Should you Sell your Home or Rent it Out?
If you are a homeowner that wants to sell your home, you may also consider putting your home up as a short-term rental property. Short-term rentals (STR) are commonly used as an alternative to a hotel, and this kind of investment has gained popularity in recent years.
While a short-term rental can be an appealing idea, the reality is that it comes with a lot of additional responsibilities. Here are some of the challenges you could face if you rent out your home rather than selling it.
The Responsibilities that come with a Short-Term Rental
It takes a lot of time and effort to successfully manage your house as a short-term rental. You’ll be juggling multiple tasks including dealing with reservations, organizing check-ins, tackling cleaning (even if you hire a cleaning company), landscaping, and maintenance duties. Any one of those can be overwhelming, but all together it can be a lot to handle.
As with the nature of a short-term rental, the turn-over rates can be high as new guests check in and out. This increased home traffic can lead to wear and tear on your floors, stairs, walls, furniture, and exterior property. This of course means increased costs associated with repairs, and you may even need to completely replace furniture, fixtures, and appliances more often.
So think through your willingness and ability to make this commitment, especially if you plan on using a platform to advertise your rental listing. Most companies have specific requirements you must meet in order to be allowed to advertise on their platform. An article from Bankrate explains:
"Managing a rental property can be time-consuming and challenging. Are you handy and able to make some repairs yourself? If not, do you have a network of affordable contractors you can reach out to in a pinch? Consider whether you want to take on the added responsibility of being a landlord, which means screening tenants and fielding issues, among other responsibilities, or paying for a third party to take care of things instead."
There is a lot to consider before taking the leap and committing to rent out your home. If you aren’t ready for the work that it requires, selling your home would be the better option.
Short-Term Rental Regulations
Regulations for short-terms rentals have increased as the industry grows. Legal restrictions can commonly include limitations on the number of vacation rentals in a particular area. This is especially true for major tourist destinations and bigger cities where there are concerns about overcrowding or even housing shortages for permanent residents. Other restrains may come in the form of the type of property that can be used for short-term rentals. Also, if you have a homeowners association, you will need to check in with them to see if they even allow short-term rental properties.
Many cities also require homeowners to obtain a permit or a license before renting out their properties. Nick Del Pego, CEO at Deckard Technologies, explains:
“Renting short-term rentals is considered a business by most local governments, and owners must comply with specific workplace regulations and business licensing rules established in their local communities.”
Before you get too serious about putting up your home for a short-term rental, be sure to check up on your local regulations to ensure you are allowed to do so to begin with.
Converting your home into a short-term rental isn’t a decision you should make lightly, or one you should make without the help of a professional. Contact Premier Sotheby’s Realtor Dianne Anderson today to learn more.