Can You Start a Holiday Rental Without Owning Property?

Can you rent out a rental property in Australia? If this question has been running through your mind lately, the simple answer is yes. In fact, creative entrepreneurs across Australia earn consistent income from short-term rentals (STRs) on different platforms without having to buy a house or apartment. 

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Australia’s growing travel market means property owners and STR entrepreneurs can share in the success of the booming industry. As you will notice throughout this guide, it is possible to start a short-term rental business without your own property. This is possible through rental arbitrage, co-hosting, property management, or master leasing.

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These approaches turn hosting into a short-term rental investment opportunity that does not require millions in capital. Keep reading to learn how to become a host without owning real estate.

Can you start a holiday rental without owning property?

Many Aussie hosts have proven that with the right strategy, you can truly start a holiday rental and gain profits as a non-owner owner. 

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Take Canberra-based Canbnb, for example — founded by Daniel White, it grew to manage over 140 listings without owning a single property. By partnering with landlords and using smart tools to streamline operations, they’ve shown just how doable (and profitable) this model can be with the right systems in place.

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The short-term rental business model in Australia is quite flexible. You might not hold the property deed, but with dedication and know-how, you can still run a thriving business and delight guests.

Best ways to start a holiday rental without property ownership

Below are four key strategies you can implement to start running a short-term rental business without owning a property.

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Rental Arbitrage: Profit from leasing and subletting

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What is rental arbitrage?

With this method, you rent a place from a landlord and rent out a property at a higher nightly rate to earn a profit. It is a clever strategy that lets you profit without owning a single square foot.

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How it works in Australia

To do rental arbitrage, you must secure a suitable lease. And to do that, it’s crucial to obtain explicit permission from the landlord before subletting a property, as standard lease agreements often prohibit subletting without consent. You will need to follow local council rules, for example, to ensure the area allows short-term rentals and to obtain any required permits. Once you have a lease and permissions, furnish the property and list it on platforms like Airbnb, Booking.com, etc.

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Pros:

• No huge mortgage or down payment.  
• You can start earning as soon as you list & get bookings. 
• You can lease multiple properties in different areas to expand your STR portfolio rapidly.
• It is a good way to test the market.

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Cons:

• You are locked into paying rent regardless of bookings.
• Convincing landlords to rent out their property can be challenging.
• If local laws change or neighbours complain, your subletting arrangement could be curtailed.

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Best markets

Rental arbitrage works best in high-demand & high-rent areas. Major Australian cities and tourist destinations like Sydney, Melbourne, Brisbane, and the Gold Coast are key targets.

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Co-hosting: Manage properties for owners

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What it is

In this scenario, you do not lease or own the home. Instead, you provide property management services on the owner’s behalf, and in return, you earn a share of the income (or a fee).

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How it works

Co-hosting arrangements can start informally (maybe you help a friend or family member with their listing) and grow into a professional gig. You will be responsible for tasks like communicating with guests, coordinating check-ins, arranging cleaning and maintenance, restocking supplies, and optimising the listing and pricing. Co-hosts typically earn a commission from the booking revenue - often around 10% to 20% (sometimes up to 25-30% for full management).

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Pros:

• No rent or mortgage.
• Earn while you learn.
• Flexible scale.
• Less legal risk.

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Cons:

• You only get a fraction of the rental income.
• Limited control since the property is not yours.
• Losing a client means losing that income stream.

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Property management: Run STRs for multiple owners

This is basically scaling up the co-hosting concept into a formal business. As a short-term rental property management company (even a one-person company), you handle full-service management of vacation rentals for owners. You might manage a dozen or more properties, providing end-to-end hosting services in exchange for a higher commission or management fee.

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How to get started

Often, people start by co-hosting one or two listings and building a track record of great reviews. From there, you can approach other property owners or even real estate investors and offer your expertise as a professional STR manager.

As a property manager, you would list properties on multiple channels to maximise exposure and revenue for owners. You must also coordinate all the logistics, such as dynamic pricing, guest screening, housekeeping, maintenance, and even handling emergencies with local support.  

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Pros:

• Higher earning potential
• No ownership risk
• You get to build a brand and expand the business
• Enjoy Multi-platform reach

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Cons:

• Running an STR management business is work-heavy.
• When starting out, the margins can be very thin.
• You must stay on top of local laws & regulations for all properties.

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Master leasing: Control properties with long-term agreements

Master leasing is like an advanced form of rental arbitrage. Instead of a standard 6-12 month lease, you negotiate a longer-term lease or exclusive use agreement for a property or even multiple units. This agreement gives you control of the property for the term.

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How it works

You find a property owner (often an investor or someone with a vacant property) and propose a long-term lease where you will operate the place as a holiday rental. Because you are offering a guaranteed long-term rent and relieving the owner of day-to-day hassle, many owners will consider it. Often, master leasing arrangements involve you paying for utilities and upkeep and sometimes performing improvements on the property.

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Pros:

• You enjoy better stability and control.
• It offers better terms.
• There is the option to scale the operation.
• Enjoy a stronger partnership with the owner.

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Cons:

• You are on the hook for rent for a long period.  
• You incur higher upfront costs.
• Negotiating a master lease can be legally complex.
• There is limited exit flexibility.

Tips for success as a non-property owner host

Even without owning a property, you can thrive as an STR host in Australia by being savvy and proactive. Below are some quick tips in key areas to help you succeed:

Be mindful of legal considerations in Australia

Regulations for short-term rentals vary by state and city. For example, New South Wales requires all STRA (short-term rental accommodation) properties to be registered and imposes an annual 180-night cap for non-hosted rentals in many areas. Always do your homework and make sure you comply with any planning, fire safety, or strata regulations before hosting.

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Handling guest issues

Since you are managing someone else’s property (or a rented one), you need to be extra diligent about guest satisfaction and property care. Be responsive to guest inquiries and issues as fast as possible; friendly communication can prevent small issues from becoming big problems.

You should also keep the property spotlessly clean and well-maintained. Set clear house rules to prevent misuse of the property and enforce them politely. Remember, your reputation as a host/manager is everything when you do not own the home - this is what will help you retain clients and attract new opportunities.

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Learn firsthand about pricing knowledge

Study the local market and seasonality in your area. The peak travel season in Australia is during summer (December to February) when demand and rates are highest. Likewise, major holidays like Christmas, New Year’s, Australia Day, Easter, and school breaks lead to a surge in bookings, so the pricing would be higher around this time.

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Here, you want to adjust your nightly rates to attract bookings. One dynamic pricing tool you should try is Beyond's free listing analysis tool. This software will help you gauge optimal rates and occupancy for your listing. It will further guide you in setting competitive prices based on real-time data.

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