If you’re a homeowner ready to move, you may consider 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, an investment that has recently gained popularity. According to a Harris Poll survey, 28% of homeowners have temporarily considered using a rental service to rent out their homes for additional income.
Owning a short-term rental can be tempting, but you may find the reality of being responsible for one difficult to take on. Here are some challenges you could face if you rent out your house instead of selling it.
A Short-Term 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, which 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 rental, but there are also risks that could come up for you. 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.”
Before taking the leap and converting your house into a short-term rental, there’s a lot to consider. 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 most significant 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, which 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 wise to do your homework and learn how much rentals in your area go for, how much business they get throughout the year, and how this compares to your goals.
Converting your home into a short-term rental isn’t a decision you should make without researching. Let’s connect today tSo to decide if selling your house is a better alternative.