Short Term Home Rentals
There has been a shift in how people prefer to vacation. They have the ability to rent a home or a room at their destination. For many these short term home rentals are preferable to staying at an ‘impersonal’ hotel. Welcome to the ‘sharing economy’. It is no wonder homeowners in vacation destinations want to cash in on this shift. Investors are also trying to scoop up homes in these areas.
Among vacation buyers, 29% rent or try to rent their property short term.
Among investors, 44% rent or tried to rent their property. This includes both short-term and long-term rentals.
37% of investment or vacation home buyers purchased property to generate income through renting: 36% in a beach area, 21% on a lake front, and 20% in the country.
The runaway success of online platforms carting to short-term rentals has outpaced governmental regulation. You need to do research regarding local (including Homeowner Associations), state, and federal regulations prior to thinking about renting a home or room. Airbnb has gathered state information and general guidelines, but it is ultimately the host’s responsibility to find out all obligations of renting. These include, but not limited to, business licenses, building and housing standards, zoning rules, contracts, and special permits.
In addition to rental restrictions, tax implications will need to be factored into consideration. Consulting with a tax preparer on local, state, and federal obligations will help in decision making.
Renting your home is a big commitment and a decision not to be taken lightly. Consider how involved you’d like to be in the process. Are you willing to maintain and manage your property while away? Will you be renting all or a portion of your home? If you have questions, consider working with a Real Estate Specialist.