Offering your own home or apartment to vacationers can earn you cash—$100 to $150 a night on average, according to Airbnb, much more in some popular destinations….That can be fairly easy money. Unless something goes wrong, in which case it can be a disaster.
Like many other homeowners these days, you might be thinking about making some extra money by renting out your home to short-term tenants while you’re away. It’s easy, right? Just put up a listing on AirBnB, VRBO, Craigslist, or another listing site and watch the $$ flow in? If only it were that easy. We’ve done short-term rentals for years, and I can say truthfully that renting out your home can be very rewarding, financially and in other ways – but easy it is not. There’s a lot you need to know and do before you can safely and successfully rent out your own residence or a second home on a short-term basis.
Are you allowed to do it?
If your HOA, co-op, landlord, or local government prohibits short-term rentals, you can stop right here. There can be costly consequences to ignoring those prohibitions. Many local governments have enacted laws and ordinances regulating rentals of less than 30 days and/or limiting the number of days you can rent out your home during a single year, and in some localities, those regulations are being aggressively enforced. If you’re a tenant and violate the terms of your lease, you risk getting kicked out of your home. Belong to an HOA? Many have rules against short-term rentals, and ignoring them could lead to fines and possibly a lawsuit.
Do you really want to do it?
Just about everyone wants extra cash. But not everyone is comfortable with the idea of strangers sleeping in their beds, using their showers, and poking around in their kitchen. Be honest with yourself. Be honest with yourself: does the thought of strangers living in your home make you shudder? If so, think of another way to earn extra cash.
Will your homeowner’s insurance remain in effect?
The explosion in the short-term rental market has insurers scrambling to figure out how to respond. But insurers are slow to change, and your homeowner’s insurance company may not pay the claim if if a broken pipe floods the house or a guest slips on the stairs while your home is rented to short-term tenants.
Are you willing to do the work?
Doing a short-term rental takes more than slapping a few photos and a brief description on a listing site. Preparing that listing takes time. Responding to inquires takes time. Getting your home ready for guests and making sure everything will be taken care of while you’re away takes time. Where will you find that time? Be honest with yourself: If you already feel as if there are not enough hours in the day, cramming in the tasks associated with short-term rentals will only add to your stress.
Do you have a good “people-meter”?
How good are you at sizing up people? Making sure that your guests are the sort of people who will care for your home and respect your neighbors takes some attention: you need to listen carefully, ask questions, and listen some more. You can usually spot potential problems by paying attention to what people tell you, or don’t tell you; how they respond, or don’t respond, to your questions; and what questions they ask, or do not ask you.
Are you still not sure whether you want to rent out your home? What do you need to know to decide?