Thanks to Madison Blancaflor and BankRate.com for this guest post.
The number of short-term rentals hosted by people 60 years and older has grown by nearly 1,100 percent over the past year. In fact, the United States tops Airbnb’s list of countries with the most hosts in that age group.
Retiring (and aging as a whole) is sometimes associated with loneliness and withdrawal from social activities, but statistics prove that is far from the truth. Retirees actually comprise more than 50% of senior hosts on Airbnb.
There are some great benefits to hosting while in retirement. In 2017, Airbnb senior hosts around the world earned over $2 billion, hosted over 13.5 million guest arrivals at their listings, and welcomed travelers from over 150 countries.
Hosts can choose to rent out their entire home or individual guest rooms. This makes hosting a great option for retirees – whether you’re looking to meet new people, rent out a vacation home that goes unused most of the year or make some extra cash while you’re having your own adventures.
Age is just a number
Retirement is one of the best times to take advantage of short-term rental opportunities. Seniors claim the number one reason they host is for financial gain. Other reasons include staying socially connected, meeting new people and keeping active. Airbnb even explains that many senior hosts “now say that the social benefits have contributed to a renewed sense of purpose.”
The benefits of hosting are immeasurable, but how do you get started?
How to become a short-term rental host
Signing up is relatively simple. All you have to do is go through the online listing process on a site like Airbnb, VRBO, Flip Key, or Sabbatical Homes. You’ll answer questions about your home and why guests would like it, choose your availability, set house rules, list your rent prices and more.
The process is easy to navigate, and most sites offer a dedicated support team to help answer any questions, 24/7.
How much can you earn?
The price of a rental is 100% up to you. Airbnb and VRBO have pricing tools that help first-time hosts determine the average listing prices of rentals similar to theirs. Furthermore, most services work on a commission-based system, meaning there is no up-front cost to setting up an account and listing your home on their sites.
What you will be expected to do
Most short-term rental listing sites have expectations for hosts, though these expectations are mainly just common courtesy requests.
- Respond to questions or reservation requests within 24 hours
- Provide accurate details in your listing
- Try not to cancel guest reservations without a good reason
- Treat your guests staying with with respect.
- Provide basic amenities, including toilet paper, soap, linens, sheets, towels and pillows
- Perform basic cleaning services (e.g., replace linens and clear out trash) between guests
If you are unable to provide cleaning services yourself, you can always add a cleaning fee to your listing price that covers the cost of a professional cleaning service.
What to consider when hosting a short-term rental
While it doesn’t cost anything to list a property, there are some associated costs with getting your rental guest-ready.
Security and safety
While reputable short-term rental sites hold their users to a high standard of behavior, you should still lock away important documents and expensive items. It’s also a good idea to install a lockbox installed for safe and easy check-in.
Homeowners’ Association (HOA) requirements
If your place has an HOA agreement, there might be specific rules on minimum or maximum stay requirements, parking, number of guests allowed, and more. There is also a possibility that you will be prohibited from renting out your home, condo or apartment. HOAs are only permitted to have a certain number of units rented within a certain development. Always check with your HOA before you list a home on Airbnb.
If you are unable to rent out your home because of an HOA restriction, Airbnb offers another option for hosting: You can sign up to host an Experience, which is where locals can host activities to help travelers make the most of their trips.
As discussed above, one of the host expectations of all reputable home sharing services is cleaning between stays. If you’re able to clean yourself, this will be a relatively low cost to consider. But if you can’t provide these services yourself, you’ll need to make arrangements with a third-party cleaning or maid service. Most guests are more than willing to pay a little extra if it means the space they’re renting is sparkling clean.
Tax implications for short-term rental hosts
Renting income is considered part of your yearly income in the eyes of the IRS. Depending on the short-term rental service you use to rent out your home, you might receive a Form 1099-K (Payment Card and Third Party Network Transactions) or an Earnings Summary that reports the gross amount of rent earned during the calendar year. You’ll need to include this in your 1040 tax form at the end of each year. For some renters, there are other tax implications to consider. H&R Block has a 2018 guide on how to report short-term rental income on your taxes.
Social Security implications for retiree hosts
If you aren’t performing any work on the property, or if you use a third-party service to clean and make repairs, you can report your home share income to the IRS as passive income on the Schedule E (Form 1040), Supplemental Income and Loss. Passive income isn’t included by Social Security to determine benefits.
However, if you are personally performing upkeep work on your property, your income is classified as self-employment. Self-employment income over certain thresholds can prevent you from qualifying for Social Security benefits.
Other tips for short-term rental hosting
The happier renters are with their stay, the more likely they are to leave a positive review. The more positive reviews your property earns, the more travelers will justify paying a higher fee to stay at your property. That means you can maximize your potential earnings by helping your renters have the best possible stay.
Here are a few easy ways to take your rental over the top:
- Post great photos of your listing. A picture is worth a thousand words, and great photos of your home can be the difference between someone booking your rental or passing it over for someone else’s. Most smartphones can take great photos, but you can research tips on how to make your phone photos shine.
- Give guests a welcome basket. Greeting guests with a seasonal basket filled with local goodies and tips for enjoying their stay can go a long way in helping them feel welcomed.
- Cook a dinner for your guests. If you are renting out a portion of your home instead of the entire place, offer to cook dinner for your renters one night. They’ll feel more welcome, and it’s a great way to get to know the people staying with you.
- Provide at-home entertainment. Most travelers won’t spend every second of every day out and about. Leaving some of your favorite books, games or movies out for guests can help them unwind after a long day of exploring. You can also leave a scrapbook of your favorite adventures, which can help renters get to know their hosts.
How to protect yourself while hosting
While the vast majority of the guests you’ll host will be absolutely amazing, you need to prepare for the possibility of having some not-so-fantastic renters. Some reputable short-term rental services offer host protection, such as liability insurance, but there are other steps you can take to ensure your personal and financial safety as a host.
- Set house rules. Be upfront with guests about what they can and cannot do while they stay at your rental.
- Keep important documents locked away. If you don’t want guests to see certain documents or have access to certain things, it’s best to keep them locked away, or remove them from the home altogether.
- Hold or forward your mail. If you’re going to be away while guests stay at your place, you might want to hold or forward your mail so that any important, private documents don’t fall into the wrong hands.
- Choose your guests wisely. Set up your listing account so you can accept and decline each reservation. That way you can screen potential guests before they officially book your listing.
A version of this post originally appeared on BankRate.com.
Are you a retiree or about to become one? What other questions do you have about hosting short-term rentals? Ask them in the Comments or on our Facebook page, and we’ll do our best to answer!