Have you ever been closing up a second home or vacation property for the winter months and thought about renting out the property instead? If you’ve ever stayed at an Airbnb rental, you know that lots of people find the idea of short-term renting simple and lucrative. But what does it take to become a short-term landlord here in Indiana?
One of the first things you should consider before renting out your property is your current home insurance policy. If you plan on renting for any period in the greater Fishers area, you’ll need to have coverage in place that protects against liabilities and keeps your assets safe in the event of an accident.
6 Things Every Homeowner Should Know Before Becoming an Airbnb Host
1. What Are Your Goals?
Every host on Airbnb is looking to make a bit of extra money but what are your true goals behind this new venture? Are you simply interested in the occasional income? Or are you looking for a good way to pay off a second mortgage? Depending on your goals, the level of risk involved can vary greatly.
2. Are You Really Comfortable with Strangers in Your Home?
When you put your home up for rent on one of these popular hosting sites, you are literally opening it up to complete strangers. How comfortable are you with communicating online, over the phone and in-person with strangers? If you can’t see yourself dealing with tenants regularly, you may not be ready to let them through your front doors.
3. Do You Have the Time?
While Airbnb and other hosting companies do make it much easier to list your home for a short-term rental than other more traditional methods, they still require plenty of time and dedication. After the initial learning curve, you will be responsible for updating your page, checking renters in, fixing any issues and making sure you get positive feedback.
4. How Do Your Neighbors Feel?
Do you have neighbors that live close by? Have you decided to tell them that you’re turning your home into a rental or are you going to wait for them to find out? Chances are, if you’re waiting to tell them, you know that they won’t be too happy about having a revolving door of tenants living next door. In addition to poor neighbor relations, keep in mind that many HOA’s and city ordinances restrict short-term rentals.
5. Will Your Insurance Cover Renting?
In most cases, your home insurance policy will not extend to renting out your home. So that means you’ll need to explore additional coverage options like Landlord’s Insurance or possibly Small Business Insurance. Be sure to speak with your trusted independent insurance agency before you start renting out your property.
6. Can You Handle It?
Even if you decide to go with a 3rd party property management company to help bring in and manage new tenants, converting your home into a rental property takes lots of time, energy, and money. Some of the additional responsibilities and risks you’ll be facing include:
- Frequent repairs and maintenance
- Guest complaints and inquires
- Cleaning and/or hiring a cleaning company
- Neighbor complaints
- Optimizing your pricing
- Property damage and/or theft
- Bad tenants or squatters
- Tenant injuries and liability claims
Maintaining a successful short-term or Airbnb rental can lead to many interruptions in your life, so be sure you and your loved ones are ready for that before handing over your keys.
Contact Luxor Insurance Today
Want to learn more about the benefits of total insurance protection? Visit the team at Luxor Insurance for more information on our home insurance policies and be sure to request a quote online today.