AirBNB, HomeAway, VRBO, and other similar websites are becoming very popular with vacation renters. If you have an investment property and are thinking about short term rentals, there are a few things that you should know before hand. Here are a few key considerations.
Find Out If Short Term Rentals Are Permitted in Your Complex
If your investment property is within a condo complex or subdivision, there may be restrictions on this type of rental. Check with your condo rules or subdivision by-laws. Look specifically at anything relating to renting.
Check Local Laws
Some cities and towns have laws that specifically prohibit short-term rentals. Don’t assume that it’s allowed simply because you see other rentals in your community on those websites. People have been known to post such rental listings even when they are prohibited. Check the laws first to protect your rights and avoid hefty fines.
Another consideration is the tenancy law in your state. For example, some states may consider anyone renting for 30 days or more as a tenant-at-will. Renters have certain rights at this point and you must follow specific protocol for damage disputes and other issues. Typically, it’s better to avoid a short-term renter becoming an actual tenant under the law.
Purchase Additional Insurance
Your regular home insurance may not offer sufficient coverage for a rental situation. Contact your insurance agent to find out about your options for additional coverage. Be sure to mention that you are using the property for short term rental. Mention any furnishings at the property and ensure that it is covered as well.
Screen Your Tenants
Most home share websites have an approval process where you can review rental requests before accepting reservations. Be sure to ask for information about the renters such as the reason for their trip and who is included in their group. There have been situations where people rent homes for parties. This can create problems with neighbors and result in quite a mess upon their departure. A good screening process can help you avoid these situations.
Understand the Rules of the Websites You Are Using
Most home share websites charge a fee for any rentals secured through their site. They also offer certain levels of protection, such as insurance for additional damages that may be caused by renters. For your own interest, be aware of what they specifically cover and what the rules are. For example, if someone rents your property for a week through the website but then makes arrangements directly through you to extend their stay, the coverage by the home share website may not include that additional stay.
Benefiting from Home Share Websites
Home share websites can be a great source of income for your short term vacation rental property. It is important that you do your research before buying a property specifically for this purpose and before posting your property on these websites. By doing so, you can make the most of your investment property while minimizing your risk.
Suzanne Plewes is a Broker Associate at RE/MAX Alliance in Loveland. If you have questions regarding real estate, please write to 750 W. Eisenhower Blvd., Loveland, CO 80537, call 970.290.0373 or email [email protected].