Renting out your home or another property through Airbnb or a similar service can earn you a bit of extra cash flow each month.
But, if you’ve never done it before, learning the nuances around renting your property for the first time, like the implications surrounding home insurance for short-term rentals, and having paying guests in your home or other property, will go a long way in reducing risk and maximizing returns.
Let’s Dive In.
#1 – Research the Laws and Regulations
Renting out your home on a short-term basis can be a good way to earn extra income, especially on a seasonal basis. But it’s important to be aware of the laws and regulations governing short-term rentals in your city or town.
Insurance is one of the biggest considerations: Most homeowner’s insurance policies will not cover damages caused by renters, so you’ll need to make sure you have adequate coverage in place.
You may also need to pay hotel taxes on your rental income, just as you would with any other income source.
Another important issue to research is zoning. Some areas do not allow short-term rentals or have restrictions on how they can be operated.
By taking the time to understand the rules and regulations governing short-term rentals in your area, you can help ensure a smooth and successful experience for both you and your guests.
#2 – Find a Suitable Property
First, you’ll need to decide if your home is suitable to rent out, or if you need to find an alternative property to turn into a rental space. It should be in a good location, with enough space for guests, and have decent amenities.
It’s also important to make sure the property is in good condition, and that any necessary repairs have been made. You’ll also want to make sure there are plenty of nearby activities available for guests, such as restaurants, shopping, and entertainment.
Set the Rules and Regulations
Once you have decided on a property, it’s time to set the rules and regulations. This is an important step in making sure your rental agreements are legally binding.
Make sure you clearly outline the terms of the rental agreement, including any restrictions or requirements for guests. For example, you may have a no-smoking policy or require a damage deposit.
Also, be sure to include details about your cancellation policy: Most prefer peace of mind when they rent a stranger’s property.
#3 – Create an Attractive Listing
Once your property is ready to rent out, it’s time to start marketing and promoting it. You can use a variety of online channels, like social media, websites, and listing sites, to get the word out.
One of the most important things you can do is create an attractive listing with high-quality photos. In today’s competitive market, potential renters are often bombarded with listings and it can be difficult to make your property stand out.
With professional photos, you can show off your place in its best light and attract renters.
Good quality photos will also help to boost your listing online, making it more likely to appear in search results. Remember, first impressions count, so make sure your property looks its best no matter where you market it.
#4 – List your Rental Online
There are a variety of rental sites that can help you make a listing for your rental space. Airbnb and VRBO are two of the most popular sites, and both offer comprehensive listing services that can help you find the right guests for your property.
Airbnb is a global site, with listings in over 190 countries. This makes it a great option for properties located in popular tourist destinations.
VRBO is a U.S.-based site, which specializes in vacation rentals. It offers a wide selection of properties, making it a great choice for those looking for a specific type of rental.
Both Airbnb and VRBO offer extensive search capabilities, which allow renters to find the perfect property for their needs. They also both offer customer service support, which can be helpful if you encounter any problems during your rental.
By using a site like Airbnb or VRBO, you can boost the possibility that your property is seen by a large number of potential renters.
#5 – Respond to Inquiries and Bookings
When you list your property online, it’s important to be responsive to any inquiries from potential renters: No one likes an unresponsive landlord. By responding promptly, you can create a good impression and show you’re interested in renting your property.
In addition, responding quickly can help you snag a booking before someone else does. Renters are often looking for a property that is available for their desired dates, so by responding quickly, you can increase the chances they’ll choose your rental.
#6 – Manage and Maintain the Property
As the manager of a vacation rental property, it is your responsibility to ensure guests have a comfortable and enjoyable stay. This includes handling check-in and check-out, as well as addressing any problems or concerns that may arise during their stay.
It is also your job to make sure that the property is clean and well-maintained. This means regularly cleaning the common areas and guest rooms, as well as taking care of any necessary repairs or maintenance.
You may feel like you don’t have time to maintain your property, but it’s a crucial way to not only help your guests have a comfortable and memorable stay but to build a positive reputation and social proof for your properties.
#7 – Collect Payments and Provide Reviews
Collecting payments from guests is a relatively simple process. Once you have confirmed a reservation, you will need to provide the guest with payment instructions. There are a variety of ways that you can accept payment, including credit cards, PayPal, and checks.
It’s important to be clear about the payment requirements and deadlines in your rental agreement. This will help to avoid any confusion or last-minute problems.
After the guest has checked out, be sure to provide them with a review. Providing a review also helps to build trust and strengthen relationships between hosts and guests.
Ready to rent out your space?
If you own a property that you’re thinking of renting out, make sure you understand the insurance implications of having short-term renters, as well as the steps it takes to list and rent out your space.
By taking these steps before renting out your property, you’ll be better prepared for success.
Luke Williams writes and researches for the insurance comparison site, ExpertInsuranceReviews.com. His passions include insurance and helping others create rental income.