If you’re a houszowner ready to make a move, you may be thinking about using your current housz as a short-or-long-term rental property instead of selling it.
First, 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 houszowners have considered using a rental service to temporarily rent out their housz for additional income.
Owning a short-term rental can be a tempting idea, but you may find the reality of being responsible for one difficult to take on. Here are some of the challenges you could face if you rent out your housz instead of selling it.
A Short-Term Rental Comes with Responsibilities Successfully owning and renting a housz 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 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 housz into a short-term rental. If you aren’t ready for the work it takes, it could be wiser to sell instead.
Your Housz May Not Be Ideal for a Short-Term Rental Not every housz ends up being a profitable short-term rental either. One of the biggest factors is where your housz 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 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.
What About a Long-Term Rental?
That is much easier. I manage properties for clients who want to hold them long term. Finding tenants is a process that I work through very carefully. I do my homework and consider each prospective tenants needs. It's an art of choosing the right fit. Managing the property is the easiest part. Developing trusting relationships with the tenants is the key. If you are in a position to enjoy the benefits of income and appreciation from renting your property long-term, then we should talk.
Bottom Line Converting your housz into a rental isn’t a decision you should make without doing your research. To decide which direction you should take with your housz, let’s connect today.