So you are considering turning your home into a Short Term Rental? I can think of some GREAT reasons to test the water…and I have also tossed around a few disadvantages in my mind. Let’s just get it all on the table. What are the Pros and Cons?
Some Compelling Advantages Are:
- Flexibility – You choose the days, weeks or months to rent. Rent as much or as little as you choose. There’s also the option to travel at the drop of a hat, and make money while you are gone!
- You are giving guests more privacy / more space than traditional Hotels – Short Term Rentals are perfect for families.
- Brings in more cash than a Long-Term Rental – It’s easy to do the math: 1 vacation week at $1500 vs. $1500 a month to rent for a year.
- Great Deductions – There are lots of common deductions for Rental Owners. Cleaning and Maintanance, Insurance, Management Fees, and Utilities are just a few. With enough deductions, you could record a loss and avoid taxes altogether.
- Tax Breaks – The best home related tax breaks go to Short Term Rental Owners. Be sure to know the tax laws of your state. Go IRS Tax Topics-renting your home to learn more.
- Less Wear and Tear on the Property – With renters going in and out frequently, you can keep up on small repairs before they turn into big problems!
- Social Benefits – There are quite a few interesting people out there, and lots of them travel! Your next Short Term Rental aquaintences could turn into life-long friendships!
A Few Noteworthy Disadvantages:
- Less consistency in payments – If you are banking on a steady income, a yearly renter is much more of a sure thing. There is a possibility that you may go weeks or months without a Short Term Renter.
- Must pay the utilities – Long-term renters generally pay utility bills. Short Term Renters don’t.
- More risk involved – Because of the sheer volume of people passing through your doors, there is more liklihood of theft, breakage or problem renters.
- It takes more effort to run a Short Term Rental – Generally, YOU become the innkeeper. You’ll be collecting payments, scheduling clients, and doing all the work to bring in renters. Instead of doing this once every 5 years or so, you’ll be doing it weekly!
- There are more Maintainance costs associated with Short Term Rental – As the landlord, housekeeping, yardwork, pool mainainence and general upkeep fall to you. Not usually so with a long-term renter.
- Some Neighborhoods with HOA’s make it difficult and complicated to Rent Short Term – Let’s face it, your neighbors might get mad at you. They want quiet, comfortable surroundings where they feel safe and know everyone, and ‘here you go again’ having miscellaneous strangers in and out at all hours. They might file complaints, and some HOA’s sue homeowners who are Short Term Rental Owners
What to do? Weigh the pros and cons for yourself and make your decision. All in all, we think Short Term Rental is a pretty great deal, and we think you will too!
Join us again to hear the answer to the question: “Why Short Term Rentals?”