Aloha! Going on vacation soon? Thinking about renting out your home while you travel the seven seas? Discover The Home Matters guide to renting out your home.
CleanupThe mere act of opening your home to traveling strangers is a wonderful show of hospitality in and of itself. However, the friendly hospitality shouldn't stop at the front door. Your guests are just that, guests. And they expect to be treated like such, even though they aren't staying at a traditional hotel. So, a great way to get into the renting spirit is to first create your very own cleaning checklist that you can refer to and work off of before each guest arrives or conversely you can always hire a housekeeping or cleaning service. If you want to tackle it yourself, here’s a small list to help you get started.
Protecting ValuablesRenting out your home to travelers is not only a huge responsibility; it’s also a large liability. Although we want to believe that the guests we invite into our homes will follow the golden rule and respect our space, the reality is that there’s still a chance you’ll have the occasional hiccup with an unruly guest. It’s one thing if they leave your place a mess, but another if they start snooping into your personal belongings. To help safeguard against such behavior, we suggest you prepare yourself by finding a place in your home to lock personal items like money, passports, and other important documents.
If you don’t already have a safe, we suggest investing in one and finding a good, secure place in your home to keep it. If you don’t feel comfortable keeping some of your more important personal belongings anywhere in your home while you have unfamiliar guests, consider renting an offsite storage unit or a lock-box at your local post office. You can also rent a temporary mailbox at your local post office – just remember to reroute your important mail to that address while you’re away.
Supplying Your GuestsLike while staying at a traditional hotel, your guests will most likely expect to have at least a few items readily available for them to use while staying in your home. It’s not a five star resort, but honestly, that’s not what your guests are looking for. They’re staying at someone else’s home, so what they expect more than resort style accommodations is for it to feel like home away from home. So, consider providing a few of the items listed below to help improve their experience:
• Access to the internet
• A list or guidebook of all the activities to do in the local area
• Board games or video games
• A selection of movies and a working TV
• A sufficient amount of food in the refrigerator or cabinet for them to snack on
LegalitiesOne mistake that many first-time home renters make is simply assuming that it’s as simple as plugging your address into a rental website and waiting for your first guests to arrive – if only that were so. However, it’s still not a very daunting task to get started. You just need to do a little homework on the legalities behind renting out your space first. Below are a few things to consider:
Every home rental website has some type of service fee. Airbnb charges a 3 percent fee to cover the cost of processing payments. While HomeAway will charge you a fee each time you list your home on the site. If you plan on renting out your space quite often, you can pay a flat annual fee of around $349 and slash the commission fee of each listing.
As we mentioned earlier, renting out your home is a liability. There is always the possibility of accommodating a nightmarish guest. So before diving headfirst into home rental, consult your insurance company to check what will be covered in the event of something going wrong. Some insurance companies may require you to purchase a business policy if you plan on renting out your home regularly. If you rent out your home for a majority of the year, then you may need to purchase a landlord or rental dwelling policy. Some home rental websites, like Airbnb, do offer insurance to U.S. hosts that would protect them if one of their guests becomes injured during their stay, or if a guest ends up damaging the home.
Do you need to report your home rental earnings as income? Well, if you rent out your home for 14 days or less, then no. If you rent your home for more than 14 days, then yes, the rent you accrue during this period must be included in your income. Either way, whether you rent for less than 14 days or more than 14 days, some websites, like Airbnb, will send a tax form documenting the income to the IRS. Therefore, it’s important to keep detailed records of your guests and the time they spent in your home in case you receive a letter from the IRS requesting that you pay unreported income.
Choosing a WebsiteNow that we’ve covered the essential first steps for preparing your home for renting, let’s take a closer look at some of the specifics of a few of the more popular home rental websites, including Airbnb and HomeAway.
Based in San Francisco, Airbnb is probably the home rental website that most people are familiar with. This is largely attributed to the vast amount of praise it has received from both users and critics for its’ ease-of-use and ubiquity over the past couple of years. Airbnb operates worldwide in over 34,000 cities in over 190 countries. Since its conception in 2008, Airbnb has managed over 2,000,000 listings that have accommodated over 60,000,000 guests.
With Airbnb, you’ll:
• Have access to a global support team that’s available 24 hours a day
• Receive up to $1,000,000 in protection for eligible hosts
• Be able to review detailed guest profiles with host reviews and strict verified ID process
• Use secure payment and messaging tools
• Be charged a 3 percent host fee for each booking
Based in Austin, HomeAway is another leading home rental website that offers many of the same amenities as Airbnb. They operate in over 190 countries and also own and manage a swath of other rental websites including VRBO.com, VacationRentals.com, and many more international domains.
With HomeAway you’ll:
• Have access to 24-hour customer service
• Be able to see customer and host reviews
• Receive coverage for damages if eligible
• Be charged an annual subscription or a 10-13 percent host fee for each booking
Pros and Cons of Renting Out Your HomePros:
• You’ll generate extra income through a secured payment system
• You’ll make connections with people from all over the world
• Listing your home is free through some websites
• With most websites, you have the freedom to take down your listing whenever you want
• Most websites provide insurance coverage for property that’s been damaged by guests
• You could be evicted if you don’t first consult your landlord
• Some cities and homeowners associations prohibit “Short-stay accommodations”
• Your home may get damaged from disrespectful guests
• Most websites require you to pay a hosting fee
ConclusionThe home rental industry has made a lot of exciting new advancements over the past few years and continues to grow in popularity. As we mentioned before, guests expect a home that feels like home. A broken air conditioner or faulty plumbing can ruin that feeling fairly quickly. Therefore, to ensure your future guests’ expectations are met, it’s important to have a plan in the event of a major home appliance or home system breakdown. With a home warranty from AHS, you can protect your budget from unexpected breakdowns as well as your overall rental rating.
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