Have an unused room in your home? Or do you vacate your property frequently? In either case, it’s probably occurred to you that the extra space, or even your entire home, could work for you rather than sit empty while you’re paying for it.
Depending upon your situation, you might be capable of doing both. If the prospect of either is appealing but confusing, read on. Here’s some things to consider if you’re thinking about becoming a landlord or host.
Strategy
Begin with a formula based on your situation. Both long-term rentals and home-sharing services like Airbnb can bring in extra income. If you are seeking a steady flow of income and have a room, apartment or detached living space on your property, becoming a landlord might suit you best. If you’re out of town frequently, say for up to a month or less, and would like your home to earn extra money for you while you’re away, Airbnb might be the best bet. Both have their pros and cons.
Long-Term Rentals
You may be more familiar with the idea of a traditional rental. With this option, you’d seek a tenant under contract for at least six months. Some considerations: Ensure you interview prospective tenants, get references and do background checks. You’ll be living with them for a long time, so you’ll want to know more about them.
Make sure the rent meets your financial goals. You can’t change it once the contract is signed. Keep in mind such extra expenses as maintenance, insurance and other upkeep and factor that in when establishing the rent.
Utilities: Ideally your extra space will have Its own utility connections for the tenant to pay. If not, add those average expenses into the rent. Furnishings: Are you offering your space fully or partially furnished or unfurnished? You can add more money to the rent for a furnished apartment or room, but know that there will be a certain amount of wear and tear.
Short-Term Rentals
You’ve likely at least heard of Airbnb, the platform that acts as meeting place for those with a space to rent for a short term and guests. It’s an imperfect but potentially profitable route to earning extra income from your home that, like long-term rentals, comes with its own concerns. Here are but a few of the main ones:
Renting through Airbnb is easy and a great way to earn quick money, especially if you live in a large, business-focused region or tourism-oriented city. Rentals and guests are somewhat vetted through the program, but keep in mind you are renting your home and relying upon your guest to treat it with care.
Listing your home on Airbnb is free. The service earns its money through the booking fees. Like other sharing platforms, such as Uber, guests can and do review your home after visits, so ensure that you’re up to keeping your place spic-and-span to keep more reservations coming.
Airbnb can be seasonal, so it’s not always a reliable source of rental income.
Do some research. Visit the site and spend some time looking over the properties and guests re-views. Imagine yourself as a guest and pick up on the elements of a property you admire to give yourself a starting point. Read the reviews to give you an impression of routine pet peeves and how to avoid them.
Either situation can make a significant impact on positive cash flow, but look before you leap. If you’ve never rented your home before, giving Airbnb a trial run can provide you sense of the pros and cons and help you decide whether you’re a natural long-term landlord or a short-termer who can benefit from the rental every once in a while.
Need assistance? We will be happy to meet with you and share our guidance. Schedule an appointment today. Call us at 888-670-6791.
