Even as technology allows the world to become cheaper and easier to explore, traveling is still expensive. Increasingly, short term rentals through sites like VRBO, Airbnb and the like have become popular for vacationers and business travelers alike. You already pay for your housing costs, so why not offset your mortgage with some rental income during the times when you are not home? Turning your personal dwelling into a short term rental might be a good idea for you, but first you must weigh the pros and cons. Here are five things to keep in mind when exploring this option.
Is it legal for you to rent out your home?
If you are currently a renter in your dwelling, get out your lease and take a close look. Many leases do not allow subleasing. If your home is part of an HOA, there may also be restrictions against renting your home, or against short term rentals. Even some counties and municipalities have begun restricting the practice. Don’t forget to check your homeowners insurance, as many policies do not cover damage caused by short term tenants.
Are you able to leave the house during the peak season?
The key to making money in the short term market is renting your house during peak season for your area. If you can only make your home available during the off-season, you may find it hard to fill your house with the desired clientele at your target price. In order to maximize your profits, you need to rent out when there is low supply and high demand. Does your small town host an event that brings throngs of people to the area during a particular holiday, weekend, or time of year? If so, that could be the perfect time for you to get out of town and make some money.
Are you willing to let strangers use your items?
People looking for short term rentals have an expectation of a fully furnished home, including furniture, supplies, and a full complement of household items. You must be prepared for everyday wear and tear as well as damage from accidents, spills, and other mishaps. Your furniture and appliances may experience scratches, dents, and stains. You must be willing to have complete strangers live in your house as if it were their own, and use your things. For your irreplaceable items, think about where you might store them for safekeeping in your absence. Do you have a storage area in the home, or can you put a lock on a closet?
Are you able to take your pets with you?
What about your pets? If you are accustomed to hiring a sitter to watch your pet in your home, can you make arrangements to board him or take her with you?
Are your plans fixed?
Your short term renter is your customer. They will be relying upon your place to be their home away from home. While you may be leaving the area, you should be sure to have a proxy in place in case of emergency. Also, consider cancellation policies carefully. If your tenant cancels, what will the penalties be? And what are the penalties if you have had to rent a place to stay and must cancel in turn?
Renting out your primary residence while you are vacationing, traveling for business, or during a big event is a great way to earn some extra cash. The best way to avoid unwanted surprises is preparation and research. If it works for you, you can turn your vacant home into extra mortgage payments.