Okay, you say, “Let’s go!” Not so fast. There are great benefits to renting or exchanging your home, but there are also lots of challenges. Your next question needs to be, “Is it right for me?”
Rentals and even exchanges are subject to certain limitations, restrictions, regulations, and laws. Not all insurance policies provide coverage when strangers stay in your home. Rentals raise tax-related issues. It takes time to do it right, something few of us have a lot of these days. You need to be pretty comfortable with uncertainty and risk. Finally, you have to feel okay with the idea of other people living in your personal space.
How would you answer these questions?
“Am I allowed to exchange or rent out my home?”
Depending on where you live and whether you own your own place, there may be limits, restrictions, or even prohibitions on your ability to rent, or even to exchange, your home. To avoid messy, unpleasant, and perhaps costly problems, think about the following:
- Do you belong to an HOA or a co-op? The rules may prohibit or restrict your ability to let people stay in your home while you’re away. We ran into that with one apartment we tried to rent in New York’s Chelsea district. After an owner rented her place one summer to some students who promptly moved in all their friends, “No more sublets!” the board decreed. They relented only after we’d submitted lots of personal information and met with several board members by phone.
- Do you live in a big city? Many cities, including New York and San Francisco, have recently enacted or are considering laws that tax or prohibit rentals of 30 days or less.
- Do you live in a seniors-only community? You won’t be able to accept families.
- Are you a tenant? Read your lease to see whether you are allowed to have people stay in your place while you’re not there. Even if you don’t see language related to subletting or overnight guests, it’s a good idea to get an okay from your landlord. The money you’d save by exchanging or renting out your place is not worth getting kicked out.
“Do I have the time?“
A successful exchange or rental takes time, effort, and attention to detail, especially when you’re just starting out. Rushing the process inevitably leads to trouble. We’ve been doing it for so long that we’ve developed a routine, but it still takes lots of work to do everything right. If you’re so busy you barely have enough time to decide what to pack, this process may not be for you.
“How comfortable am I with uncertainty and risk?”
Things happen: exchange partners fall ill at the last minute or the perfect tenants turn out to be not so perfect after all; your refrigerator dies the day your guests move; the exchange home is funkier than you’d been led to expect. You need patience and some tolerance for risk.
“How do I feel about strangers living in my home?”
I’d love to do what you do,” my friend Sonia said wistfully. “But strangers sleeping in my bed? Yuck!” Exchanging or renting out her home isn’t right for Sonia. The anxiety and discomfort wouldn’t be worth the benefits.
Think carefully about how do you feel at the thought of strangers inhabiting your personal space, sleeping in your bed, and using your shower? Do you worry that guests might move things around, spill wine on your new white sofa, or go through your drawers? If you have qualms, renting out or exchanging your home may not be right for you.
So…can you answer all these questions without serious concerns or a creeping sense of dread? Then it’s time to get started.