Renting out your property is no longer the luxury of land barons. Anyone can do it, and today’s Internet resources and real estate experts make it easier than ever—as long as you know where to start and what you want from the rental.
In 2012, approximately 80 percent of vacation home purchasers cited rental income as the main reason for their buy, according to HomeAway Senior Vice President Jon Gray. The Internet vacation rental website lists approximately 711,000 properties across 171 countries—and about half of HomeAway’s clients cover more than 75 percent of their home’s mortgage with rental income.
Vacation home owners can also “rent away your retirement,” says Gray. “We’re seeing this more and more. According to the National Association of Realtors 2013 Vacation and Investment Home Buyers Survey, the median age of a vacation home buyer in 2012 is only 47 years old. Many people are discovering that you can buy your retirement home early and pay off the cost in the meantime by renting to travelers—while also using the home personally as a vacation home.”
Another reason to rent? Stave off foreclosure or ride out an upside-down mortgage while the market recovers.
“The ability to rent a home on a short-term basis not only garners higher return than a long-term rental, but it keeps the home in good shape for when you are prepared to perhaps sell it,” says Gray.
Mala Sander of Corcoran’s Sag Harbor, NY office in the Hamptons has seen some whimsical reasons for renting, including a mini-staycation. “One family I know likes to rent out their home and move out to Montauk because they enjoy surfing.
“Another family rents out the house for the explicit purpose of getting into a smaller, no-fuss home for a month, where they don’t have to worry about all the to-dos of the bigger home.”
If any of these scenarios sound appealing, follow these tips for a hassle-free rental experience:
Let go: “You must be able to accept that your home will be used and lived in by others, and there will be normal wear and tear as a result,” says Sander.
Get up to code: Gray offers this list of to-dos: Get the property up to safety code, purchase vacation home insurance, and know how your taxes will be affected by the income.
Timing is everything: Between Memorial Day and Labor Day is usually the best time to rent out a home because families have the most time to travel, says Gray. Bookings begin up to three months in advance.
Know the competition: What are your neighbors getting for their rental? Set your price accordingly, says Gray.
Package your property: Have professional photos taken, says Sander. “Be sure you meet the expectations of your guests—number of beds, bathrooms, parking, etc.,” says Gray. “Maintain an extremely clean home. Offer entertainment options in the home—pool, hot tub, video/board games, TV. Keep a local attractions guidebook or resource in the home. Stock your kitchen with the essentials. Appeal to the local taste—for instance, this home in Orlando has Disney-themed bedrooms for kids.”