Should You Sell or Rent Your Home?
If you are a homeowner who is preparing to relocate, you may be considering renting out your current home instead of selling it. A short-term rental (STR) is typically offered as an alternative to a hotel, and it has grown in popularity in recent years as an investment opportunity. According to a Harris Poll survey, 28% of homeowners have considered using a rental service to temporarily rent out their homes for additional income.
The idea of owning a short-term rental can be intriguing, but the reality of being responsible for one can be challenging. Here are some of the challenges you could face if you rent out your house instead of selling it.
A Short-Term Rental Comes with Responsibilities
To successfully own or rent a home requires effort. Consider your ability to fulfill this obligation, especially if you intend to use a platform that promotes your rental listing. Most of them have strict rules that hosts must follow, which 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.”
Owning a short-term rental entails time and money upfront, as well as potential risks that may arise in the future. Investopedia warns:
“Risks of hosting include renting your place to rude guests, theft or damaged property, complaints from neighbors, and potential regulatory violations depending on your location.”
Before deciding to turn your home into a vacation rental, there are many factors to take into account. It might be better to sell if you aren't prepared for the work involved.
Your House May Not Be Ideal for Your Rental Goals
Additionally, not every home turns out to be a successful vacation rental. The location of your home is one of the most important factors. You should expect fewer requests from potential renters as your neighborhood becomes less popular, which will affect 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 a good idea to do research and find out how much local rentals typically cost, how much business they receive annually, and how this compares to your objectives.
You shouldn't decide to turn your house into a short-term rental without first doing your research. Let's talk today to determine if selling your home is a better option.