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Renting out your vacation property this summer?

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Renting out your vacation property this summer?

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What can I do before listing my vacation rental?

Before you list your vacation rental, consider where renters are finding properties to rent in your area and how much others charge for similar accommodations. Apart from the market research, also make sure that it is legal to rent out your property, and understand what legal steps and payments may be required. Check with your city and county for regulations that might apply to you and your property. Additionally, you may want to confirm that your condominium and HOA does not limit vacation rentals.

Many vacation rental property owners add a key code combination lock to their door, or a key lock box, to make things easier for renters to get in. Other important items to update before listing your property include:

Depending on how involved you want to be in coordinating with your renters, you may want to consider hiring a property manager to handle the process. A property manager typically takes a portion of your income in exchange for finding renters and making sure the rental is cleaned and maintained after each use.

Do I need short-term vacation property insurance?

Depending on your current insurance coverage, mortgage requirements, and state or local legal requirements, you may want to check with your current insurer to make sure your policy covers rental properties.

Policies for short-term vacation rentals are available from most insurance carriers that offer business insurance and can be purchased as add-on policies. Experienced insurance brokers, including our trusted partner Simply Business, can help you find the right policies and coverage.

Even if you list your property through an online short-term rental service, such as Airbnb or VRBO, you could still be liable for any injuries or damage to your second home caused by a visitor or renter, and a standard homeowners' policy may not apply while the property is rented.

What safety features should be included in a vacation rental?

If you have short-term vacation property insurance, you might consider contacting your insurer for a list of safety features and devices that you can install and include in your rental. Installing safety features recommended by your insurer may lead to discounts on your premiums. Some of the most common safety features include:

  • Smoke and carbon monoxide detectors and alarms.
  • Fire extinguishers.
  • First aid kit.
  • Comprehensive outdoor lighting.
  • Secure door, sliding door, and window locks.

While laws and regulations often require smoke alarms, an alarm system will notify the fire department and police while you are gone.

If you have a pool, spa, jacuzzi, or any other water-based feature on your property, make sure that it is secured by either a fence or a safety cover. Small children and animals can quickly drown, and renters may not be aware of the dangers. Before renting out your property, make sure all hazards are fenced off, or at least clearly marked. For example, you may want to make sure that any household cleaners or chemicals are stored in a safe location, away from tiny hands.

A good tip is to be overly communicative with signage or written instructions about how to operate machines like washers and dryers, ovens, dishwashers, jacuzzis, and fireplaces. Even the most conscientious renter has been known to accidentally damage property. Clear instructions can prevent damage from misusing features on the property. Also, while it is important that your rental property not be bare and empty, too much clutter can be distracting, prone to loss, and hard to clean.

What are some tips for cleaning vacation rentals between renters?

Cleaning is essential to make sure renters and guests feel comfortable. If you are renting out your property to multiple guests, back-to-back, consider allowing enough time between reservations for a thorough cleaning. If you have a property manager, now is the time to get on the same page about summer plans, cleaning protocols, extra time between reservations, self or remote check-in procedures, and any other management issues for your vacation rental property.

Are there ways I can minimize tax liability from rental income?

You will not need to report rental income if you rent out your home for 14 or fewer days during the year. If you rent for more than 14 days, you must report all of your rental income, but you can deduct many of your expenses. To deduct your rental property expenses, you must determine which expenses were personal and which expenses are related to the rental property.

Consider contacting a tax professional to understand how your rental property may impact your taxes and overall liability. Rental property owners are essentially running a business. This means that many may benefit from incorporating their rental property business for tax and liability purposes.

Rocket Lawyer has you covered with customizable rental documents for your every property management need. Lease documents can be signed electronically, making agreements easy to finalize and manage. If you need to consult with a lawyer, that's easy too. Reach out to a Rocket Lawyer network attorney for answers to your questions and advice tailored to your specific needs.

This article contains general legal information and does not contain legal advice. Rocket Lawyer is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.

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