If you're a homeowner ready to make a move, you may be thinking about using your current house as a rental property instead of selling it. There are two ways to rent your home, the first and most traditional way is long term to a typical renter on a 12-month lease. A short-term rental (STR) is typically offered as an alternative to a hotel, and they're an investment that's gained popularity in recent years. According to a Harris Poll survey, 28% of homeowners have considered using a rental service to temporarily rent out their home for additional income. Nashville is currently trending as the top city to invest in STR.
LONG-TERM RENTAL GOALS AND HURDLES
Converting your primary residence into a long-term investment can be an emotional decisions. You’ll be handing over your home to strangers, and they may not love it the way you loved it. Hiring a trusted professional management company could be the helping hand you need to make this transition. A solid property manager should vet tenants for you, with credit and background checks based on a minimum thresh-hold you’re comfortable with. This ensures that the “strangers” renting your home are highly qualified to care for the property during their possession.
Back in November, we posted a lengthy blog about preparing your home for the Rental Market if you’re strongly considering long-term renting, this post walks you through the necessary tasks that prepare you and your property for new inhabitants!
What About Short-Term Rentals?
Successfully owning and renting a house takes work. Think through your ability to make that commitment, especially if you plan to use a platform that advertises your rental listing. Most of them have specific requirements hosts have to meet, and it takes a lot of work. A recent article from Bankrate explains:
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's a lot to consider before taking the leap and converting your house into a short-term rental. If you want to learn more about the conversion, and property management, a Boxwood Team member is always available for consultation.
Your House May Not Be Ideal for Your Rental Goals
Not every house ends up being a profitable short-term rental either. One of the biggest factors is where your home is located. The less likely your neighborhood is to be a travel destination, the fewer requests you should expect from potential renters—and that impacts your bottom line. An article from the National Association of Realtors (NAR) advises:
When it comes to the viability of profitable STRs . . . consider factors like location, amenities, and whether the property is appealing. Most people seek STRs in locations where they vacation, so proximity to attractions is important. Likewise, the property should cater to a variety of travelers.
It's smart to do your homework and learn how much rentals in your area go for, how much business they get throughout the year, and how this compares to your goals.
Bottom Line
Converting your home into a short-term rental isn't a decision you should make without doing your research. To decide if selling your house is a better alternative, let's connect today.