If you’re ready to make a move, you may be thinking about using your current house as a short-term home rental instead of selling. 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. According to a Harris Poll survey, 28% of homeowners have considered using a short term home rental service to temporarily rent out their home for additional income.
A Short-Term Home Rental Comes with Responsibilities
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. A recent article from Bankrate explains:
“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 home 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
Not every house ends up being a profitable short-term rental either. One of the biggest factors is where your home is located. The less likely your neighborhood is to be a travel destination, the fewer requests you should expect from potential renters—and that impacts your bottom line. An article from the National Association of Realtors (NAR) advises:
“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 smart to do your homework. Learn how much rentals in your area go for and how much business they get throughout the year. Compare this data to how this compares to your goals.
Bottom Line
Converting your home into a short-term rental isn’t a decision you should make without doing your research. If selling your house is a better alternative, See how you can begin your journey to homeownership by contacting the Don Wenner Team today!