Have you ever considered renting out your home to bring in extra income? Many homeowners have enjoyed big economic benefits over the years from home-sharing platforms like Airbnb and VRBO. If you’re thinking about jumping in to grab a piece of that pie, there are a few things to consider first.
Know Your Regulations
Not all cities view the home-sharing phenomenon as a win-win. Many municipalities are passing new regulations that are often designed to curb its growth. Before signing up for a service like Airbnb, you should find out a few things. Does your city have a framework for short-term rentals? Are there any legal restrictions? How expensive is licensing?
Researching this is critically important, because ignoring licensing regulations can be very costly. In Portland, Oregon for example, the city implemented fines of $1,000-$5,000 per violation for home-sharing operators. In 2017, it collected over $70,000 in fines and fees from a single operator who was found to be in violation of the city’s regulations. Research the legalities here for the Portland area.
Know Where You Live
Cities are made up of distinct neighborhoods, and people are proud of where they live, so you'll want to think carefully about the impact of a short-term rental on your neighbors before moving forward with your plans. Will the locals have to compete with guests for on-street parking? Will they feel less secure with strangers coming in and out?
You don't need to get permission before renting out rooms, but as a courtesy, you'll want to let anyone impacted by your decision in on your plans. You'll also want to establish clear house rules and expectations, especially about noise or late-night outdoor socializing, for your guests.
Know Your Coverage
There are many horror stories in the news about home-sharing rental situations gone bad. While the truly newsworthy situations are extremely rare, they serve to remind us about the financial and legal risks for hosts who allow strangers into their home. It's important to make sure you have the appropriate insurance coverage for the worst-case scenario.
Home-sharing companies such as Airbnb or HomeAway offer basic insurance coverage, but what they offer may not be enough, or could be severely limited by exclusions. For example, if you're renting out rooms at your primary residence, short-term, on a regular basis, it may be considered a home-based business, and you could be denied coverage. Your best option to ensure that you have full coverage for any situation is to ask your insurance agent or provider about the nature of the protection, liability coverage and deductible.
Go For It!
With the right research and preparation, home-sharing can be a great source of income!
Always remember, I am here for you! If you have questions or need help with anything, I am just a phone call, text, or email away. Let's chat!