's consent.

If a tenant lists your property without permission, that is generally a breach of the tenancy agreement, and you may have remedies through the tribunal. Get advice before acting.

3. Insurance: the biggest gap

Most landlord insurance is written for long-term tenancies, and most insurers treat short-term letting as a different, higher-risk use. If your tenant is running a short-stay business in your property, your policy may not respond to damage or injury claims arising from it. Tell your insurer about any short-stay use, and require the operator to hold short-stay public liability and contents cover, with you noted. See our short-stay insurance guide.

4. Strata, council and tax still land with you

• Strata: by-law complaints about guests (noise, parking, pools, rubbish) usually come to you as the lot owner. In NSW, many buildings can ban non-hosted short stays entirely.
• Council: in Brisbane, a home let for short stays moves into the higher transitory accommodation rates category, which you are charged. Houses in low-density zones may also need development approval. See our Brisbane and Sydney rules guides.
• Tax: you are taxed on the rent you receive. The operator is taxed on their short-stay income.

5. The other risks

• Wear and tear: hundreds of guests a year cause far more wear than one household, and a standard bond covers little of it.
• The operator's business can fail. They carry the full rent whether or not guests book. Even large, well-funded operators overseas have collapsed. If rent stops, you go through the tenancy breach process while guests may still be booked into your property.
• No licence protections. Because the operator leases the property as a tenant, they usually don't need a real estate licence. That also means none of the protections that come with one, such as trust accounting and, in Queensland, the Claims Fund.
• The upside goes to them. If the property earns well on short stays, the operator keeps the difference. You get fixed rent.

6. Arbitrage vs licensed management

	Rent-to-rent / arbitrage	Licensed short-stay management
Your income	Fixed rent, sometimes above market	The actual booking income, less fees
Who keeps the upside	The operator	You
Control of the property	The operator, for the length of the lease	You, with your manager working for you
Your own use	Not during the lease	Block dates when you want
Licence and trust account	Usually not required, because the operator is a tenant	Required: licensed agent, audited trust account or direct payment to you
If things go wrong	Tenancy breach process while guests may still be booked	End the agreement on notice. The listing and bookings stay with your property.

Arbitrage suits owners who only want a fixed rent and are comfortable with the risks above, with the right protections in writing. If you are interested in short-stay income, licensed management usually gives you more of it and keeps you in control.

If you do go ahead: a checklist

1. Written consent that specifically allows short-term letting, with conditions.
2. The operator's company name, ABN, track record and references from other owners.
3. Short-stay public liability and contents insurance held by the operator, with you noted as an interested party. Also confirm with your own insurer that your building or landlord policy still applies.
4. Strata or body corporate by-laws checked. In NSW, confirm the building doesn't ban non-hosted short stays.
5. Council rules checked: zoning and approval for the property, and in Brisbane the higher transitory rates category, which you as the owner are charged.
6. In NSW, STRA registration in place. A tenant registering a property has to upload the owner's consent.
7. A clear limit on guest numbers, no parties or events, and noise monitoring.
8. Inspection rights, cleaning standards and a maintenance responsibility split in writing.
9. What happens at the end: handover condition, furniture removal, and what happens to future bookings.
10. Advice from a lawyer or licensed property manager on the lease before you sign.

Questions to ask the operator

• Will the property be listed on Airbnb or other short-stay sites? On which ones?
• How many properties do you run, for how long, and can I speak to two owners?
• What insurance do you hold, and can I see the certificate?
• Who handles guest complaints, strata notices and council issues?
• How do you screen guests and stop parties?
• What happens to bookings and furniture if the lease ends early?

Common questions

Is Airbnb arbitrage legal in Australia?

It can be, if the owner gives written consent and the property complies with strata by-laws, council planning rules and, in NSW, STRA registration. Without the owner's written consent, a tenant listing the property for short stays is generally an unauthorised sublet.

Can my tenant put my property on Airbnb?

Not without your written consent. In Queensland, a tenant may sublet only with the lessor's written agreement or a tribunal order, and a lessor must not unreasonably refuse. In NSW, a tenant must not sublet without the landlord's written consent.

What is rent-to-rent?

Rent-to-rent is when an operator leases a property from the owner on a standard lease and then sublets it, often as short-term or serviced accommodation, keeping the difference between the rent they pay and what guests pay. It is another name for rental arbitrage.

Does landlord insurance cover a tenant running an Airbnb?

Often not. Most landlord policies are written for long-term tenancies, and insurers generally treat short-term letting as a different, higher-risk use. Tell your insurer and check your policy before agreeing to any short-stay use.

Is guaranteed rent better than short-stay management?

Guaranteed rent gives a fixed income but hands the upside and control to the operator, and the guarantee is only as good as the operator's business. Licensed management gives you the actual booking income less fees, keeps you in control, and comes with licensing protections.

Related: How to choose an Airbnb manager · Short-stay insurance · Airbnb vs long-term rent. General information only, not legal advice. Get advice on any lease before you sign.

Last checked: 9 November 2026. This page is general information, not legal or tax advice. Rules change, so confirm the details for your own property with the council, your body corporate or strata manager, and your accountant.