Recently we met with some clients who were interested in purchasing a vacation home. The perfect place would not only need to accommodate them, but also their 4 adult children. When not in use by family, the desire was to rent it out and make a bit of extra income. Since an annual or seasonal rental isn’t possible with this type of scenario, leasing options can become a challenge!
We posed the following question: “What if we find a property that can generate short-term rental income with you, the owner, doing the scheduling or via utilization of a management company such as Airbnb or VRBO?” They looked at us and said, “What do all of those initials even mean and what are you talking about?”
While the abbreviations may be new to some, the concept is age-old. We’ve all likely had a roommate at one point in our lives. Maybe it was during college, or while sharing an apartment shortly after graduation. The difference of course is that with a short-term rental, it is very likely the tenant will be a stranger.
Airbnb is a service that puts owners/hosts and travelers/ tenants together by providing secure messaging, profile verifications and payment transfers. This type of option has grown increasingly popular as the destination options have grown. Vacationing couples and families will often pool their money and consider these opportunities as a chance to spread out comfortably and say goodbye to the traditional hotel room set-up.
Completely vacant homes aren’t always necessary. In fact, some property owners choose to rent out portions of their home while still living there themselves and offering use of kitchen, laundry, pools and more. It can be a wonderful way to generate some extra income from unused space!
VRBO is similar. However, this platform tends to focus more on whole-house rentals than single room or shared space offerings. Unlike Airbnb, the is no booking fee. Rather, those using the platform pay an annual subscription service. Both options are well worth exploring when considering vacation rentals.
But as they say in real estate, location, location, location. Not every location is a prime candidate for weekenders looking for a getaway. Homeowner’s and condo associations will also dictate if your home would be suitable. Other costs come into play as well. Many counties impose a tourist tax for short term rentals and of course, the IRS may be looking to tax that additional income. Certain rental services which help you obtain tenants will also have fees for booking and marketing your rental. Homeowner’s insurance may also put a crimp in your plans.
My best advice is to know all the facts up-front. If this is an appealing idea, do some research. Does the neighborhood have any restrictions on rentals? Are your prepared to be a landlord? Do you have the right help in place for emergencies? What are the insurance and tax ramifications if you decide to go forward?
Happy Thanksgiving from everyone at Leslie Wells Realty!
Please take time this month to give thanks and honor our veterans for their service to our country.