Home or investment property — how do you see the dwelling where you sleep and call home? Many worldwide see it as a potential form of income instead of a mere mortgage payment, turning around and listing it for rent on Craigslist, Airbnb, HomeAway, VRBO, FlipKey or another platform.
Of course, in these days of COVID, big events like sports championships, political conventions, and music festivals that dramatically increase demand for short-term rentals can’t be used until they are re-opened for crowds. Still, many house-bound home dwellers are looking for a getaway — a change of scenery. And over the past few months, short term rentals have begun to resurge. Becoming a popular rental during these pandemic times takes more time, cleanliness and attention than any other time in rental history, however.
Mortgage resource HSH’s Marcie Geffner decided to look into how to turn a home into a money maker. If you are considering using your home as a short term rental, your first line of defense is good communication with your renters, whether in person or by email or text. This back-and-forth is not only crucial to smooth handoffs of your home or room for rent; it could also save you money in addition to building trust with your guests. “If your clothes washer leaks, tub drain runs slow, or your home needs other maintenance or repair work, a renter’s report could enable you to remedy the problem before it becomes worse and much more costly to fix,” says Geffner. As for how to make your rental safe from COVID, read on.
The steps to making your home guest-ready include advertising it with a description, pictures, rate, and availability; monitoring inquiries as you receive them; selecting your renters, and communicating your house rules and check-in and checkout times. Money.com’s Daniel Bortz says, above all, set up the criteria for keeping your guests safe. The CDC recommends a minimum 24-hour wait period between tenants, adding in enhanced cleaning procedures for COVID-19 prevention, such as the use of personal protective equipment, like masks and gloves, for cleaners, as well as the use of disinfectants that are approved by regulatory authorities.
As a result, expect to charge a higher cleaning fee and don’t offer a late checkout option. Also, respect the city’s rules and regulations around COVID-19 for mask-wearing if coming into contact with your tenants. How will your guests feel safe enough to rent your space? Offer them reviews from past guests, featuring those that extoll the unit’s state or home’s cleanliness. If guests see even a hint untaken precautions they noticed within the property, other would-be renters will simply pass. To make things worse, the aggrieved renters may even take photos of it all and post them in their reviews.
As for renter damages, your only defense is a good insurance policy. “Before you decide to rent out your home, you should call your insurance carrier and find out whether your policy covers occasional short-term rentals,” says Geffner. “You might be required to notify your insurance company for your coverage to be effective or you might have to purchase a rider or endorsement to enhance your coverage.” She adds, “If you plan to rent out your home more frequently, you’ll be operating as a business and might want to buy a separate insurance policy for your activities.”
Before considering turning your home into a short-term rental, make sure your city, neighborhood or building does not prohibit it. “Major cities like San Francisco, New York and Los Angeles have grappled with issues like disgruntled neighbors and loss of affordable housing as homes in residential areas converted to full-time short-term rental use,” says Geffner.