Whether you have a mountain cabin, a beach house, or a downtown condo, renting out a second home is an excellent way to generate passive income. One of the greatest advantages to short-term rentals is the flexibility it allows. Owners can block off calendar periods that they want to keep free for personal use and set fluctuating rates based on the season to maximize profits.
Before you dive right into it, it’s important to know a few things.
The first thing you should do before you get your property ready for short-term rental is to check any rules and regulations in your area. Depending on where your property is located, you may need to apply for a license and observe certain limitations. In addition, make sure to check whether any HOA restrictions exist on rental properties.
Set a Budget
Because of the high turnover, vacation rentals require a great deal of maintenance and upgrades. If your home is not outfitted for short-term rentals, you will need to take the time to make the appropriate changes and set a budget for any needed renovations.
Remember to account for every expense you incur on the property, including utilities, cleaning costs, consumables (toiletries and toilet tissues), repairs, furnishings, entertainment package (cable and Wi-Fi), and advertising plans.
Prep the Space
Walk around the space and take note of anything you anticipate your guests might need as well as potential issues they might encounter. Some basic utilities for a comfortable stay include electricity, water, heating, air conditioning, plumbing, and Wi-Fi.
A few other things to consider are storage space, kitchenware, appliances, cleaning supplies, toiletries, paper tissues, bedding, trash bags, place settings, coat hangers, and more. A good idea is to make an inventory checklist. You may also want to keep some essential items in plain sight.
Determine the Rent
Your asking price will ultimately come down to factors such as your property’s current market value and location. Most property owners will charge anything from 0.8 to 1.1 percent of their house’s market value for each month. Make sure to check rental prices of comparable homes nearby and factor in any service fees charged by platforms such as Airbnb and VRBO when applicable.
Are you ready to invest in real estate and see the value it can provide? RLG would love to help you! Call us today to learn more.