If you own a vacation home, you are most likely going to have times that the home just sits empty. This is a good time to think about renting it out for a little extra money. We did this one summer when we were too busy planning both of our daughter’s weddings. Instead of letting our cabin sit empty during prime time, we decided to give renting it out a try.
It’s not as easy as just finding a renter and calling it good. There are some important things to consider. I’ll explain how to rent out your vacation home with the most advantage and least amount of risk.
To Rent Or Not To Rent Vacation Home?
Tax and Tax Deductions: In determining how often you want to rent your vacation home, you will want to think about the tax implications. The ratio of how much you use the home versus how often you rent it indicates the tax and tax deductions. For instance, if you only rent out the home for 14 days or less, there will be no tax on that income. However, if you rent it for longer periods of time, there will be tax on the income but also some possible deductions.
Potential Damage To Vacation Home: There is always the risk of damage to your home while it is being rented. It is important to be choosy with your renters.
When we listed our cabin as a rental, I was very careful about who I allowed to rent. There were many large groups of people that inquired about our home. My feeling was that a large group had more potential for causing harm. I typically chose couples or a small family. I also paid attention to how the email was written for the request to rent to help determine character. Whenever I could, I also spoke to potential renters on the phone. You can get a good instinct on people just through communication.
It’s also wise to collect a damage deposit and have a rental agreement in place to help protect you from damages. You’ll want to make it very clear whether or not you allow pets or smoking and what your expectations are for clean up.
Insurance: Your home owners insurance will cover short term rentals. However, anything more than that may require a liability insurance policy. This can be expensive but your rental price could include your cost of insurance.
How To Promote Vacation Home Rentals
There are several ways that you can promote your vacation home. Some will cost money and others are entirely free. Depending on how often or how quickly you want to get renters will determine the avenue that you take.
Word Of Mouth – For those that don’t want to rent out their home very often and aren’t worried about timing, word of mouth can be all you need. Spread the word through friends and family and you will most likely get some takers. Also, renting to a friend of a friend provides some comfort on knowing your renter.
Craigslist Ad – Craigslist is a website where you can add listings for free. Although it may not be the first place people check when looking for a rental, it can bring in some potential renters.
Rental Home Booking Website – A website like VRBO.com or HomeAway.com is a fantastic place to advertise your vacation rental. There are yearly fees of around $350 involved with these websites but they do offer nice services. Many people look to these sites to find a vacation rental so you should have no problem getting renters. We used VRBO and got more calls than we ever needed. They handle the marketing, a rental availability calendar, and other tools that make it easy.
Property Management Company – A property management company will be the highest cost with the most services. If you will be renting your vacation home most of the time, this would be a nice option, especially if your vacation home is out of state. They will take care of everything with booking plus do renter screening and cleaning of the property. You would just want to find a management company in the area of your rental.
How To Get Return Renters To Your Vacation Home
The best renters are those that you have experienced before. This helps to give peace of mind. So, when you do rent, you want to make sure that you are doing some key things to get those renters back again.
Create A Welcome Package – A must is to have some sort of guide to the surrounding area attractions and restaurants. It’s also nice to include all the information on your home. Things like locations of towels or games or any other amenities to your place are nice details. Throw in a bottle of wine or a little basket of snacks as a welcome gift. You want your place to stand out from others in the area!
Make Sure Your Place Is Clean And Full Of Supplies – Cleanliness is of utmost importance. Nobody likes to stay in a dirty or untidy place. Make sure there are plenty of towels, sheets, toilet paper, etc. for your guests to be comfortable.
Include Fun Amenities – If you have a boat on the lake, consider having that available with the rental or for an extra charge. However, remember to have the proper insurance for liabilities like that. Other amenities may include kayaks, paddle boards, snow skis or fishing poles.
Other Vacation Rental Considerations
Put A Keyless Entry On The Door – Instead of worrying about getting a key to the renters, have a coded keyless entry. You will want to change that code after each renter. We had a keyless entry that saved two codes. We had one code for us and the other one we continually changed for new renters.
Payment Of Rent– A rental booking website that handles credit card transactions is the easiest way to accept payment. Otherwise, if you have a Paypal account, this is also easy and safe. If your only option is to accept checks, make sure the check clears before allowing occupancy.