If you’re a homeowner ready to make a move, you may be thinking about using your current house as a short-term rental property instead of selling it. A short-term rental (STR) is typically offered as an alternative to a hotel, and they’re an investment that’s gained popularity in recent years. There are two types of STRs that can help you make a decision which are STR 1 and STR 2. By doing proper research, you can decide which one is best for you. According to a Harris Poll survey, 28% of homeowners have considered using a rental service to temporarily rent out their homes for additional income.
Owning a short-term rental can be a tempting idea, but you may find the reality of being responsible for one difficult to take on. Here are some difficulties you can encounter if you decide to rent out your home rather than sell it.
There Are Duties Associated With Short-Term Rentals
Successfully owning and renting a house takes work. Think through your ability to make that commitment, especially if you plan to use a platform that advertises your rental listing. Most of them have specific requirements hosts have to meet, and it takes a lot of work. According to a current Bank Rate article:
“Managing a rental property can be time-consuming and challenging. Are you handy and able to make some repairs yourself? If not, do you have a network of affordable contractors you can reach out to in a pinch? Consider whether you want to take on the added responsibility of being a landlord, which means screening tenants and fielding issues, among other responsibilities, or paying for a third party to take care of things instead.”
Not only is there the upfront time and cost of owning a short-term rental, but there are also risks that could come up for you down the road. Investopedia warns:
“Risks of hosting include renting your place to rude guests, theft or damaged property, complaints from neighbors, and potential regulatory violations depending on your location.”
There’s a lot to consider before taking the leap and converting your house into a short-term rental. If you aren’t ready for the work it takes, it could be wiser to sell instead.
Your House May Not Be Ideal for Your Rental Goals
Additionally, not every home turns out to be a successful vacation rental. The location of your property is one of the most important variables. You should anticipate receiving fewer requests from potential renters the less popular your neighborhood is, which has an effect on your bottom line. A National Association of Realtors (NAR) publication offers the following advice:
“When it comes to the viability of profitable STRs . . . consider factors like location, amenities, and whether the property is appealing. Most people seek STRs in locations where they vacation, so proximity to attractions is important. Likewise, the property should cater to a variety of travelers.”
It’s a good idea to do your research and find out how much local rentals typically cost, how much business they receive annually, and how this corresponds to your objectives.
Converting your home into a short-term rental isn’t a decision you should make without doing your research. To decide if selling your house is a better alternative, talk to me today.