According to Square One, renting out your home can truly provide a significant residual income, to offset your mortgage or travelling costs or just to make some extra cash.
We’ve all heard of vacation rental websites such as VRBO.com and AIRBNB.com. They’re user-friendly and informative websites that allow you to browse rental properties – from condos to mansions – available all over the world.
You can filter down to area travelling, waterfront, pool on site, and more. The sites often offer accommodations that are cheaper than hotels, and that provide all the comforts of home, they are a fantastic option for travellers who want luxury and style.
Once you see how well these rental properties do for generating income, have you ever considered that you could cash in on this trend? Perhaps your home has a lot to offer – maybe it’s oceanfront, near a hot spot tourist destination, or a peaceful vineyard?
It can be a great opportunity for the right people – however, there are some serious things to consider before you take the plunge. Renting your home is not a simple, one-step process. Many channels need to be navigated, such as:
Check out your Municipal or Strata Regulations around Renting
If your home is part of strata, or if you have a single detached home, you should always do some research around rental rules. Check the rules with your city’s zoning department and your strata association board, if applicable.
Ideally, consult a local real estate lawyer to ensure that you are within your rights. This consultation will help to protect you and your renters.
While renting out your dwelling may seem like a great income generator, we’ve all heard horror stories about renters that trash the property, host massive parties, cause problems and worse.
You have to make sure that you have insurance to cover any of this damage and to make sure you are screening your tenants beforehand to avoid this in the first place! Which brings us to the subject of damages:
Ask for a Damage Deposit and References
References may only be necessary for long term rentals – however, a damage deposit is essential. If the renter damages your dwelling, you keep their cash.
You can also draft a rental agreement that will protect you from issues and liabilities. It can also include an occupancy agreement which will prevent the renter from bringing their whole fraternity with them!
Price your Home Right
Do your research on other dwellings that are for rent in your area and find out where they’re priced. You want to be competitive – not overcharge, but not be the cheapest, either. Your price will also depend on the location, your home’s size and the amenities you offer.
Also, consider costs such as maintaining your home while you’re away from it, paying a housecleaner, and if you’re renting it out often, you may want to employ a property manager to do much of the legwork for you.
Overall – Be Cautious
By using websites such as AIRBNB and VRBO, you are mostly protected against any horror stories or significant losses – so if you are going to start renting out your home, it is advised to go through this sort of channel.
BUT, don’t forget your additional home insurance on top of that – you can never have too much insurance!