It would be great to have that extra income, right?
These alternatives to hotels can be wonderful. I have enjoyed staying in a few of these rentals myself.
Before you do rent out your home to complete strangers and their guests, please consider the following:
- The shorter the term of the rental period, the more risk there will be.
- City laws can change, and they have been changing to address short-term rental properties. Short-term rentals may be legal one month and illegal the next month.
- Strangers can potentially damage your property.
- Strangers can create animosity with your neighbors – late-night partying, loud music, not adhering to homeowner’s association restrictions.
- You need to account for extra costs, insurance, higher utilities, maintenance, cleaning, etc.
My best recommendation for an overall better experience with short-term rentals is to hire a professional management company to oversee the property and the tenant screening process.
Most homeowner’s policies do not cover these short-term rentals as they are considered a business. You will need to purchase specialized insurance for these homes that will cover both property and liability exposures. Each insurance policy will have different coverages, conditions, limitations and exclusions.
Before you do anything, be sure that you have a solid foundation in place to have a successful rental business. A licensed insurance agent can help with managing the risk and providing a policy to cover your exposures. A conversation with a FirstMark Agent is a very good place to start.