Owners who rent out their second home report that they make approximately $26,000 per year doing so. That’s enough to cover the mortgages, taxes and insurance on the average $360,000 home. For those of you interested in joining this group and making your second home work for you, we’ve come up with some helpful tips to get you started.
Be street legal.
First, look in to local laws and restrictions so that you can be sure to conduct business legally. You may find that you need to obtain a license or permit before renting out your home. You may also find that your area specifies a minimum night stay for short term rentals. Additionally, I recommend consulting with a tax professional to make sure you know how to report your income and what you will need to set aside for taxes.
Ensure you’re insured.
Next, make sure that your insurance policy allows renting and will cover damages. FlipKey has partnered with insurance provider Aon to allow you to do this directly through our site. You can require renters to purchase $1000, $3000 or $5000 worth of damage protection, for which they only pay a small fee. You may also want to consider additional medical liability insurance to protect yourself in the event that someone gets hurt on your property.
If you market it, they will come.
Now that you are set up to start your business, you will need to market it! I suggest hiring a professional photographer to stage and shoot your home. You should also write a short description of the property including all of the amenities that it offers, as well as surrounding attractions. While advertising on FlipKey and TripAdvisor provides a great deal of international exposure, it is common for rental owners to advertise on multiple channels, and you can use your photos and description for all of these.
Outsource when necessary
If you do not live close to your rental, you may want to consider hiring a property manager to handle business for you. Property managers can help with marketing, screening tenants, handling contracts and deposits, maintenance, repairs and cleaning. This typically costs 20-30% of what you make from renting, but can be invaluable for far-away owners.
Those who fail to prepare, should prepare for failure
Finally, you must prepare the property itself for renters. Lock away any valuable items and rid the home of personal clutter. Take inventory of items in case they are lost or damaged. Make sure that both the inside and outside of the property are safe and clean. Provide essentials such as paper products, soap and laundry detergent. You may also want to provide maps and/or brochures, which you can find at your local tourist information center. And remember, many travelers choose vacation rentals over hotels because they offer a kitchen, so make sure that this is fully stocked with all of the necessary tools.