Make Money From Your Extra Space, But Before Getting Into The Hospitality Business, Ask These Important Questions.
The past few years have seen a huge increase in the number of people who are sharing their extra space for profit. With online sites and apps like Airbnb, VRBO and HotPads, it has become relatively easy to make extra income by renting out your apartment, spare rooms and extra space. But before you become a landlord or enter the world of short-term hospitality, there are vital regulations to be aware of and important questions to ask. So while you are asking yourself, just what is hospitality, how you can succeed and is it right for you, consider these important questions to consider before jumping into the rental market.
What Are The City and State Regulations?
Try as we may try to avoid it, there’s always red tape involved with a business, and renting your extra space does come with local regulations. Most states (or counties), especially in tourist areas, have a short-term occupancy tax. It is your responsibility to collect this tax and submit it with required forms and to report all your income when doing your yearly taxes. Some areas ban short-term rentals altogether or there may be restrictions from your HOA, so before you make too many plans, check with your local and state authorities. There are probably additional regulations regarding safety equipment like smoke and carbon monoxide detectors, etc. It is your responsibility to know and comply with all governing regulations.
Will Your Homeowner’s Insurance Policy Cover You for Damage or Unexpected Guest Injury?
It is vital to have the right type of homeowners’ insurance to protect your household investment. Most insurance companies require you to have special coverage if you are renting a portion of your premises to others. Likewise, you need to make sure that you are protected in case of an accidental injury on your property.
What Personal Rules Will You Want to Place on Your Rental?
A short-term lease agreement and rental application are a must. If you will be joining an established rental service live Airbnb or VRBO, they will make this step easy for you by supplying standard forms and offering reference services. You may have additional requirements like Pet Friendly (or not), No Smoking, Hours for Check-in and Departure, Noise Regulations, etc.
How Can You Make Your Rental Standout in the Crowd?
Attractive pictures of your space are essential. De-clutter! Your favorite trinkets will not be attractive to your guests or if they are…they may be pilfered – so remove them in advance. Be sure your images are well-lit and present your premises accurately – no trick mirrors to make it look larger than it really is! Be sure mattresses do not look like they sag, buy a new mattress topper if you must.
Supply your short-term rental with some unexpected essentials like a snack bowl with some fresh fruit, granola bars, chips, etc. and some bottled water. You should also have soaps, extra toothbrushes, moisturizer, etc. – just like in a quality hotel. These thoughtful extras will be greatly appreciated and set the stage for a great stay.
Put together a booklet of local maps, recommended restaurants and nearby attractions.
Cheery fresh flowers and bright decor always make a big welcoming impression.
What Are Some of the Pitfalls to Success?
Cleanliness is KING! Your rental must be spotless, with fresh linens, and gleaming surfaces. Provide lots of visible places for your guests to charge their electronic devices as well as a simple wifi password. Guests may put up with limited cable channels but will balk at not having good internet speed.
Noise is one of the biggest factors that cause the downfall of short-term rentals. Be sure that your renters understand that no excess noise from loud music, televisions, or additional party guests will be tolerated. Annoyed neighbors will cause you big complications, so avoid any trouble in advance.
You may want to consider installing keyless locks so you don’t have to worry about supplying and changing keys.
Communicate with your guests to make sure they are happy, have what they need, and answer any questions they have. Spending a few minutes with them to make their acquaintance will go a long way to assuring a positive review of your place.
Good luck with your venture into the hospitality business. Millions of people are doing it and there’s no reason you shouldn’t be successful as well!