Renting or Selling Your House: What's the Best Move?
If you're a homeowner looking to relocate, you might consider using your current home as a short-term rental property rather than selling it. A short-term rental (STR) is typically offered as an alternative to a hotel, and it's a popular investment in recent years.
While a short-term rental may seem appealing, the reality of being responsible for one may be difficult to accept. Here are some of the issues you may face if you rent out your home rather than selling it.
A Short-Term Rental Comes with Responsibilities
It takes a lot of time and effort to successfully manage your house as a short-term rental. You'll have to deal with reservations, organize check-ins, and handle cleaning, landscaping, and maintenance duties. Each of these can be demanding on its own, but when combined, it's a lot to handle.
Because new guests check in and out frequently, short-term rentals have a high turnover rate. Because of the increased wear and tear on your property, you may need to make more frequent repairs or replace your furniture, fixtures, and appliances more frequently.
Consider your ability to make that level of commitment, particularly if you intend to use a platform to advertise your rental listing. The majority of them have specific requirements that hosts must meet. According to a Bankrate article:
“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.”
There are numerous factors to consider before converting your home into a short-term rental. If you are not prepared to put in the effort, it may be better to sell.
Short-Term Rental Regulations
As the short-term rental industry continues to grow, regulations have increased. Legal restrictions commonly include limits on the number of vacation rentals in a particular location. This is especially true in larger cities and tourist destinations where there may be concerns about overcrowding or housing shortages for permanent residents. Restrictions may also apply to the type of property that can be used for short-term rentals.
Before renting out their properties, many cities require homeowners to obtain a license or permit. Deckard Technologies' CEO, Nick Del Pego, explains:
“Renting short-term rentals is considered a business by most local governments, and owners must comply with specific workplace regulations and business licensing rules established in their local communities.”
Before considering renting out your home, you should thoroughly investigate whether short-term rentals are regulated or prohibited by the local government and your homeowner's association (HOA).
Converting your home into a short-term rental is not a decision you should make lightly. Speak with a local real estate agent today to see if selling your home is a better option.
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