Hosts in the Airbnb space face many challenges for success. Setting up homes for vacation rental, optimizing rental rates and cleaning properties between guests eats into time and money. Once rentals are rolling, even successful properties can hit speed bumps. Tourist demand is often seasonal or focused on appealing properties in central locations. Low barriers to entry can also reduce profits as more hosts enter the market and/or authorities create regulations to raise the bar. Short-term rental earnings have curbed in highly-regulated tourist hubs like New York, LA, San Fran, Barcelona, Berlin, and Amsterdam.
Given the popularity and potential of Airbnb, clients have started asking whether it makes sense to rent out their homes. We always encourage our clients to consider how renting their property will affect their life. If renting out your home helps you support your lifestyle and travel more, then exploring AirBnB could be an exciting opportunity.
AirDNA is a great starting point for researching vacation rentals in your area. AirDNA can help you assess the earnings potential of your home, whether you’d like to rent out your entire place or just share a room. Dipping a toe in the water of home-sharing during your next trip out of town is a great way to start!
The checklist below provides helpful points to consider before renting out your property:
Home Insurance: Check with your home insurance provider to ensure that your insurance coverage is still adequate and will remain in force if your home is rented out. The strategy of doing nothing and asking for forgiveness later just won’t work with insurance companies if you have a claim. We reached out to Sue Greer from Propel Insurance for her perspective on managing liability. She emphasized watching out for “contract language that can limit, or void, coverage entirely when the property’s occupancy is other than what was noted on the signed application.” It’s also important to ensure that your other liability coverage like umbrella insurance will still cover any accidents that may happen on your property if it’s rented out.
Security: It’s important to make sure that your home is secure and that any irreplaceable valuables are properly locked up when others are in your home.
- Locks: Digital locks are a great tool for avoiding sharing keys with guests, and they provide a simple way to setup new codes for each guest.
- Alarm: You still need to actively use your alarm with guests coming and going. The good news is that alarm companies permit you to change codes digitally so that each guest has their own unique code.
- Safe deposit box: Valuables that you won’t be taking with you, like jewelry and essential documents, should be stored in a safe deposit box at the bank.
- Internet Network: It’s also important to maintain internet security. Remember to create a guest network, and change the wireless password when guests leave.